Overview: Taxes and tax groups

The content of this page is specific to the Delphi product type only. If you are using the Delphi Core product type and want to learn more about the Delphi product type, contact your sales representative.

The information in this topic applies to the tax function with version R20 and lower. To learn about the enhanced taxes feature available with version R21 and higher, refer to Overview: Enhanced taxes.

Correct taxes are important for banquet check calculations. Administrators need to ensure that the property's taxes for menus and items, function room rental, other income, and guestrooms comply with state and local laws.

A tax group is a collection of taxes that are managed together from one central location.

For example, most of the events at your property are subject to a state sales tax of 4.0% and a local sales tax of 4.5%. Rather than manually applying those taxes to each menu and item at your property, you can create a Standard Tax Group. Then, add the taxes to the group, and assign that tax group as the default for your property. When a user creates a new event, the Standard Tax Group defaults on to the event and the appropriate taxes are automatically calculated when the banquet check is merged.

If the property's default tax group is not applicable to a certain event, the user can select a different tax group for this event only. For example, you might also have a Tax Exempt Group that is used for non-profit organizations, where only one or no tax is charged.

The advantages of Tax Groups

• Updates can be made from one central location. When changes are made to an individual tax, the tax group is automatically updated. The new tax information is used to generate the booking check or banquet check charges. Because tax groups apply at the booking event level, you do not need to manually update the individual menus and items.
• Taxes align with revenue classifications. You can have some taxes in a tax group that apply only to certain types of revenue. When you add a tax to a tax group, you associate the tax with one or more revenue classifications. Since menus and items are also associated with revenue classifications, the tax that applies is controlled by the matching revenue classifications. For example, if you have an audio visual tax of 5.0%, only items with a revenue classification of Audio Visual are subject to that 5.0% tax.
• Guestroom taxes automatically apply. You can create a guestroom tax and add it to your property's tax groups. The tax automatically applies to all guestrooms blocks and displays on the booking check.
• Taxes accommodate multiple tax rates and effective dates. Each tax you define can have a schedule of tax rates. For example, your local sales tax might be 4.5% this year but is projected to go up to 4.7% next year. When you add the local sales tax, you can define both rates and indicate which date range each applies to. For each booking event where the local sales tax is assigned, the correct rate is applied based on the event's date. You do not need to manually update each menu and item every time a tax rate changes.
• Gratuity and administrative charges are automatically taxed. The taxes in a tax group can apply to the base price of a menu or item, the gratuity, and the administrative charge. The tax that applies is controlled by the matching revenue classification. For example, your breakfast is 12.95 per person and subject to an 18.0% gratuity charge, based on the Food revenue classification. Your 4.0% local sales tax applies to the base price of a Food menu and its gratuity. When that menu is added to a booking event, the 12.95 base price and the 2.33 gratuity are automatically taxed at the 4.0% rate.

• If a menu has items from multiple revenue classifications, its revenue breakdown indicates which amount of the total menu price needs to go to each revenue classification. For example, your full-service menu is 95.00 per person. The menu includes all food, beverage, and audio visual and is allocated as follows: 55 to Food, 30 to Beverage, and 10 to Audio Visual. This menu is associated with three different revenue classifications, each of which might be taxed differently.

Additional requirements

To use tax groups, you need to do the following:

1. Add any additional revenue classifications.
2. Enter the default gratuity and administrative charge for every revenue classification.
3. Create each of the property's individual taxes.
4. Create the tax groups.
5. Add the appropriate taxes to each tax group.
6. Associate revenue classifications with each tax in the tax group.
7. Assign a default tax group to the property.