Post # 1
I have this issue with my caterer. CA’s sales tax went up by 1%. When I signed the contract it was before the tax increase. Although as I am giving them final head counts i see that they have raised the tax on my bill. They say they are correct incharging me the new rate.
I think that since I signed an agreement on the price per head (which I believe is a fixed price once contract is signed) they should stick with the old rate.
Anyone else having to deal with this or can explain if they are right, why?
Anyone out there a tax lawyer?
Post # 3
- Wedding: June 2010 - The Mountain Terrace, Woodside, CA
Ohhh, I don’t have an answer for you, but am super curious about this myself. The 9.25% tax (at least in my area of California) is WAY to high now, and when we’re talking wedding prices, 1% or even 0.5% above your budgeted and contract specified amount is a LOT! I would have issue too, but I have no idea what is legal in this case.
Post # 5
i’m pretty sure that they have to charge you the tax that is effective on the day you recieve the service per state tax law, regardless of the amount on the contract. :/
Post # 6
I have a catering contract that specifically states I am being offered the 2008 rate, because it was 2008 when I booked my event. My tax will be the same. I don’t see why the tax rate should increase after the contract is signed. Isn’t that why people were supposed to rush out and buy a car before the tax hike? I know the lawyers will chime in about the differences between a service and a good, but it’s the kind of logic that might appeal to your caterer.
Post # 7
I am on the same boat as you are. Although I signed the contract way before the tax hike, I am going to be charged the higher rate because according to the banquet manager, "the tax is not based on when you signed the contract, rather, when the service is performed." He told me that some brides even offered to pay the bill in full before the day of the tax hike to avoid the tax increase, but they could not do it since the service will be performed after.
Post # 8
This is what the doc the caterer sent to me. It’s from the State Board of Equalization.
<span style="font-size: 12pt; color: #1f497d; font-family: ‘Century Gothic’,’sans-serif’">And as I understand it correct me if I am wrong, once the contract was signed it was agreed upon with the price per head. Wouldn’t that qualify as a fixed price?
<span style="font-size: 12pt; color: #1f497d; font-family: ‘Century Gothic’,’sans-serif’">I don’t think my caterer is trying to rip me off but I am not sure if their accountant is correct.
Post # 9
I had the same issue and ended up paying the new sales tax for the same reasons stated above. The tax charged is based on the date the services is rendered so even though the contract was signed last year, we’re responsible for the difference because the state raised taxes recently. As a wedding vendor myself, I understand because we have to pay taxes based on 2009 earnings and the state doesn’t care when you signed a contract. That being said, we’ve decided to take the hit and honor the previously agreed upon total $ amount for clients that booked us prior to the tax hike.
Post # 10
Well I’ve tried to upload the Document from the CA State Board of Equalization but it keeps failing. Oh well.