Is everyone paying tax on their gratuity...

babeyblu16 Posted: Jun 30, 2003 07:22 AM

Is everyone paying tax on their gratuity...

My hall is telling me it is a new law as of Jan 1st that they must charge tax on gratuity. Wanted to see if anyone else was told this?

trish101003 Posted: Jun 30, 2003 09:06 AM

Re: Is everyone paying tax on their gratuity...

I was told this too by my reception hall, though I wasn't sure if that is the way its supposed to work. I think it stinks.

Lunatrek Posted: Jun 30, 2003 09:10 AM

Re: Is everyone paying tax on their gratuity...

Nooo!!! That is BAD!! You should never ever pay tax on gratuity... that's like 8.75% on top of 18% gratuity! That's crazy!!

I am surprised places are doing that, I was always warned not to book anywhere that charges tax on gratuity when I was looking for my reception hall. I guess it's a new thing, but I know that I wouldn't go for anyplace that did that. Sorry!!

Lunatrek Posted: Jun 30, 2003 09:11 AM

Re: Is everyone paying tax on their gratuity...

holy cow, babyblu... I just realized you are a Watermill bride too! I am going there tonight, they better not spring that cr&p on me!! It's written in my contract that tax comes first, then gratuity.... oh boy, I am worried now...

Dee7772 Posted: Jun 30, 2003 09:23 AM

Re: Is everyone paying tax on their gratuity...

I am being taxed on the per person price and then the 18% gratuity is added to that.

Lunatrek Posted: Jun 30, 2003 09:59 AM

Re: Is everyone paying tax on their gratuity...

Dee, that is what the WMill told me too, at first. But from what Babyblu said, it sounds like they are changing something. I am going to FLIP OUT if they make me pay all that! I planned on going tonight anyway, to pick out my menu, so we'll see what they say...

babeyblu16 Posted: Jun 30, 2003 10:03 AM

Re: Is everyone paying tax on their gratuity...

Yes they told me tax first then gratuity but when they gave me my total they said a new law passed in January where all catering halls have to pay tax on the gratuity now. I wanted to see what other halls were saying.

Lunatrek Posted: Jun 30, 2003 10:31 AM

Re: Is everyone paying tax on their gratuity...

So what happened, they are making you pay it? I would refuse. I know my mom is going to have a fit if they try to do that. Ugh, I am freaking out now!

deby Posted: Jul 01, 2003 02:08 AM

Re: Is everyone paying tax on their gratuity...

Girls, don't panic! The change is better for you. It seems to me that gratuity then tax, is better than tax then gratuity:

assume 8.75 % tax and 18% gratuity on $100 per person plate:

if it's gratuity then tax:
100 * 18% = 18
118 * 8.75% = 10.33
total= 100 + 18 + 10.33 = $128.33 per person

if it's tax then gratuity:
100 * 8.75 = 8.75 tax
108.75 * 18% = 19.58 gratuity
total= 100+8.75+19.58= $130.04 per person

In my opinion, they should not be doing either- they should not be taxing the gratuity nor should they be putting gratutity on the tax...it does not make sense... but they all do it anyway.

AtticaQT Posted: Jul 01, 2003 11:55 AM

Re: Is everyone paying tax on their gratuity...

bump

Lunatrek Posted: Jul 01, 2003 11:57 AM

Re: Is everyone paying tax on their gratuity...

Thanks for bumping.. I posted another comment about the same topic.

jenny2penny Posted: Jul 01, 2003 11:58 AM

Re: Is everyone paying tax on their gratuity...

I thougth grat is always the last thing done, like when you are at a restuarant you get the bill/with tax, then leave a tip.

butterfly20 Posted: Jul 01, 2003 12:02 PM

Re: Is everyone paying tax on their gratuity...

maybe Ron knows the legal answer?

jlm2004 Posted: Jul 01, 2003 05:12 PM

Re: Is everyone paying tax on their gratuity...

The place where I am getting married very clearly stated they do not tax gratuity or calculate gratuity on taxed amount.

Not sure why they seem to be the only place doing this though.

Maybe it is going to change but he told us very clearly that they are separate calculations (as I think they should be)

At restaurants - you are only supposed to tip on pretax amount so why is it different for catered events?

BY THE WAY LADIES - ALWAYS NEGOTIATE THE SERVICE CHARGE!!!!

Many places will drop it 1-3% for just asking.
It isn't really gratuity in most places - they expect that in addition to service charge. The service charge can be wages, linens, etc and it is negotiable.