Is Gratuity Taxed? w/ Poll

candybride123 Posted: May 15, 2009 09:49 AM

Is Gratuity Taxed? w/ Poll

I've read that many halls tax the gratuity! Any thoughts? Experiences?

skinny237 Posted: May 15, 2009 10:00 AM

Re: Is Gratuity Taxed? w/ Poll

Yes, and I think it's ridiculous!

sharivera Posted: May 15, 2009 10:04 AM

Re: Is Gratuity Taxed? w/ Poll

Yes and I agree it is ridiculous!!

AdriandSteve Posted: May 15, 2009 10:08 AM

Re: Is Gratuity Taxed? w/ Poll

ask the hall if u pay the gratuity in cash to not tax it. some will say yes

debzy Posted: May 15, 2009 10:28 AM

Re: Is Gratuity Taxed? w/ Poll

Technically, you should not be paying tax on gratuity. The person who receives the tip pays the tax. If the hall is not claiming it on their tax return, they are passing the tax to you.

candybride123 Posted: May 15, 2009 10:33 AM

Re: Is Gratuity Taxed? w/ Poll

Just called my hall and b/c 'gratuity' is actually a 'service charge' you pay tax... Well, why is it called GRATUITY then? I am at work so I don't have my contract, but I'm sure that little bugger clause is in there somewhere!! It's just another annoying way for them to say likwe 125pp instead of the 175 or whatever that really is.

soontobemrsag Posted: May 15, 2009 10:46 AM

Re: Is Gratuity Taxed? w/ Poll

Posted by AdriandSteve

ask the hall if u pay the gratuity in cash to not tax it. some will say yes

OMG im doing that right now!

FuTuRe MrS MaZz Posted: May 15, 2009 11:12 AM

Re: Is Gratuity Taxed? w/ Poll

Posted by skinny237

Yes, and I think it's ridiculous!

ITA!

Juhgail Posted: May 15, 2009 11:14 AM

Re: Is Gratuity Taxed? w/ Poll

Yes, it is taxed most of the time~

Clover23 Posted: May 15, 2009 11:16 AM

Re: Is Gratuity Taxed? w/ Poll

It is 100% the person receiving the gratuity that is supposed to report it/pay tax on it. I've never heard of paying tax on gratuity! But I'm a bit worried now lol!!!

candybride123 Posted: May 15, 2009 11:21 AM

Re: Is Gratuity Taxed? w/ Poll

'Tips or gratuities voluntarily given are not subject to sales tax, however mandatory gratuities and service charges are taxable as receipts from the sale of food or drink unless:

1. the charge is separately stated on the bill or invoice given to the customer; and

2. the charge is specifically designated as a gratuity, and

3. all such monies received are paid over in total to employees '

See, Department of Taxation and Finance

candybride123 Posted: May 15, 2009 11:44 AM

Re: Is Gratuity Taxed? w/ Poll

And I believe that my contract definitnely falls under ALL 3 requirements to be exempt from tax!

AND even if it's in the fine print somewhere it wouldn't matter b/c a hall can't impose a non-existent government tax on you through a private contract!

Ugh. BUT who wants to piss off the hall over $400 right? IDK what to do!

cateydee Posted: May 15, 2009 12:52 PM

Re: Is Gratuity Taxed? w/ Poll

when i signed my contract, they gave us the song and dance about how its not 'gratuity' but a 'service charge'. honestly i dont know if it even works in their favor to have to charge tax...

anneandchris Posted: May 15, 2009 01:01 PM

Re: Is Gratuity Taxed? w/ Poll

Hate to tell you girls but this is something you can't fight.

It is a service charge not a gratutity. Yes basically the same thing but in the eyes of the government it is not.

It is not just here in NY and it is not just catering halls.

I guess you can call it a loop hole or whatever you want.

Does it s*ck yes -- but it is what it is and it is not worth you fighting over and causing yourself stress.

You can try asking if you pay cash if they won't tax it but that is a long shot. Most places in these times wont take the chance.

skinny237 Posted: May 15, 2009 01:04 PM

Re: Is Gratuity Taxed? w/ Poll

Posted by AdriandSteve

ask the hall if u pay the gratuity in cash to not tax it. some will say yes

I tried that and it didn't work. Others have tried too and I've never heard of it working. It's really the dumbest thing ever.

MrsCM Posted: May 15, 2009 01:51 PM

Re: Is Gratuity Taxed? w/ Poll

Yes and no. Find out for certain but here's the deal. A 'service fee' is different than 'gratuity' and a service fee can be taxed while a gratuity is not. So if your RH is $100/head plus tax & service fee of 20% it would all be taxed. But if they just tell you for example that gratuity is not included, it will not be taxed.

jlt2010 Posted: May 15, 2009 02:00 PM

Re: Is Gratuity Taxed? w/ Poll

when i was visiting RHs, each one told me a different policy but it seems like most places tax the gratuity and justify it will ridiculous reasons. i'd check to make sure.

oldladybride Posted: May 15, 2009 02:08 PM

Re: Is Gratuity Taxed? w/ Poll

if the rh calls it a service charge it is taxed. if the rh calls it a gratuity it should not be taxed. the rh we used called it a gratuity and I am pretty sure it was not taxed.

why they do it one way or the other I am not sure but I do wonder if the places calling it a service charge, when it comes to Uncle Sam - - do they suddenly call it a gratuity, on their books and pocket the tax??? not sure if that is actually possible but cynical me has that thought.

candybride123 Posted: May 15, 2009 02:14 PM

Re: Is Gratuity Taxed? w/ Poll

ITA stinks to stress!

soontobecruz Posted: May 15, 2009 02:16 PM

Re: Is Gratuity Taxed? w/ Poll

I believe if it is called a 'service charge' they can tax it. If it is written as 'gratuity' they can't... I'm not 100% sure though. Def something worth looking into