Restaurants & Bars: Per-Location Entities, Tips Reporting & Local Licenses

What to know

• Second location in a new city = new licenses + potential new state footprint.
• CA locations each drag $800 + potential fee tiers on apportioned receipts.
• Payroll density makes SUTA/workers-comp shopping as valuable as entity choice.

Per-location costs

Each location typically needs its own health permit, alcohol license (from California's ABC or the relevant state agency), local business tax registration, and seller's permit. If each location is its own LLC, each also pays California's $800 and files its own returns.

Tips and payroll

Large food or beverage establishments (generally those with more than 10 employees on a typical business day, where tipping is customary) file Form 8027 reporting receipts and tips each year. Employers can claim the FICA tip credit for Social Security and Medicare paid on tips above minimum wage.

Where the money is

For most restaurants, payroll tax, workers' compensation premiums, and sales tax dwarf entity tax. Shopping workers' comp coverage and getting sales tax on catering and delivery right usually save more than restructuring entities.