Via iStockphoto / @ceo_nickyb TikTok
A visitor to Florida from California noticed her restaurant bill was surprisingly low. Here's why—and it has to do with taxes.
Visitors to the United States are often surprised by how our tax system works.
In many other countries, the price listed on an item is how much you’re going to pay at the register. This isn’t the case in the U.S. The price on an item is just its pre-tax total, and unless you know all the applicable taxes off the top of your head (and are willing to do a little calculation), the final bill will always be a bit of a surprise.
This is especially true at restaurants. Not only do you have to account for around 10% in sales taxes, but you should also charge a 20% tip on top of that. This means that, while dinner and drinks may cost $50 on the menu, you’re going to end up paying around $65.
One of the reasons for this ambiguity is that states run their taxes differently. Sometimes, that can work out in the diner’s favor, as one TikTok user recently learned.
What’s The Deal With This Restaurant Bill?
In a video posted to TikTok, California-based user Nicky (@ceo_nickyb) says she noticed something peculiar after going out to eat at Denny’s in Orlando, Florida.
“We went out to go eat, and usually I’ll look at the tax to figure out, like, how much I want to tip,” Nicky explains. “Usually you can just double it or one-and-a-half times it more, and that’ll be a good tip, you know?”
“Well, in Florida, the server was telling us that they actually don’t charge tax on food,” she continues.
To prove this, Nicky shows her receipt. The subtotal is $44.92, while the tax is just $2.68.
“They only tax it on drinks in Florida. That’s crazy. I did not even know that,” Nicky shares. “Coming from California, I’m shocked.”
Is This True?
No—but there’s a reason you might see a lower tax charge on your receipt while in Florida.
Florida does have different rules about taxes on food. However, these rules apply primarily to grocery store food—not the kind of food you buy at Denny’s.
According to the Florida Department of Revenue, the state of Florida has a standard sales tax of 6%. On top of that, Orange County—the county that contains Orlando—adds an additional 0.5%. This means that the total tax bill should come out to 6.5% of your subtotal.
Looking at the TikToker’s receipt, that’s what she appears to have been charged. Her taxable subtotal, minus the noted discount, was $42.23. If one calculates 6.5% of $42.23, they get approximately $2.68. This is what the TikToker was charged.
Why Is It So Low?
Even so, a visitor from California may be surprised to see such a low tax charge on their receipt.
Every state runs their tax system differently. In contrast to Florida, some parts of California have a much higher sales tax.
In Los Angeles, for example, a diner can expect to pay around 10.25% in taxes. This calculation comes from 6% in California state taxes, 1% in taxes for the City of Los Angeles, and an additional 3.25% for Los Angeles county.
This isn’t even the highest rate in the United States. Bristol, Virginia has a 10% restaurant meals tax. Restaurants charge this in addition to sales taxes. If one goes to a restaurant in Bristol, Virginia, they can expect to pay around 15.3% in combined restaurant taxes.
That’s Not A Good Tip Rule
This is one of the reasons why Nicky’s tipping rule—i.e. doubling the tax—isn’t a good practice when traveling the United States.
There’s a general consensus in the restaurant industry that the expected tip is between 15 and 25 percent. While Nicky’s practice of doubling the tax may work in Los Angeles, where the calculation results in a tip of 20.5%, it can result in a pitiful tip in cities like Orlando—or a bank-breaking tip in places like Bristol.
Instead of looking at the tip, one should simply look at the subtotal. To easily calculate a 20% tip, move the decimal point one place over, then double it. For example, if your bill is $25.00, you can move the decimal point over to make it $2.50, then double it to get a $5, 20% tip.
Alternatively, you can just use your phone calculator.
BroBible reached out to Nicky via email and Instagram direct message.