Is there a way to add tax to gratuity?

[KasparsCatering]

Our business hosts several dinners a year with prifix menus. We use Square to make reservations and pay for the dinners ahead of time. Because of this, we add a 20% gratuity to the total. By sate law though, any gratuity that's added by the business needs to also be taxed.

Is there a way to tax gratuity in Square? Thanks!

[jjgard]

Hmmmm.  Maybe you could create an item called 'Gratuity' and set it as taxable?  Are those the only gratuities you collect?  Or do you also collect traditional gratuities for servers?  If so, I'd just make sure your bookeeper or accountant knows there are two sources of gratuity revenue and that one of them has been taxed.