Have a Tax Question? Ask a Tax Expert
Hi, my name is Mark. I will be happy to help you with your questions. Please give me a moment to prepare your response.
The 42% that goes to the hotel would be an expense for your business. This would be similar to paying any other vendor.
How is the alcohol tax treated. Do you pay a surcharge when you purchase the alcohol? Does the customer pay another tax when the drinks are purchased?
Based on your description is sounds like the hotel will receive 42% of your sales.
The hotel should only receive 42% of the sales. They should not receive 42% of the sales tax or alcohol taxes that are collected. I am sure that you are very aware of this but you would need to factor this cost into your pricing choices. If you 100% percent markup you would barely breakeven (you would never be able to cover your additional overhead).
Do they own 42% of the LLC?
What do you mean that they were added to the LLC? Are you paying rent in addition to the 42%?
Does he have any ownership percentage? Share in any of the profits or losses? Have a capital stake in the business?
So it is not a large percentage. Do you also have to pay rent?
So the 42% is the only amount that you pay to the hotel. Do you have any other overhead costs like utilities, cable or satellite?
You are going to want to at least triple your costs. If you triple your cost your profit margin after the 42% to the hotel is just under 25%.
Ok sounds good.