I have heard some complaints about the hall charging their 'service charge' and then tax on that additonal 18%!!! How many of you found that to be true? I want to plan ahead... plus I am going to see my BM on Friday and plan on bringing that up!!
busybee705
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Re: Tax then tip... or tip then tax?
A banquet manager in Queens told me that charging tax on tips was illegal.
Thanks for bringing this up. I will make sure my hall doesn't try to do this.
Suzannebride
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Re: Tax then tip... or tip then tax?
I was told there is a difference between a gratuity and a service charge. They can tax on a service charge. Make sure to ask which you will be charged for. The gratuity and tax should both be taken from the subtotal. If you get a service charge, that will be from the subtotal and then the tax will be on top of both. It can be the difference of a few hundred dollars.
agentangel
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Re: Tax then tip... or tip then tax?
Posted by Suzannebride
I was told there is a difference between a gratuity and a service charge. They can tax on a service charge. Make sure to ask which you will be charged for. The gratuity and tax should both be taken from the subtotal. If you get a service charge, that will be from the subtotal and then the tax will be on top of both. It can be the difference of a few hundred dollars.
Agreed. If it's 'service charge' then taxable. If its 'gratuity' then nontaxable. What's the exact wording on your contract?
Reesa
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Re: Tax then tip... or tip then tax?
It actually works out to be the same. --Unless I'm delirious!!! I remember being concerned about this--I just did a test on $200---& it was the same either way--I guess if they do the 18% after taxes its just more in tips???
prindia
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Re: Tax then tip... or tip then tax?
add the service charge first then tax
Suzannebride
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Re: Tax then tip... or tip then tax?
Posted by Reesa
It actually works out to be the same. --Unless I'm delirious!!! I remember being concerned about this--I just did a test on $200---& it was the same either way--I guess if they do the 18% after taxes its just more in tips???
That's only a $3.15 differecne, but if you were talking $20,000 which is more likely, then there is a difference of $315.
Reesa
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Re: Tax then tip... or tip then tax?
eek! Math was never my best subject!!! Thanks for explaining!!
Suzannebride
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Re: Tax then tip... or tip then tax?
No problem! (I think it helps if you do billing for a living! )
Reesa
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Re: Tax then tip... or tip then tax?
halfpintny
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Re: Tax then tip... or tip then tax?
I had this same complaint when booking the hall...yes, the purposely call it a service charge which IS a gratuity and you get taxed on it. Not one hall I spoke with would alter this method...just another inflated wedding thing to deal with
eogara
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Re: Tax then tip... or tip then tax?
My hall called it a service charge but it was applied after taxes, not before. Although it may be 'legal', it's certainly not ethical to tax that amount (basically, they're pocketing that extra) and is something I would definitely bring up with them. Unfortunately, it may be too late if the contract is already signed and that is how it's worded.
