If a waiter lies on his income tax form about the amount of cash he receives in tips, should the Missouri Department of Revenue be able to go after the restaurant over the difference?
Some businesses say the revenue department is doing this right now. However, a bill in the Missouri General Assembly would put a stop to this practice.
This week, Senate Bill 336 was passed by a House committee and then also approved on the House floor with a 141-1 vote.
The bill is sponsored by Sen. Will Kraus, a Republican from Lee’s Summit. Sen. Kraus filed the bill this session after it came to light that the revenue department had started reviewing restaurant tip records. The department is calculating the tip percentage on credit card receipts and comparing that to the cash tip percentage restaurant employees are reporting as income. When the percentages show a discrepancy, the department is going after restaurants to make up the difference.
“This bill is just simply clarifying that the employer is not responsible for the underreporting and therefore not responsible for the income tax that their employee is supposed to pay,” said Sen. Kraus, during a recent discussion on his bill.
This bill now needs only a final vote in the Senate to be sent to Gov. Jay Nixon.
For more information about tax issues, contact Tracy King, vice president of governmental affairs, at firstname.lastname@example.org or by phone at 573-634-3511.