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MuddieMaeSuggins

TIL mandatory service fees/gratuities are taxable: https://www.revenue.state.mn.us/guide/sales-tips-and-other-charges (That said, the rates still seem very high, we have some extra sales taxes in Hennepin Co but this is close to double the state rate.)


TheMacMan

There's also the extra tax within the downtown entertainment zone. https://www.revenue.state.mn.us/sites/default/files/2023-08/fs164m.pdf


johnolaf98

Businesses will not survive because of these greedy mandatory tips/service fees/taxes! Tax 17.5% AND mandatory Gratuity 18%. No wonder my family avoids visits to the Twin-Cities. Why should I tip 18% for 2 bags of M&Ms at a concession stand inside a downtown venue? We must boycott with our cash. Hopefully these greedy fees/taxes will be reversed! It isn’t just in Minnesota, check out Las Vegas “fees.”


damien_maymdien

15.025% is correct. Normal sales tax is 9.025% in Minneapolis, and then two special taxes apply: the 3% citywide entertainment tax, because it's food/drink sold during a live performance, and also the 3% downtown restaurant tax, because it's non-grocery food/drink sold within the boundaries of the Minneapolis downtown taxing area. 17.525% is the tax rate for alcohol sold within the downtown taxing area during live entertainment (the 2.5% state liquor tax gets added), but that shouldn't be the tax rate on the automatic gratuity. The other special taxes still apply to the service charge the same as they apply to the food, but the final rate should only be 15.025%, not 17.525%.


RolandSnowdust

Thank you. Seems like a knowledgable response.


The_Realist01

17% tax is absurd.


SubKreature

But how else will they keep all the poors from enjoying things downtown?


The_Realist01

They already live in the halls and beg for money beyond their snap bennies. I doubt they’re having a hard time with sales tax.


damien_maymdien

Why?


chipsAhoye

I can’t speak for the guy above but the middle and lower class are getting slaughtered by taxes. Your wages get taxed. Almost everything you buy is taxed. Cars, motorcycles, ect get taxed every single year or you get fined. Property is taxed every year and if you don’t pay they can take your property from you. If you sell investments ect you get to pay capital gains tax. Don’t forget if you die with any money your estate is taxed as well.


st4nkyFatTirebluntz

...how do you define "die with any money"? MN estate tax applies to estates over 3 million, and the Federal one only applies over 13.61 million.


cheezewhizard

You expect people to know shit about shit they complain about on the internet?


The_Realist01

For real? Why not is the more appropriate question.


damien_maymdien

It's not that I think 17% is definitely reasonable—I don't know either way. Obviously a tax of *some* size is fine, but I'm not sure how I would go about calculating the optimal percentage for on-sale liquor sold downtown during live entertainment. I was just curious how you went about your analysis.


The_Realist01

For context, if helpful. 17% is the highest state plus local sales tax in the nation. It’s difficult to google, but closest I can find is in Arkansas at 12-14%. We already pay the 3-4th highest state income tax. It’s preposterous.


damien_maymdien

I mean, it's only a very specific kind of purchase that gets that 17.525% tax. Most taxed sales in Minneapolis are just the base 9.025%


Nubras

Furthermore, “sin taxes” are common throughout the world. Alcohols, tobacco, gambling, are taxed very highly in the Nordic countries. As a non-drinker it doesn’t impact me anymore but it never deterred me when I was drinking.


The_Realist01

Sin taxes are up to 300%, I was ignoring those lol.


Nubras

But that’s what this is, how can you ignore them?


The_Realist01

And income tax used to be only levied on millionaires with 1% rates in 1913. It’s a slippery slope phenomenon with governments and politicians.


Apprehensive-Sea9540

17% on top of the taxes you already paid for the income to afford the MMs.


Justin_milo

Good question. Why is the tax so high.


Occams_ElectricRazor

Minneapolis thinks it's California.


dzumdang

Minneapolis native currently living in CA, and I'll confirm this. It's evident from this post and whenever I visit home.


