I'm not a "Mr.White" -- I do tip proportional to service and that has extended to tipping 50% for service that was so far "above and beyond" I doubt I'll ever see it's like again.
But this restaurant and the police who aided and abetted them are so far in the wrong here that they deserve a major smack-down. If the restaurant (and police) consider "mandatory gratuities" to actually be a "service fee" rather than a gratuity they would have had to collect (and send to the county/state/Feds) sales tax on those monies.
I'm not familiar with this particular restaurant's practices, but none of the restaurants I've ever visited collect/pay sales tax on these "mandatory gratuities" and I believe it is highly unlikely this restaurant does that either. As a consequence of claiming that the amount in dispute was an owed fee, the restaurant ought to be promptly audited and billed by the Pennsylvania Department of Revenue and by the IRS to determine what they owe in delinquent taxes and penalties. And I hear the 2006 federal tax law changes add new, guaranteed bounties for whistleblowers who turn in businesses that are underpaying their taxes...
But this restaurant and the police who aided and abetted them are so far in the wrong here that they deserve a major smack-down. If the restaurant (and police) consider "mandatory gratuities" to actually be a "service fee" rather than a gratuity they would have had to collect (and send to the county/state/Feds) sales tax on those monies.
I'm not familiar with this particular restaurant's practices, but none of the restaurants I've ever visited collect/pay sales tax on these "mandatory gratuities" and I believe it is highly unlikely this restaurant does that either. As a consequence of claiming that the amount in dispute was an owed fee, the restaurant ought to be promptly audited and billed by the Pennsylvania Department of Revenue and by the IRS to determine what they owe in delinquent taxes and penalties. And I hear the 2006 federal tax law changes add new, guaranteed bounties for whistleblowers who turn in businesses that are underpaying their taxes...