Irritated about taxing

[meresal]

I was meeting with FMIL to go over the quote for the bridal shower and noticed something on the quote from their program...

They are taxing us on the Regular costs & mandatory the service charges!!!

Has anyone else noticed this with their venues?? I know it''s not a huge amount on money when you calulate the difference, but it''s just the fact of the matter. Is it right to tax the tip you are making me pay up front??

 

[miraclesrule]

Meresal, it''s standard in the hospitality industry. I didn''t really know it until I started working for a large hotel. Not only are the service charges increasing to a whopping 22%, but to get taxed on that portion is a double whammy. It sucks big time.

It''s customary so it''s good to remember that in the budgeting.

 

[cara]

It''s the law. If the service charge is mandatory, then its really part of the cost being billed to the client by the service provider as their fee rather than a discretionary bonus amount the client voluntarily chooses to leave, so the government wants their sales tax on it. Sucks!

 

[Gypsy]

Date: 2/21/2009 2:49:01 PM
Author: cara
It''s the law. If the service charge is mandatory, then its really part of the cost being billed to the client by the service provider as their fee rather than a discretionary bonus amount the client voluntarily chooses to leave, so the government wants their sales tax on it. Sucks!

Ditto.

 

[Clairitek]

I found that all but one of the venues I''ve looked at did this sort of thing. Really annoyed me too but I realize that if its the law then there isn''t much they can do about it.

 

[AmberGretchen]

Yup - all the vendors I dealt with who had mandatory gratuity taxed on it. Definitely sucks (I actually resent a mandatory gratuity on principal myself - I''m a generous tipper, but if I don''t get good service I like to have some control over letting people know financially). I agree with the others - definitely a bummer, but not unusual.

 

[honey22]

I must say, this is what I love about our pricing system in Australia. It''s against the law to quote a price on anything without our taxes included. Saves confusion, people thinking are getting ripped off or misled and allows easy comparison of prices. So much easier. I would be lost if I had to calculate stuff myself.

When I went to the US I was only 16, and I couldn''t for the life of me understand why everything got more expensive all of a sudden on the trip from the shelf to the cash register

 

[Izzy03]

Yes yes. I am not sure if it is 22 or 20 percent for mine, then another 6 percent on top! The stupid part is that they are add "GRATUITY" fees (and taxing them) to my linens. Are you F****** kidding me?

 

[luvbug]

Just wanted to chime in b/c service charge held us up from booking our wedding for over a month. Our venue has a 22% sevice charge (which is taxed) and we figured this was gratuity. When we got the contract, the fine print stated the service charge is not a gratuity and tips are not included!!

It was hard to swallow the wedding going up 20% - and we almost backed out. Make sure you check if the "service charge" is actually gratutity.

 

[Clairitek]

This whole thread now has gotten me thinking about the service charge vs gratuity thing! I have always assumed that the service charge WAS the gratuity! I just emailed the venue we are thinking of booking to get to the bottom of thing. I have a feeling the news won''t be good.

Thanks Meresal and others for bringing the difference to my attention.

 

[DiamondsforDee]

If there was a 22% service charge I most certainly would not leave a 20% gratuity. I would ask what the service charge was for and if the waiters and bartenders received any share of that. If not, I would want to know exactly what the venue was doing that justified a 22% service charge on top of the regular charges for which they are already making a profit. I have never heard of such a huge service charge and I looked at venues in pretty darn expensive areas of the US. I would definitely have sent FI to negotiate that one. He is much meaner than I am.

The taxes thing irritated me too, but now I just think in terms of the bottom line without the break down of taxes and gratuities and it makes me feel a tiny bit better.

 

[meresal]

Thanks for the feedback. I had no idea it was a law, and that simple answer from the venue would have appeased my mind. All she said to me, was, "This is industry standard".

luvbug: A 20% SC which "they" don't consider gratuity?!?! I'm sorry but that is outrageous. If they charged me that, I would hope they weren't expecting a tip on top... because they definitely wouldn't be getting one.

 

[Clairitek]

I just heard back from the sales manager at our first choice venue. Thankfully, I was right to assume that the service charge was synonymous with gratuity in their eyes. I just sat there for the last hour thinking that we would have to start all over again... AGAIN!

Meresal- It is weird that they didn''t give you more of an explanation. If I were in that industry and I saw an adverse reaction to something in the face of a bride I would certainly be doing my best to explain the how and why of whatever was bugging her.

