Post # 1
Need some legal/tax advice when figuring out my venue contract and tax. I’m having my wedding at a Marriott in Lancaster, PA and they charge a 21% Service Charge and 6% Tax on everything. I brought it to their attention that there is no tax on alcohol in PA and the Marriott agreed.
Now they are saying there is a tax on the 21% service charge.
I always thought you couldn’t apply tax to a service charge. Am I mistaken?
Post # 3
Ask your local chamber of commerce… this can vary by state and I think by city
Post # 4
I’m in NJ and we paid a 20% service charge and 7% tax seperately on food/service and alcohol. It was an extra $700. I just looked at our contract to see how they did it. I don’t know about PA,tho.
Post # 5
Its a bit shady, but depending on how they define a “service charge” (which, btw is not the same as a tip) you can be taxed on it. I checked with my venue about this as well, and the answer I got (in NY) was that because a service charge was not the same thing as a tip (in that it isn’t discretionary) they were able to tax it, because they would have to tax their servers on that amount of their income.
Post # 6
I used to live in PA ever since I was a child but recently moved away but I always thought that there was no tax on food. But since this is a service charge, it would be taxable.
I did a quick search and found this.
Sales & Use Tax
Pennsylvania imposes a 6% state sales tax on taxable goods and services (exemptions from sales tax include food, clothing, drugs, textbooks, resale items and residential heating fuels). A local sales tax of 1% is also collected on the sales of taxable goods and services in Philadelphia and Allegheny counties (for a total of 7% sales tax).
* Local sales tax on motor vehicles is determined by the resident address of the purchaser, not by the location of the purchase.