According to the California State Board of Equalization,
"Mandatory tips and gratuities are generally subject to sales tax when:
• An amount is automatically added to the bill without first consulting with the customer before the meal is served.
• The customer and the business agree to a suggested tip amount before the meal or event.
• Menus, brochures or other materials state that tips, gratuities, or service charges will automatically be added to the bill."
So not only are some restaurants making the tip mandatory, we’re paying sales tax on it, when we wouldn’t otherwise pay sales tax on the “tip”. I would prefer they simply disallow tips (like in Japan for example) and just add something to the basic cost of the meal if it’s that important to their business. And if they do that, the most important thing is that there is no line for a tip on the credit card slip.
But somehow suggesting it’s a “tip” and then making it a mandatory amount seems disingenuous… and apparently the State Board of Equalization agrees.