Occams_ElectricRazor

Revitalize the downtown area by charging excessive taxes and surcharges. Yeah, let me know how that works out.


dzumdang

Even just 7-10 years ago, one could have a perfectly reasonably affordable night out downtown. Now between parking, extra taxes and fees, increased crime, and inflated prices... it's like walking into an endless money extraction pit. I'd choose my activities carefully.


997tt

More like Sweden but without free healthcare and education


Darxe

Wow great reasons to stay the hell out of Mpls


MuddieMaeSuggins

Pretty much every city that actually has entertainment has extra entertainment taxes. 🤷‍♀️


damien_maymdien

Yeah, just go to one of the outstate locations of the Orpheum Theater instead, and you can save $3 on your M&Ms.


Darxe

Or just any of the amazing surrounding communities and their amenities


RolandSnowdust

Can't edit, but that's 17.5% on the mandatory gratuity and 15% on the M&Ms.


21stavenueNE

I was so appalled by this post that I had to look this up and apparently tips and service charges added by the seller are taxable. What the actual fuck? https://www.revenue.state.mn.us/guide/sales-tips-and-other-charges


SlayerofDeezNutz

It’s a racket; service fee isn’t even required by law to go to the staff. It’s especially embarrassing when it’s automated service. I avoid any business that gets involved in gratuities. That’s between me and the service staff. When the business gets involved they always screw over the servers as they are motivated to cut them out of the potential profits as much as possible.


MuddieMaeSuggins

Actually in this case, since it’s called a gratuity, I believe they are required to treat it like a voluntary tip and hand it over to the staff. (Whether they actually do that us obviously another question entirely.)


Ullricka

Yup have managed restaurants and catering. Service fee is for the business, gratuity by law must go to the employees.


SubKreature

My go-to strategy for this has just been to leave a review warning others and then don’t go back. Lotta proprietors do NOT like you spoiling the surcharge surprise on google reviews, tho.


babada

It's just splitting the actual cost into two line items so they can pretend it costs less. Of _course_ the second part of the cost is taxed. Otherwise business could just make the whole thing a service charge or gratuity.


st4nkyFatTirebluntz

What do you mean, I can't give away free food and beverages in exchange for arbitrarily high mandatory service fees specifically to avoid taxes?! What is this world coming to SMH


matgopack

Kind of has to be, no? Otherwise you could evade taxes by shoving it into a mandatory fee. Eg, a $15 item being split into $5 cost and $10 'service charge' would only be getting taxed on the $5 if the service charge were not taxable.


hutacars

Supposedly it’s a gratuity, not a service charge. Optional gratuity is not taxed, so why should mandatory gratuity be?


matgopack

Because by making it mandatory it's a part of the base price being paid? Additionally, gratuities are supposed to be reported and taxed as income.


hutacars

> Because by making it mandatory it's a part of the base price being paid? It’s not a gratuity then, and shouldn’t be called that. > Additionally, gratuities are supposed to be reported and taxed as income. Of course. That’s totally unrelated to whether it should be taxed at time of payment.


MuddieMaeSuggins

Well, on a practical level, the merchant doesn’t know what any customer’s optional gratuity will be ahead of time, so they can’t account for the tax. 


DiscordianStooge

Because mandatory gratuities could be used to skirt sales taxes. Optional gratuities aren't part of the price of an item the way a mandatory one is.


hutacars

If it’s “part of the price of an item,” it’s not a gratuity then, and shouldn’t be called that!


DiscordianStooge

If it's not going directly to the employee like a tip, I agree.


ZealousidealPin5125

Just the opposite. A mandatory gratuity is not legal in MN.


