The Texas Comptroller of Public Accounts has amended the State’s regulation on the taxation of gratuities. Reasonable mandatory gratuities are not subject to tax as long as they are separated from the price of the meal, identified as a tip or gratuity and are disbursed to qualified employees. Any amount of mandatory gratuity that is retained by the employer is subject to sales tax. The employer must retain records that show that mandatory gratuity charges have been disbursed to qualified employees. If a mandatory gratuity charge exceeds 20% of the original sales price of the meal, the entire gratuity charge is subject to tax. Voluntary gratuities remain exempt from taxation, regardless of amount. (34 TAC Sec. 3.337, November 28, 2007)