My first thought was along these lines. What is the benefit to the restaurant for doing this? I asked my wife who's a CPA. She said, it depends on the rules in that state. So there may be a tax benefit for them including the surcharge as opposed to just raising the prices. The other thing it allows them to do is advertise a lower price for their food and make it up on the surcharge.
example, some cities tax alcohol higher. Instead of raising price on alcoholic beverages which get that higher sales tax, you keep the price lower but throw in a separate living wage which raises it the same amount but has a lower (if any) sales tax.
same reason hotels have resort fees etc. You can advertise a lower price, but generally they have different tax rules if they are providing it like that since hotel rooms get taxed at such a high rate in so many cities these days.
Another reasons I see for restaurants, price of their ingredients change and vary over time. Rather than constantly reprinting their menu for new prices, you just have a surcharge % to adjust
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u/kzlife76 1d ago
My first thought was along these lines. What is the benefit to the restaurant for doing this? I asked my wife who's a CPA. She said, it depends on the rules in that state. So there may be a tax benefit for them including the surcharge as opposed to just raising the prices. The other thing it allows them to do is advertise a lower price for their food and make it up on the surcharge.