 

[newbie124]

Date: 2/23/2009 9:57:33 AM
Author: luvbug
Just wanted to chime in b/c service charge held us up from booking our wedding for over a month. Our venue has a 22% sevice charge (which is taxed) and we figured this was gratuity. When we got the contract, the fine print stated the service charge is not a gratuity and tips are not included!!

It was hard to swallow the wedding going up 20% - and we almost backed out. Make sure you check if the ''service charge'' is actually gratutity.

This is the same case for our caterers. Although I didn''t find out until after we had booked them. They have a 20% service charge on the food costs in the contract but told me that isn''t considered gratuity, although they did stress that tipping is optional and up to us to determine amount.

I was surprised b/c all of the other caterers we got quotes from included hourly staffing fees and then a 20% service charge that they counted as the gratuity. I did grumble about this, but have come to terms w/ it mostly b/c our caterer''s 20% charge is much less than the hourly staffing fees the other companies would have charged in addition to mandatory tip....and at least in this case we''re able to determine how much we want to tip ourselves (it will most likely NOT be another 20%, though!).

 

[luvbug]

Yup, they don''t consider the service charge a tip (apparently it is for the wait staff salary, coat check, bathroom attendants, chefs, etc. etc) but tipping is optional. I probably won''t be tipping 20% now, but everyone is so attentive & I expect they will be that day too - I feel bad not doing so.

We were so shocked my mother (master haggler) spent hours on the phone with manager after manager and was only able to get 2$ off per head (gee thanks). I called quite a few other venues and found they had the same policy; apparently the service charge is a new phenomenon over the past year or two - maybe has to do with my area as well.

We really considered throwing in the towel and eloping, but we truly love the place and I felt better knowing a lot of places are doing this now so we don''t have a super sneaky caterer.

 

[meresal]

A little irony for you... I just updated my email, and got my daily Knot Mail: "Top 10 Hidden Wedding Costs: #1- Service Charge"

http://wedding.theknot.com/wedding-planning/wedding-budget/articles/10-hidden-wedding-costs.aspx?MsdVisit=1

I definitely budgeted for the 28%... however, there's is no way in He!! I would have known or even considered budgeting for 48%. At my venue, that would be almost $12,000 in SC, taxes, and gratuity.

Just double checked, and my reception contract does say, "Gratuity is included with the SC".

Clairitek: It surprised me as well. When we met with her to look at everything she was bubbly and congenial. Then FMIL got the "quote". It was down right insulting. She obvoisly thought that we were airheads with the hubby's credit card. She quoted us $7400 for a freaking bridal shower. We talked about sandwich and vegetable trays, and she came back with things along the lines of a $580 carved ice bowl for cocktail shrimp and tray passed crab cakes as you come onto the vessel!!

I called and left a message at her office about the tax question, and she returned my call from her home, with a cold, and a very sour attitude. That's when I got the response, "It's industry standard".
FMIL is calling her today to go over some of the wording on the contract (or lack there of), and OUR quote which is thousands of dollars less and much closer to what we had originally discussed.
We'll see how it turns out, but when you provide a quote that has absolutely nothing to do with what we discussed, red flags start flying in my book. Makes me wonder what costs she is going to try to hit us with after the shower?

 

[newbie124]

This might be helpful...A friend of mine got married a few months back and used a pretty well known catering company in the area. When they went over budget w/ their catering manager, she told them that for most weddings of their size, the clients usually give a lump sum around $500 to tip the staff. That is faaaar below 20% of what they were spending for food/drinks. My friend had about 130 guests and I''d estimate that food was about $50-70/head.

So it might be worth it to at least ask your catering person if there is a standard amount most people give (they may not give you a specific answer, though...when I asked mine, they just reiterated that it''s optional and completely up to us...but it still doesn''t hurt to ask!)

I also talked to a friend of mine who is a private chef/caterer. He does really high end events (and charges as such...although given the economy, he''s recently had to lower his prices). But before he told me that they usually expect around $40 per server.

 

[mayachel]

Go ahead and be irritated, rant and rave

I agree that it is totally inappropriate. 20%+ service charge=tip has been included in my book, and most budget bridal books. With the expectation that if an individual goes above and beyond you may wish to hand them a $10 cash tip personally. It is underhanded, but I''ve heard from others that tips added to a final bill at weddings often never make it to the servers.

I''m not sure where to check this (yet) but I also read that the tax on service does not apply in every state, even though some vendors tell you it does, so it is worth checking what your state requires tax on. For example, renting a space is not taxable, but as a package thing where the bill states the cost of food pp and the site fee is included--tax away.