(Closed) I Don’t Think This Is Fair!

posted 9 years ago in Beehive
Post # 3
Member
314 posts
Helper bee
  • Wedding: October 2009

I could be wrong about this, but I think it’s standard for hotels/events venues to charge sales tax in this way. It’s not fair, though — I agree.

If they are legally bound to report income as he stated, there’s nothing you can do to change that. However, I would continue this discussion with them and drive home the point that this represents a change from your original understanding and agreement. Calculate how much more this is going to cost you in the end, and ask the venue to reduce their catering costs accordingly.

 

Post # 4
Member
2030 posts
Buzzing bee
  • Wedding: December 1969

This is standard, but I agree it totally sucks! That is the same way as our caterer handled it and we also asked the same question as you did and did a bunch of research on it to make sure. He’s telling the truth about the laws. Sorry 🙁

Post # 5
Member
1276 posts
Bumble bee
  • Wedding: August 2009

I’m with the above posters, though I do think that given the fact that you asked for clarification at the time of signing, you have a pretty strong argument to ask for some concession.  It’ll work out to be a slightly less than 2% difference (.0925*20).  Depending on the number of people, that’s probably a larger chunk of cash for you than it is for them.  You might just approach them and say that while you understand the tax reasons for the change you did not budget for the extra $X.  Maybe they can discount your food price enough to offset the difference (or at least meet you half way).  The email they sent sounds pretty good-natured…and it sounds like they are willing to own their mistake.  It’s certainly worth taking a shot and talking to them (imho).

Post # 6
Member
666 posts
Busy bee
  • Wedding: March 2010

I agree with fizicsGirl, it certainly cannot hurt. 

Post # 7
Member
1064 posts
Bumble bee
  • Wedding: October 2009

Is the procedure in your contract anywhere? You should be granfathered in to the old system if it is. If not they should discount something to equal the difference.

good luck!

Post # 8
Member
3 posts
Wannabee
  • Wedding: December 1969

It sounds very standard to me. Im sorry you have to go through this.

Post # 10
Member
173 posts
Blushing bee
  • Wedding: December 1969

I should preface this by saying that I’m a lawyer, so I may have a more cynical eye.  Here’s the thing – sales tax has nothing to do with server’s income.  It is a state-imposed tax on the sale.  If you go to a restaurant and leave a tip, you aren’t paying sales tax on the tip.  You may want to look at your state’s sales tax guidelines or even call them to see if they charge sales tax on service charges.  It sounds odd to me.  The service charge would not be subject to sales tax in most states.

Post # 11
Member
652 posts
Busy bee
  • Wedding: July 2009

Yes this is standard, I also asked my venue before I signed the contract and was basically told the same thing

Post # 12
Member
2682 posts
Sugar bee

It is a CA state law that establishments are able to tax the service charge, but I still agree it stinks.  Does your contract say tax is not applied to service charge or was it told to you by the manager?  Maybe he got confused?  Try talking to them, it cant hurt to ask.  If its contracted that sales tax is not applied to service charge, they can not enforce it.  The only thing they can enforce is the new tax rate.

Post # 13
Member
1266 posts
Bumble bee
  • Wedding: October 2009

It’s not fair, but it happens.

Our venue charges quite a large service charge. In the end we compromised with our venue and got it down to about 13% (I think ours was 17%)

Maybe a little negotiation is in order?

Post # 14
Member
1149 posts
Bumble bee

I agree with the others – negotiate with them – and if they won’t give you any $$ off, perhaps they can give you more food, or more time, or something along those lines. 

Good luck and let us know how it goes!

Post # 15
Member
131 posts
Blushing bee
  • Wedding: October 2009

I had an issue with this as well in the state of NY.  I even found a layman’s terms description of the laws of taxing services.  From reading those laws, it seemed to me that the "service charge" the venue applies should not be taxed, as it is not food/beverage, it is paying for the staff.  One venue we looked at discussed this, mentioned it was illegal and they didn’t do it, but many people did that anyways.  I calculated out the two different ways, based on a $75/head cost pre-tax/service charge – tax and service charge separately, or service charge, then the whole thing, including service charge taxed.  The final outcome, with about 150 people, wasn’t really worth arguing with the venue.  Especially, in our case, since we bargained them down to $75/person. Usually they charge $120/head pre-tax on Saturday nights… so I guess I can’t complain.

 I’d recommend doing out the math both ways to see what the difference really comes down to.  Then, either negotiate, or if it’s not worth it, just suck it up.  You don’t want to get on their bad side by arguing over a couple hundred dollars.  Good luck! 

Post # 16
Member
2820 posts
Sugar bee
  • Wedding: February 2013

I don’t think it’s fair, but I don’t think that there’s anything you can do about it other than finding another venue.

The topic ‘I Don’t Think This Is Fair!’ is closed to new replies.

Find Amazing Vendors