What entitles a restaurant to charge a luxury tax on your food bill?

dgirl77: What entitles a restaurant to charge a luxury tax on your food bill?
I recently noticed on my bill at a nice local chain restaurant that the tax was 10% of the bill. I questioned the waitress about it since the state rate is 6% & she didn’t seem to know anything about it. She questioned management & the answer was that is is a luxury tax. What do you have to do to qualify to charge such a tax? Are there requirements, or can any restaurant charge it?

Answers and Views:

Answer by Wayne Z
It’s not that the “can” charge it. They “must” charge it.

The tax goes to the state. The restaurant doesn’t get to keep it.

Many states have different tax rates for “prepared” food so it is common to pay a higher sales tax rate at a restaurant than at a store.

If you want to fall over, rent a car at an airport and look at the tax rate.

Answer by Zandelia
there is no such thing. You got ripped off.

Answer by jseah114
Take a look at your cell phone bill. 10% in tax on food is cheap by comparison. Before the IRS did away with the federal excise tax, in the higher cost states such as NY, the federal and state taxes and fees on the average cell phone bill could easily climb up towards 25-30%.

Answer by Judy
State and local law determines what taxes are charged. If you are being charged this tax only in that restaurant and not in others in the same municipality, then something is wrong. States can have different tax rates for different types of items. Some municipalities have additional taxes added to the state tax.

A business can’t just decide to add on an additional charge and call it a tax.