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18% service fee and 8.625% sales tax

MrsWmson2be Posted:

18% service fee and 8.625% sales tax

The 18% the hall charges for a service fee doesn't include the 8.625% sales tax?

CLMon7906 Posted:

Re: 18% service fee and 8.625% sales tax

no, the 18% is generally gratuity and only for the servers (maybe bartenders as well)

evnme Posted:

Re: 18% service fee and 8.625% sales tax

the svc fee isnt taxed.

MrsWmson2be Posted:

Re: 18% service fee and 8.625% sales tax

ok, thanks. So I would be taxed the 8.625% only on the contract price, and the 18% gratuity would also be calculated based only on the contract price alone (and not with the added tax)?

jellybean1420 Posted:

Re: 18% service fee and 8.625% sales tax

they should be calculated seperately based on the contract price.

JohnnysGirl350 Posted:

Re: 18% service fee and 8.625% sales tax

I know it seems like a lot right!! My place charges 20% service charge + 8.625% tax.... so much $$$

suven Posted:

Re: 18% service fee and 8.625% sales tax


Posted by MrsWmson2be

ok, thanks. So I would be taxed the 8.625% only on the contract price, and the 18% gratuity would also be calculated based only on the contract price alone (and not with the added tax)?



My service fee was also taxed.
reenielady Posted:

Re: 18% service fee and 8.625% sales tax

If they call the 18% a service fee then it has sales tax on it. If it is a gratuity then it usually doesn't have sales tax.
It really depends if the hall is keeping the 'Gratuity' or giving it directly to the staff. It is a very grey area.
joburgio Posted:

Re: 18% service fee and 8.625% sales tax

I'm in VA and am facing the same issue. There is a 21% service charge and then the tax on top of that. Has anyone else found a way to deal with this? To the best of my knowledge the service charge equals or includes the tips. Any ideas on this would be appreciated!!!

GabrielleandJohn Posted:

Re: 18% service fee and 8.625% sales tax


Posted by suven


Posted by MrsWmson2be

ok, thanks. So I would be taxed the 8.625% only on the contract price, and the 18% gratuity would also be calculated based only on the contract price alone (and not with the added tax)?



My service fee was also taxed.



Thank is illegal. You can not tax a service fee.
Kara and Todd Posted:

Re: 18% service fee and 8.625% sales tax


Posted by GabrielleandJohn


Posted by suven


Posted by MrsWmson2be

ok, thanks. So I would be taxed the 8.625% only on the contract price, and the 18% gratuity would also be calculated based only on the contract price alone (and not with the added tax)?



My service fee was also taxed.



Thank is illegal. You can not tax a service fee.



You cannot tax gratuity - You can tax a service fee, as far as I know.

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