Why Club Charles doesn't round up
After 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)
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 "
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?
Posted by: broken clock | March 24, 2009 9:49 AM
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!?
Posted by: IHBF | March 24, 2009 9:54 AM
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.
Posted by: PCB Rob | March 24, 2009 10:47 AM
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 ($13.40)and then added 6% at the end of the day, you would pay .80 cents in sales tax to the state. By collecting on each transaction, the state gets a dollar.
So - it can be done, it just takes a little extra work on the part of the bar owner or operator to program into the POS system.
Posted by: Barfan | March 24, 2009 12:14 PM
Barfan, so you mean that bar owners don't do this because they are lazy!!!!!!
Fancy that.
Posted by: hmmmm | March 24, 2009 12:31 PM
Barfan, I'm interested...Where can one purchase this Piece of Sh$# system?
Posted by: Trouble | March 24, 2009 4:05 PM
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.
Posted by: Patapsco Jones | March 25, 2009 12:29 AM
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.
Posted by: Dick Martin | July 29, 2009 5:09 PM