701—18.26 (422) Service charge and gratuity. When the purchase of any food, beverage or meals automatically and invariably results in the inclusion of a mandatory service charge to the total price for such food, beverage or meal, the amounts so included shall be subject to tax. The term “service charge” means either a fixed percentage of the total price of or a charge for food, beverage or meal.
The mandatory service charge shall be considered: (1) a required part of a transaction arising from a taxable sale and a contractual obligation of a purchaser to pay to a vendor arising directly from and as a condition of the making of the sale and (2) a fixed labor cost included in the price for food, beverage or meal even though such charge is separately stated from the charge for the food, beverage or meal.
When a gratuity is voluntarily given for food, beverage or meal it shall be considered a tip and not subject to tax.
Cohen v.	Playboy Club International, Inc., 19 Ill.	App.	3d 215, 311 N.E.2d 336; Baltimore Country Club, Inc.	v.	Comptroller of Treasury, 272 Md.	65, 321 A.2d 308.
This rule is intended to implement Iowa Code section 422.43.