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March 24, 2009

Why Club Charles doesn't round up

club charlesAfter I posted a link to my piece about too much change at Club Charles (1724 N. Charles St.), Dick Martin e-mailed me with a really interesting back story.

The business at that location has been in Martin's family since the 1950s, he wrote.

Here is why Club Charles doesn't have even drink prices, according to Martin:

It was approx 1980, when the Club Charles was still the Wigwam, we tried to streamline operations behind the bar and rounded off the prices on everything so it was all even dollar or buck-and-a-half amounts, tax included ...

But the Department of Revenue for the State of Maryland did not like that one little bit, no sirree ...

There was something in the tax code prohibiting "tax included" prices.

Now you're going to tell me about all the other bars that do it, but I already know about all the other bars that do it. I also know that lawyers and accountants from our side went down to the Department of Revenue and pleaded and pleaded, but all we ended up with was a 5% tax bill plus penalties on all sales that year that had been rung up "tax included."

Why aren't all the other bars forced to split their prices? Why hasn't anyone complained to the authorities about them? Why was the Wigwam singled out for enforcement?

Ah, the mysteries of life in Baltimore. No answers, only confusion.

(Sun photo by Elizabeth Malby)


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Posted by Sam Sessa at 9:17 AM | | Comments (8)
Categories: Bars & Clubs
        

Comments

Maybe that was back in 1980, but I know plenty of bars that have dollar or 2 dollar specials. How do they get away with that?

Doesn't seem too hard to me - no need to round anywhere... $2.83 + 6% tax = $3 even. What's so hard about setting your prices so that when tax is added they turn out even!?

Doesn't seem too hard to me - no need to round anywhere... $2.83 + 6% tax = $3 even. What's so hard about setting your prices so that when tax is added they turn out even!?

Most places do charge that way in Baltimore. I believe the tax has to be charged (and shown) separately on their receipts to prove it was collected as tax.

They do it that way down here too.

Here is the answer to your question:

You can set your POS system to a particular price that, with tax included, equals an even dollar amount or is rounded to whatever you want so long as the tax matches the state tax chart which is
here.

What you cannot do is ring everything up at a flat dollar amount, and then add 6% at the end of the day to send the state for your taxes. The reason is - when not done on each transaction, it shorts the state. Look at the attached chart and take a $ .67 sale for example. If you rang up 20 of these without tax ($13.40)and then added 6% at the end of the day, you would pay .80 cents in sales tax to the state. By collecting on each transaction, the state gets a dollar.

So - it can be done, it just takes a little extra work on the part of the bar owner or operator to program into the POS system.

Barfan, so you mean that bar owners don't do this because they are lazy!!!!!!

Fancy that.

Barfan, I'm interested...Where can one purchase this Piece of Sh$# system?

This is one of the silliest things I've read in a long, long time. Believe me, the Department of Revenue could care less whether you round up or not. What they care about is whether you pay your taxes. So don't blame it on the State of Maryland, bud. Blame it on laziness. Blame it on your accountant. Blame it on the Al-Al-A-A-A-Al-co-hol.

Ah, I see where the misunderstanding takes place.
You must not have been to the Club Charles.
There is no POS system in this bar. It's an old (very old) NEC tombstone cash register (hand crank included for power outages) and there's not even a "Tax" button on the keypad. Because of this, the only records, the Z-tape, shows the amount of the sale, no tax split. So the fix FROM THE DEPT OF REVENUE, was to tax based on the sale amount (if tax was included, it wasn't split automatically). They did this retroactively for a full year so there was a penalty for tax included sales because available records did not show where the tax was. The penalty was imposed by the Dept of Revenue so I'm guessing they did care. Replacing the old tombstone cash register with a fancy new computing POS would detract from the ambience so it's not going to happen. Consider yourself lucky that they even accept credit cards.

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About Erik Maza
Erik Maza is a features reporter at the Baltimore Sun. He writes for several sections of the Sun paper and contributes weekly columns on music and nightlife. He also writes and edits the Midnight Sun blog. He often covers entertainment, business, and the business of entertainment. Occasionally, he writes about Four Loko, The Block, the liquor board, and those who practice "simulated sex with a potted palm tree." Before The Sun, he was a reporter at the Miami New Times. He's also written for Miami magazine, the Orlando Sentinel, the Sarasota Herald Tribune and the Gainesville Sun. Got tips? Gripes? Pitches? He's reachable at erik.maza@baltsun.com. Click here to keep up with the dumb music he's listening to.

Midnight Sun covers Baltimore music, live entertainment, and nightlife news. On the blog, you'll find, among other things, concert announcements, breaking news, bars closings and openings, up-to-date coverage of crime in nightlife, new music, round-the-clock coverage of Virgin Mobile FreeFest, handy guides on bars staying open past 2 a.m. on New Year's Eve and those that carry Natty Boh on draft. Recurring features include seven-day nightlife guides, Concert News, guest reviews of bars and concerts, Wednesday Corkboard, and photo galleries, as well as reader-submitted photos. Thanks for reading.
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