Service Charge and Sales Tax

Can anyone tell me whether the service charge that most reception venues charge(20%) is taxed at the local sales tax rate?
Posted on January 25, 2008 at 8:42 am
Bride2BeKatie
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(13) Comments

MrsGG
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I also wanted to piggy back off this thread! Sorry!

I'm an out of state bride planning a wedding in Los Angeles. Can vendors waive the sales tax since I am in a state that doesn't charge sales tax normally?
Posted on January 25, 2008 at 8:45 am
m824
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I'm pretty sure that the service charge is not taxed.
Posted on January 25, 2008 at 9:03 am
Bride2BeKatie
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Okay, thanks! Most of the websites are so vague it's hard to know what they're actually taxing.
Posted on January 25, 2008 at 9:13 am
pinky0121
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Our wedding is down in San Diego and the 20% service charge is not taxed.
Posted on January 25, 2008 at 9:22 am
Bride2BeKatie
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Hmm..I wonder if it differs by city. I'm looking at Robinson Ranch in Santa Clarita and this is what it says:

Sales Tax
All fees, including labor charges, set-up fees, ceremony fees, services charges and food and beverage charges are subject to California state tax.

I always thought gratuity/service charges weren't taxed. So confusing...
Posted on January 25, 2008 at 9:31 am
SointoYou
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Service charges are a total bitch aren't they?! EVERY single wedding location I've looked into (in Southern CA) taxed the service charge as well. So unfortuantely the answer is yes, the service charge is taxable, and no, I don't think it's waived if you live in a different state!! If you're having your wedding in CA all the CA laws apply to you too.
Posted on January 25, 2008 at 12:16 pm
its.nicsknack
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The service tax IS taxed. Its so frustrating. Just another chunk of money to factor into the budget. In the beginning of my planning, I remember disgussing the service fees and taxes with a few venues. Each one of them told me that the 'service fee' is not considered a "tip" so therefore it IS taxable. Can you say "cha-ching." Those darn 'hidden' fees.

GeoffyGirl: Determining tax has to do with where the service/product is being held/delivered. This means you will be taxed the local state tax.
Posted on January 25, 2008 at 6:34 pm
Sparkle060509
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i am finding this out too.  if the 'service charge' is mandatory, then it's taxable.  it's like a double whammy and especially hurts in states like CA that have such high sales tax.  8.75% and it's going up in April.  argggggh

Posted on March 18, 2009 at 12:20 pm
Angela08
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Yes. Our venue charges an 18% service charge. And then the total of the cost + the service charged is taxed at 5% (for Massachusetts)

Posted on March 18, 2009 at 12:25 pm
anj62009
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Ours is 22% and is taxed at the local sales tax rate.

Posted on March 18, 2009 at 12:47 pm
BeltranBride
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05/25/2008

BeltranBride

I'll put the official word on this one (I worked as a catering manager for Westin for a couple years)


Service charge IS taxed.  You arent supposed to tax non-tangable services, but in a screwy way they say that the service charge is to cover the upkeep of the facility (even though its not) so that it is taxable.


To calculate it, take your total, add service and then tax the total.


Even if you are out of state, most vendors will still charge tax since they themselves pay the state tax on the services/sales they provide you with.


California tax law sucks.

Posted on March 18, 2009 at 8:46 pm
PixiedustBride
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Out of state poster - Talk to your venue. You never know unless you ask!


Also I know we have a service charge and have to pay the local sales tax. We live in L.A. but are getting married in Anaheim and will be charged their sales tax. I wasn't sure how that was going to be calculated so thanks BeltranBride for breaking it down. :)


 


 


 


 


 

Posted on March 19, 2009 at 7:12 am
kristinkay
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If you live out of state you can sometimes get it back tooo.. I grew up in Oregon and there is a form you can fill out so that you can get reimbursed for some sales tax that you pay while out of state.. but sales tax is supposed to serve as a way to tax people who are spending money in the area and therefore using the roads/utilities/resources in the area.. so you don't need to be a resident at all. I would call your local tax board and ask them.

Posted on March 19, 2009 at 7:21 am

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