(Closed) Venue's "Administrative Fee" is taxable? is this right?

posted 6 years ago in Food
Post # 3
Member
5662 posts
Bee Keeper
  • Wedding: August 2012

I don’t know for sure but, I’m going to say no. You can’t tax someone on a fee and they are doing their calculations ass backwards.

Post # 4
Member
663 posts
Busy bee
  • Wedding: June 2017 - Vegas Wedings

Our “Admin Fee” is pretty much a forced tip. It should not be taxable.

Edit: What venue is this?

Post # 6
Member
663 posts
Busy bee
  • Wedding: June 2017 - Vegas Wedings

I just looked some stuff up and apparently this is legal. Tips are taxable. (Im assuming your venue is working similar to ours and that this admin fee is a tip they are billing you for).

Im glad you posted this. I need to ask my venue about their “Service Fee” as Im going in about an hour to put our deposit down and sign the contract. Thank you MsTargaryen:  

Post # 7
Member
6256 posts
Bee Keeper
  • Wedding: March 2014

Good to know; I’d have never thought about this had you not mentioned it. Thanks!

Post # 9
Member
224 posts
Helper bee
  • Wedding: August 2011

I work at a mini storage place, I know its not exactly the same thing but we also charge an admin fee of 15.00. We do tax on this so I am pretty sure it is legal although it does suck.

Post # 10
Member
663 posts
Busy bee
  • Wedding: June 2017 - Vegas Wedings

@MsTargaryen:  Just as a comparison, we are using the local Marriott for all the same things as you (ceremony, reception, reception food, drinks, plus some various other things). All food and drinks are being charged 24% “Service Fee” and 6% State Tax. We were outright told that the service fee is prety much tips for the carvers, bartenders, servers, etc, and to not worry about tips at the end of the night. Non-consumables (decor and ceremony site rental) is only being charged the state tax.

Post # 11
Member
1548 posts
Bumble bee
  • Wedding: November 1999

It does vary by state, but in NY the following applies:

Mandatory gratuities are different because they are automatically added onto the bill given to the customer. However, a mandatory gratuity is not taxable if all of these conditions are met:

  • the charge is shown separately on the bill;
  • the charge is identified as a gratuity; and
  • the business gives the entire separately stated gratuity amount to its employees.

If any of these conditions is not met, the mandatory gratuity is taxable, along with the rest of the bill.

Service charges or other charges not specifically listed as gratuities on a bill or invoice are subject to sales tax.

Post # 12
Member
3082 posts
Sugar bee
  • Wedding: July 2014

I had that “administrative fee” at every single venue we went to AND they still suggested that we give the madride a tip! They might as well just include that 20% fee in the price per plate of the venue. 

Post # 13
Member
663 posts
Busy bee
  • Wedding: June 2017 - Vegas Wedings

I asked earlier today when we were going over the contract. Our service fee will be taxed. Bleh. I love this venue and I guess Im happy that there wont be any surprises after but between the service fee and tax the actual reception cost is ~ 30% higher than I initially thought. I feel your pain OP.

Post # 14
Member
9955 posts
Buzzing Beekeeper
  • Wedding: December 2012

It does vary from one jurisdiction to another when it comes to how Taxes are applied (Country – State / Province – County – Municipality).

Generally speaking Taxes are applied to things in 2 categories… GOODS or SERVICES (and sometimes at different rates)

If Gratuities are listed seperately on an Invoice (or added on by a Customer afterwards) then that usually is calculated on the BASE PRICE, and in most places non-taxable

Looks like AmyFarrahFowler: has posted what the requirements are for NY State.

Admin Fees, Services Charges, Delivery Costs etc fall under the category of SERVICES, and therefore appear to be taxable in NY State.

Hope this helps,

 

 

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