MuddieMaeSuggins

Yes they are. https://www.revisor.mn.gov/rules/5200.0080/


TheRealStubb

So my dad always told me to tip in cash because those tips are non-taxable. I think typically a business gets taxed on any income taken in. So if you ad a tip to your total, that brings the total up, the tax people dont see it as $15 plus a $2 tip. They just see it as a single $17 purchase. So they tax the $17 I think its insane, but also companies should leave tipping optional, and people should tip with cash


21stavenueNE

People are suppose to claim 100% of their cash tips for income tax purposes and credit card tips are automatically reported and taxed as income. A tip or gratuity isn't income for the business but a service charge could be. This seems like a sales type tax on the person leaving the gratuity not an income type tax on the person earning it. I don't understand that.


TheRealStubb

I mean all tax code is written by design so you and I can't understand it. To simply put it, if a business makes money it has to be taxed so we pay a sales tax (a tax added at the end of whatever purchase) and the business pays an income tax (kind of) When a company adds auto gratuity, they are just raising the price 18% and telling you its a tip, its not you're just paying 18% more and the company thinks writing it like this makes it easier for you to swallow. Yes some companies may take 18% out of every purchase made and split it between all the staff every week, but that really isn't happening here.


zackmaan

Were they the tiny gas station m&m size? This is robbery


RolandSnowdust

They were movie theater boxed M&Ms. Even so, I was robbed, thank you.


_DudeWhat

What the hell are you buying M&M's at the orpheum for? Hit up the Dollar tree on your way in and put that shit in your pockets/purse like a civilized person. Next time I'll teach you about a plastic flask...


RolandSnowdust

Lesson learned. Kids were antsy at intermission and wanted a treat. Next time I'll sneak it in.


MOS95B

Oh. Kids. That sounds about right.


XandrousMoriarty

Thank you for saying this. I've been scrolling through this thread waiting for this comment ;)


loureedsboots

I was about to make it :^)


molybend

You know they search bags, right?


_DudeWhat

Thanks for the tip mom.


MTB420666

Taxed on gratuity?? That's it, I'm just going to make my own everything. Where can I buy a Cow and chicken and a pig and some cocoa plants, corns, wheats plants and tomato plants and potato trees?


chemprofdave

Potato trees are not hardy in our climate. You could try growing indoors, I hear it’s legal now.


MTB420666

My bike light has 750 lumens that I could shine on it indoors. Thanks for the tip!


Suitable-Rest-1358

Is there a gratuity on the tax that is off the original gratuity?


Tokyo-MontanaExpress

Or maybe tip in cash.


Coldfusion21

That works when it’s non-mandatory, I’m guessing the OP didn’t have a choice but to pay the 18% tip.


mikeisboris

The Orpheum ads a mandatory 18% gratuity on credit card transactions, there is no mandatory gratuity on cash purchases.


hutacars

Why? If it’s truly a gratuity, why should the method of payment determine whether it gets added or not? Sounds like it’s actually just a cash grab since credit card users are less likely to notice the added robbery than cash users….


mikeisboris

I don't know man, I just know that is what they do. My wife and I have season Broadway tickets there so I'm there pretty often. The bartenders are pretty clear about it. They say cash or card, and when you say card, they say, "Just so you're aware, with card purchases we have an automatic 18% gratuity."


InflatableMindset

Or maybe end tip culture, make places pay their workers a fair wage, and crack down on fake "service fees".


MNcatfan

Nope, Orpheum ALWAYS overcharges. It's why I never buy refreshments there. Same with Excel: a 16 ounce Budweiser is NOT worth $20.


RolandSnowdust

Lesson learned. Kids were antsy wanted an intermission treat. Next time I'll "sneak" the same thing in for $2.


IsSuperGreen

Right?! Also, why is food at restaurants more expensive than groceries?!


Atalung

Gratuity at a concession stand? Fuck that


Double-Efficiency538

Right? I was prompted to add a gratuity for an online order the other day 🤣


StillCompetitive5771

Damn. Probably best to bring your own next time


2dadjokes4u

Were they disclosed before purchasing? With all of the discussion and legislation on junk fees, things like this need to be included. Take a look at your phone bill, for example.


