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If the service charge that you are charging is mandatory by the provider as part of the cost of the meals or banquet, then yes, in California you charge sales tax on that service charge. This is done whenever the banquet contract, menu, or meal check specifies a set service charge even though the member is told that the amount (such as 18 percent) can be changed up or down.

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Q: In California can you tax a service charge?
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