A question for those of you who have a contract with a caterer in NY State: Are you being charged sales tax on the service/gratuity charge.
I have finallyfound the perfect venue, which, of course, costs much more than I had planned. They are charging a 20% "service" charge and NY State sales tax on the total price of per plate plus service. I contacted NY State department of taxation and finance. Tax law says tax does not apply if 1. the charge is separately stated on the bill. 2. if is specifically designated as a gratuity and 3. all the monies are paid over in total to the employees. The caterer is stating the charge separately and swears all the money is going to the employees; but they are adamant about calling it a "service" charge rather than a "gratuity" and charging me sales tax. So if anyone has a caterer who is not doing this, please send me the specifics as I would like to challenge this.