Sales Tax on Service Charge
Darn it! Just found out that the 20% service fee which most venues charge for food and beverages is taxed. That is a few hundred extra dollars to take into consideration when calculating your wedding budget. This is of course dependent on where your wedding is so you should double check with your venue and local tax board.
Basically for our Northern California wedding, our total for food was $15,436 with an additional $3,087 for the required 20% service charge. But instead of getting taxed on just $15,436, we got taxed on both the $15,436 and the $3,087. OUCH!!!!
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Current Sales Tax % = 8.25%
Cost of Food = $15,436
Sales Tax for Food = 15,436 x 0.825 = $1273
20% Service Charge for Food = 15,436 x 0.20 = $3087
SALES TAX on Service Charge = $3087 x 0.825 = $255
A GRAND TOTAL OF $1528 on SALES TAX for FOOD & SERVICE CHARGE!!!! INSANE!!!!
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Here’s a link to a forum post with some helpful information on this matter:
http://www.projectwedding.com/post/list/service-charge-and-sales-tax
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We ended up getting married in Monterey so the sales tax is 1.25% lower which probably saved us a few hundred bucks, but it probably evens out with all the parking/gas/travel costs.