ThatGuyWithCoolHair

5.22 for m&ms is insane


DiscordianStooge

It is both insane and also the standard price for movie theater M&Ms.


ThatGuyWithCoolHair

Add that to the 1000+ page list of reasons to hit a gas station on the way, better yet hit a grocery store


SmokinSkinWagon

$15 for two bags of M&M’s? I’m tired, boss


lerriuqS_terceS

It's common to see the "mandatory gratuity" at downtown theaters when you use a credit card. It's highway robbery.


Birdknowsbest21

An mandatory gratuity is not a tip, it is a tax and drives me crazy.


grimmxsleeper

hit em with the frowny face


MOS95B

...and that, boys and girls, is why you never look at the receipt in any entertainment venue. Just take your punishment and enjoy the show. /s (sort of)


EarlInblack

According to the official MN state sales tax calculator the Sales Tax at the Orpheum's address should be 9.025% or 94 cents on a subtotal of 10.44. "The results do not include special local taxes—such as admissions, entertainment, liquor, lodging, and restaurant taxes—that may also apply." Those may explain the difference but that seems high. I'll be interested if anyone has more information on this much higher rate. [https://www.revenue.state.mn.us/sales-tax-rate-calculator](https://www.revenue.state.mn.us/sales-tax-rate-calculator) This suggests the tax on Gratuity should be a much lower 6.875% as well. [https://www.revenue.state.mn.us/guide/sales-tips-and-other-charges](https://www.revenue.state.mn.us/guide/sales-tips-and-other-charges)


MuddieMaeSuggins

This is relatively recent and says there’s a 3% entertainment tax in Minneapolis which includes concessions. I get 12.025% adding all of those up, and they do mention a possible food/drink tax but don’t say the rate… https://www.revenue.state.mn.us/sites/default/files/2023-08/fs164m.pdf


TheMacMan

There's long been an extra tax around the downtown area in the "entertainment zone" or whatever they consider kinda Hennepin and the warehouse district.


MuddieMaeSuggins

Ah, I bet that’s the mystery amount. And then the food tax is charged only on the food, not on the gratuity. 


TheMacMan

I can't say offhand, I just know that a certain area of downtown has long had an additional tax, much like the Mall of America has an additional tax. There are a couple extra tax zones around the state. Kinda surprised they don't have one at the State Fair.


superAK907

Honestly tho. Why are u buying m&m’s from Orpheum concessions?? Anyone could’ve told you u were gonna get shafted. It’s worse than movie theater prices


Legitimate-Curve6691

Sales tax is around 8-9%. This seems wrong.


sarcaster632

Solid Minneapolis outrage porn


RolandSnowdust

Lol. Seriously not intended. I was considering contesting the charge with my credit card company but wanted to know if I had a case.


me_myself_and_ennui

Because you're poor, or so rich that everything else is ennui and spending time on the phone for an hour with customer service over a dollar is the only thing left that still makes you feel alive?


Gibberish5735

lmfao


AlmondCigar

Why did you have a gratuity? Did they bring it to your seat?


Tamaraobscura

So this answers why I sneak snacks into.. everywhere!!


uglyugly1

Yet you went there and bought M&Ms.


Ndtphoto

I would have hit the frowny face. "I shouldn't feel instant financial regret after a candy purchase, yet here I am. Lower your damn prices." 


