Court Opinion

ID: 7824292
Source: CourtListenerOpinion
Date Created: 2022-09-07 18:03:19.265352+00
Date Added: 2024-06-11T16:30:49.110753
License: Public Domain

Steele Hays, Justice, dissenting. What the majority overlooks, I respectfully suggest, is that in transactions between the Meadowbrook Country Club and its members the 15 percent add-on, or surcharge, to food purchases is not a “gratuity” (as the majority mislabels it), but is an obligatory part of the purchase. It may resemble a gratuity, but the crucial difference is that in the conventional restaurant transaction the gratuity is, as the word implies, gratuitous. The customer is free to leave a tip or, if the service is unsatisfactory, no tip at all. In the transaction between the country club and its members, however, the 15 percent surcharge is mandatory — the members could no more refuse to pay the 15 percent than they could refuse to pay some other part of the total bill. In that rather unique circumstance the surcharge becomes an inseparable part of the transaction and is properly subject to the Arkansas Gross Receipts Act. It matters not at all that the appellee chooses to allocate the 15 percent to the payment of its labor costs, anymore than if it chose to allocate some percentage of the price of each meal to another cost factor, such as utility, maintenance, insurance, replacement, et cetera, so long as it is a fixed part of the charge. The point is, the member agrees to purchase a meal costing $ 10.00, plus 15 percent, for a total charge of $ 11.50 and that is the gross receipt the appellee realizes on the sale.