@KELLY07 Welcome to the community. If this is a legally required amusement tax that you're permitted to pass on to the customer, I would first make sure you're setting it up in Square as a tax, rather than trying to add it directly to the item's price or as a general fee.
In Square Dashboard, go to Settings → Account & Settings → Payments → Sales taxes and create the amusement tax with the appropriate percentage. You can then choose which items or categories that tax applies to. Square allows different taxes to be applied to different items.
If Square is giving you a message saying your current tax settings prevent you from applying it, I wouldn't try to work around that by creating a service charge. There may be a conflict with another tax setting or the way your existing taxes are configured.
Since this is a location-specific amusement tax, I would call Square Support at 1-855-700-6000 and tell them specifically that you need to collect a local amusement tax in addition to your existing tax configuration. They can look at your account and tell you why Square is blocking it.
I don't know your tax laws, and I would check locally to make sure everything is listed/rung up correctly on receipts.
