Does anyone know if halls are allowed to tax the gratuity? My sister is looking to book a hall for her wedding and the manager told her that they take the base price, add on the gratuity and THEN tax that amount. I don't think they are allowed to tax gratuity. I have never heard of that. When I got married at JA's, they didn't do that. It was the base price ($68) plus tax ($5.78) = $73.78. Then go back to base price ($68) and figure out 18% gratuity which is ($12.24) and add that to the $73.78 which equals $86.02. Does anyone know?? Thanks,
Denise
Sassy
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Re: Betty and Karen
I'm calling TODAY to ask my BM !!!! Tax is already pretty hefty, to be getting gratuity based on that !!!
jwalters27
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Re: Question, please help us!!
They are absolutely not allowed to tax the tip. I work in catering and it is illegal. I believe there are IRS regulations about it.
nylisa
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Re: Question, please help us!!
It does not matter which way they do it, you are still paying the same price. I figured out if: $X (price per person) times the % of gratuity times tax = amount due or $X (price per person) times the tax times the % of the gratuity = amount due You get the same price. Try it and see if you get the same price.
DeniseMang
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NYLISA
Yes you are right, you get the same price. But I am talking about going back to the base price and adding the gratuity. Not adding the gratuity of the taxed price. See what I mean. Just go back to the base price to add everything and you will see a lower amount!
susans
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Karen
On my contract it reads Minimum Guest Guarantee 150@ $ per person. Exclusive of 20% Service Charge and 8.5% Sales Tax. (Service Charge may be used for the compensation of its employees, including service and non-service personnel and for such other purposes as the Harrison House believes to be appropriate. Sevice charge is not a gratuity, therefore, must be taxed according to New York State Law)
You're saying this isn't legal? If I had it in writing, maybe I'd argue my case.
michele31
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Re: Karen
My hall calls the charge a Service Charge, which an be taxed. A tip cannot. So they get around this by calling it something else. My hall also told me that it does NOT 'tip' any of the staff. It is used by the hall to PAY the staff.
JENHOS
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Re: Question, please help us!!
Milleridge taxes after the 17% 'service charge'
DeniseMang
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Re: Question, please help us!!
Read Karen32's response right under yours on the first page of this thread. She is saying its illegal. I don't know. IMO, I think it is illegal and they get away with it due to a play on words. No biggie in the grand scheme of things, though!
DeniseMang
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Susans
My previous post was in reply to Susans.
susans
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Re: Susans
I'm hoping that if a CPA can come up with the written proof that this is illegal then I'll be more than willing to go back to my site and refuse to pay the tax on this 'service charge' It's only about $415, but it's the PRINCIPAL.
We also have to TIP in addition to this charge and that really irks me
SMDC2012
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Re: Question, please help us!!
not for nothing but this post is from 2002. This is also a Brides Helping Brides forum.
Furthermore, when booking with our RH we asked what the 20% fee is and they said its a service charge for overhead, not a tip for the staff, waiters, bartenders etc. They even said many people have a misconception that its the tip when it isn't. People should ask questions when signing a contract and do some research first.
