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Mark Taylor
Mark Taylor, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1294
Experience:  Certified Public Accountant
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I am a first time bar owner inside a hotel, Assistant:

Customer Question

I am a first time bar owner inside a hotel,
Assistant: Thanks. Can you give me any more details about your issue?
Customer: the agreement is the hotel gets 42% of the business every month does the hotel pay for 42% of the taxes ?
Submitted: 14 days ago.
Category: Tax
Expert:  Mark Taylor replied 14 days ago.

Hi, my name is Mark. I will be happy to help you with your questions. Please give me a moment to prepare your response.

Expert:  Mark Taylor replied 14 days ago.

The 42% that goes to the hotel would be an expense for your business. This would be similar to paying any other vendor.

Customer: replied 14 days ago.
even the alcohol taxes?
Expert:  Mark Taylor replied 14 days ago.

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?

Expert:  Mark Taylor replied 14 days ago.

Based on your description is sounds like the hotel will receive 42% of your sales.

Customer: replied 14 days ago.
Expert:  Mark Taylor replied 14 days ago.

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).

Customer: replied 14 days ago.
right, so what do I do? they also added them self on my LLC
Expert:  Mark Taylor replied 14 days ago.

Do they own 42% of the LLC?

Customer: replied 14 days ago.
no
Expert:  Mark Taylor replied 14 days ago.

What do you mean that they were added to the LLC? Are you paying rent in addition to the 42%?

Customer: replied 14 days ago.
I notice that their name was on my LLC
no on the 42%
Customer: replied 14 days ago.
according to the LLC he placed him self as a manager
Expert:  Mark Taylor replied 14 days ago.

Does he have any ownership percentage? Share in any of the profits or losses? Have a capital stake in the business?

Customer: replied 14 days ago.
1, not sure.2,no 3,not sure
Expert:  Mark Taylor replied 14 days ago.

So it is not a large percentage. Do you also have to pay rent?

Customer: replied 14 days ago.
42% every month
Expert:  Mark Taylor replied 14 days ago.

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?

Customer: replied 14 days ago.
cable, bands every weekend,
Expert:  Mark Taylor replied 14 days ago.

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%.

Customer: replied 14 days ago.
ill be back
Expert:  Mark Taylor replied 14 days ago.

Ok sounds good.

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