My reception hall is charging me tax on the 18% gratuity. Is that right? Also, they are increasing the tax to 8.75%, but I thought that isn't done until September 1st?
nylisa
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That is right. But I don't think it is 8.75%. I thought that it was more like 8.6%.
alina
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No. They should not be charging you tax on gratuity. They charge you tax on the the total amount, before gratuity is added.
So if you owe 1,000, and taxes are 8% and gratuity is 20%, you add 8 and 20 and get 28%, which is how much you have to pay on top of the 1,000, or the total should be 1,280
Betty
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I don't think gratuity should be taxed...it's a tip. I'll have to find out what my hall does b/c that's not really fair
nylisa
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Most contracts read: $amount pp + gratituity + sales tax
Irishbride
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I think mine is charging me for Tax on the gratuity. I will have to find out.
nylisa
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I just tried both ways with my pp and I get basically the same price.
Latina511
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CB did not charge me tax on gratuity. They said that you are not suppose to be taxed on a service.
HearzBellz
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Tax & gratuity are charged separately...they should never be charged on top of one another...btw 18% is a good grat. fee.
alina
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Lisa, you are right with how most contracts read, but gratuity is not taxed.
Think when you go to a restaurant, you double the tax to get the tip... that's b/c tax is 8%, and if you add double that, you're tipping 16% of the full amount...
Also, my hall did gratuity and taxes separately, not charging one on top of another
radiostar
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I asked my hall about that and they told me that 'it's the law' to charge tax on gratuity.
nylisa
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radio, I was told the same thing.
dawnie
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Flowerfield did not tax the service charge.
Irishbride
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Where can we find out what the law states on this type of thing?
alina
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No, its not the same thing.
If you see my example above, and say ok, 1000 total 20% gratuity
total is 1,200, then 8% tax on top of that is $1,296, so the person is overpaying $16 in this case
julykbride
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Thank you all so much! For Suffolk county it is 8.75% Is that for Sept. 1st? I'm getting married next week...
dish1002
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There shouldn't be tax on gratuity. Double check.
HearzBellz
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NYS website should have this answer, also you can e-mail the attorney general of New York.
BTW... the tax law is in effect as of June, according to my accountant (I just asked him).
alina
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It can't be the law. Gratuity is option tip for a good service. They are already charging it ahead of time, but it should not be taxed. your tips at the table at the restaurants don't get taxed.
And if someone give you trouble about it, fine, pay them the extra amount, but deduct it from the Matre-d's fee... Its all going into the same bucket anyway
alina
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julyk, if the tax is effective as of the day of your wedding, you would have to pay the higher tax on the full balance, b/c that is when the services are 'sold' effectively.
