Banquet Room Rental

Banquet Room Rental https://wahospitality.org/wp-content/uploads/2016/05/shutterstock_144168427.jpg

Does sales tax apply to banquet room charges?

Restaurants may rent out part of their facilities to others for banquets, parties, meetings, etc. In most cases, if you make a separate charge for the use of a banquet or meeting room, retail sales tax does not apply. Instead, this income is subject to B&O tax under the service and other activities classification. (However, banquet/meeting facilities provided by a lodging business (hotel, motel, etc.) are subject to sales tax.)

Reference: WAC 458-20-124; WAC 458-20-12401 and WAC 458-20-119.

If a single charge is made for both a banquet room and meals/drinks, the total charge is subject to retailing B&O tax and retail sales tax must be collected.

When an independent caterer charges their customer for their cost (and any markup) of renting a banquet room, such charge is considered part of the catering charge (much like charges for tables, chairs, flatware, etc.), and is subject to retailing B&O tax and retail sales tax.

Lodging Facility: In all cases, hotel and motel businesses must collect retail sales tax on banquet room charges whether separately stated or not. Hotel and motel businesses should refer to WAC 458-20-166.

Note: Mandatory gratuities are part of the selling price of the food or drinks even if separately stated. See the Gratuities Section.

Reference: WAC 458-20-118

 

Rev. 12/14/14

 


This article is an excerpt from the Handbook for Excellent Restaurant Operations (HERO), published by the Washington Hospitality Association.  Want a hard copy of the whole manual?  It’s one of the many benefits of becoming a member!  Find out more about joining the Washington Hospitality Association here.

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Categories: HERO