LAS VEGAS (KLAS) -- One of the biggest questions following President Donald Trump's spending bill centers on automatic gratuities, those mandatory service charges often tacked onto large restaurant parties.
The law promises "no tax on tips," but does that cover automatic charges?
"I don't think we should be taxed at all. We already get taxed on our paychecks, so why are we getting taxed on our tips?" Anthony Henry, a bartender at Lo-Lo's Chicken and Waffles, said,
Restaurants must withhold income and payroll taxes on those charges, and workers won't be able to claim the new "no tax on tips" deduction on that portion of their pay.
So, while cash tips, credit card tips, and pooled tips may qualify for the new tax break, automatic service charges do not. For servers and bartenders, that c