the skinny on your wedding taxes

Taxes. A four-letter word? Obviously not, but it feels like it.

As with any big purchases, taxes will affect your final sales price. Your wedding is no exception. Remember to include your state taxes on projected expenses, such as:

invites
photography albums/photos
dress and tuxes
florist
venue (we’ll talk more about that…..)

Make sure you have a clear estimate from your venue on how much they tax their services and product. For example, some venues here in Evansville, tax their gratuity.

So, here is what your final bill will look like:

19% gratuity

6% gratuity tax

7% sales tax (goes to the state)

1% food and beverage tax

= 33% total possible taxes

What does that mean to you? That $19.95 per plate meal that you are deciding upon, because you thought it fit within your budget, is now $26.53 per plate!

Staggering isn’t it? That’s why you want to really have everything in writing and ask question after question if you don’t understand. There are no stupid questions! Or hire a wedding planner. Either way…get the skinny on the true tax picture!

 

7 replies
  1. Tabitha @ Elite Bridal Concierge
    Tabitha @ Elite Bridal Concierge says:

    Oh God, you are so right! Taxes are very important to take into consideration. Especially, concerning the venue and catering. Their service fees, gratuities, and taxes will add up very quickly and may catch you by surprise. So, I concur to get it in writing and ask a lot of questions upfront about additional charges. Great post!

    Reply
  2. Rick Bucich
    Rick Bucich says:

    That is a great point I had never heard of. Sounded illegal to tax the gratuity so I looked it up. Turns out when gratuity is included, it can become a service charge to the IRS. OUCH! Sounds like something worth bringing up in price negotiations up front.

    Reply
  3. saundra, event engineer
    saundra, event engineer says:

    Thanks Tab!

    Rick, it gets better than that. Some states are trying to change the laws at the state level on what is taxable, they are implementing “consulting SERVICES”. A videographer in town was contacted recently and told he had to add 7% (our state sales tax) to his “services”. Not the DVD’s, the “services”.

    What does that mean for us? We will have to pass that tax along to our customers.

    What does that mean for the general public? Be careful about shrugging your shoulders like it won’t affect you. Consider your consulting and or services you pay for. Accountant, Satellite, Cable, Electric, Lawn, Construction and much more could all have a state sales tax added on.

    Scary stuff.

    Reply
  4. Karen
    Karen says:

    Here in California, we caterers must tax Service Charges by law. (Regulation 1506, I think, if you care to read it.) Contrary to popular belief, a Service Charge is not a gratuity.

    Reply

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