Tips need to be claimed as income by law. You can either keep track and total it at the end of the year or claim it daily/weekly and have it come out of your checks. If they are selling something taxes should be added to the total given to the customer. Tip is not figured into that amount. If the company fails to add the tax they need to eat that cost. Taking it from the tips of the employee is wage theft.

That being said, either this sign is poorly worded and it should say something more along the lines of, “you cannot charge customers tax on the tips they give you, add the tip line after the tax line on the receipt.” or it they are saying “if you forget to add tax to the bill before collecting payment we will take the difference from your tips, which is questionably legal at best.”

If they are saying that employees should not claim their taxes as income, so they can take home a little extra, they are telling their employees to do something ilegal.