Section 1320-04-02-.07 - TIPS, GRATUITIES, AND SERVICE CHARGES(1) The term "tip" means a monetary gift or gratuity given by a customer to a server in a bar or restaurant or similar establishment. Tips are not normally includable in the sales price of alcoholic beverages sold.(2)(a) Tips will, however, be included in the sales price of alcoholic beverages if the tips are either mandatory on the part of the purchaser or if the tips are not returned to the persons performing the service.(b) A charge which is automatically added to the customer's bill by the seller shall be considered mandatory, whether styled by the seller as a tip, gratuity or otherwise. This presumption may be overcome by an affirmative showing by the seller by a preponderance of the evidence that the prevailing practice was that payment of such charge was not required.Tenn. Comp. R. & Regs. 1320-04-02-.07
Original rule filed January 31, 1992; effective March 16, 1992.Authority: T.C.A. §§ 67-1-102, 67-6-402, 67-6-102, and Memphis Country Club v. Tidwell, 503 S.W.2d 919 (Tenn. 1973).