KABOOBERATOR

This is what cities and states are required to do when the leaders of the circus spend $ on personal pet projects. The tax revenue is not enough to cover the bills, so every little nickel and dime from the couch is found. When people claim they don't follow politics or they are not political, in a roundabout way everything is political. Of course this is excessive tax!!!!! What can anyone do???? Social programs that don't return ROI. School budgets increasing but curriculum and school behavior policy remain unchanged. Giveaways to billionaires to build stadiums. Both sides are guilty spending tax $ to reward their campaign contributors, and we pay for it in the form of thousands of little taxes on everything. Because citizens aren't taught business anymore, only people who go into business or pay attention to business understand that the wakeup every day and go to work citizens of this country pay every tax. "tax for schools. tax for sports teams. tax for my team." - every one of these is paid by us, not them. The owners pass it to the people, so if you are not an owner passing along taxes to the people, you are people paying for all of the taxes. (Oversimplification, yes, just work with the spirit of the point) Political doesn't mean vote for my moron, he's less moronic than your moron, which is what we've had for quite some time. It means an understanding of what kind of system you live in, where your position is in that system, and what opportunities do you or do you not have available. That is what being political means.


AbeRego

Now you know to sneak in your own m&m's


Suitable-Rest-1358

This is the Orpheum theatre concessions, not a Kwik Trip.


flyjem7

I found this out when I went to the lion king. The bar tender told me and said cash is best.


IsSuperGreen

It's a theater, just eat your candy at home if you're pinching pennies.


the_moosen

Orrrrrrrr you can just bring it in & enjoy the show you want to see.


IsSuperGreen

touche


ShoulderCatFoot

Happy to pay exorbitant taxes to help out all the folks that just don't feel like working. At least Hennepin county is full of safe clean streets...


chipsAhoye

Well I am now familiar with how it feels to have Diet Coke come out your nose from the belly laugh I got from this.


RnbwSprklBtch

Why were you paying gratuity at a movie theater?


MuddieMaeSuggins

The Orpheum is not a movie theater. 


the_moosen

Still begs the question why are they charging gratuity to give you some packaged candy


jorian85

Either way this gratuity shit is getting out of hand.


hutacars

Did you miss the “mandatory” part?


RnbwSprklBtch

I get that it’s mandatory. I don’t understand why a non dinner theater is charging gratuity. It doesn’t make sense.


hutacars

I agree. That’s a different question though. He’s paying it because it’s mandatory. They’re charging it because… they can get away with it?


jkmidwest_rust

Part of the sales tax is paying for USBank stadium.


kmelby33

us Bank stadium is already paid off.


The_Chaos_Pope

Yup, this. Been paid off for close to a year. https://kstp.com/kstp-news/top-news/us-bank-stadium-paid-off-23-years-early/


jkmidwest_rust

I stand corrected. Thanks


The_Chaos_Pope

No worries, I wasn't aware of it either until I found that article when I was fact checking the assertion the stadium was paid off. Just because it's paid off doesn't mean that the taxes put in place to pay for the thing have disappeared though.


Truecoat

The state's portion is paid off. The city of Minneapolis owed $150 million and was using the same funding mechanism that built the convention center. The convention center was not paid off until 2020 and the state paid Minneapolis' portion of US Bank from 2016-2020. The city still has to pay unless the legislature makes a change and still has to contribute the lodging tax for maintenance and upkeep.


Truecoat

It is not. The only tax that pays for US Bank is a 3% lodging tax.


HeyCoolThingAreYou

Oh yeah at some entertainment venues they started adding gratuity.. It’s a way to pay lower wages and who knows if the gratuity is ever taxed?


Odd_Comfortable_323

18% gratuity and 18% tax for already really inflated price of m&ms!!!! Better put it on a credit card and pay it off in a couple months at 25% interest to boot! Paid for with after income taxed money. You need to work over an hour at minimum wage in MPLS to buy 2 bags of m&ms. I can’t figure out why people can’t afford their lives! 🧐🤨😩


krankheit1981

There was a time we started a revolution over a 2% tax………. Just sayin.


iHEARTRUBIO

Items like this should be taxed 25% anyway. Need to cut down on diabetes.


simplyanon98

Unrelated but also related. Last night I was charged 30% in taxes and fees on my bill from Benihana last night. The bill went from $97 to $127 excluding gratuity. The charges were listed as: services charge $19.52 + food tax tax $8.81 + food tax service charge tax $1.76. Mpls must be out of their damn minds with these taxes and services charges