Lots of folks have been asking of late, “Do I have to show taxes in drink prices?”
The Tennessee Department of Revenue recently clarified that including taxes in drink prices is optional. Previously, the state required that menu prices include both liquor by the drink and sales taxes.
The law now gives taxpayers the option to include taxes on the final bill to the customer, instead of in the sales price listed in menus.
A copy of the notice from Revenue is included here. LBD Tax Notice.pdf
Please keep in mind that price schedules should still contain all taxes, including both liquor by the drink and sales taxes.
If menu prices do not include taxes, Revenue advises that the menu must state that the “15% LBD tax and sales taxes will be included on the final bill.”
See our blog post concerning price schedules here.
The notice clears up a long-standing dispute we have had with Revenue over taxes. We have always thought that Revenue lacks statutory authority to require that taxes be included in drink prices on menus.
There is this pesky American thing about free speech. We love Metallica’s satirical take on freedom in Eye of the Beholder:
Freedom of choice
Choice is made for you, my friend
Freedom of speech
Speech is words that they will bend
Freedom no longer frees you
Doesn’t matter what you see
Or into it what you read
You can do it your own way
If it’s done just how I say
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