How are Camp Margaritaville's owners liable for federal income taxes?
Camp_Margaritaville Franchise · 2025 FDDAnswer from 2025 FDD Document
Customer shall be responsible for and shall reimburse and indemnify Margaritaville for all sales, use, value added, goods and services and other similar taxes (including, without limitation, penalties, interest, additions to tax and similar amounts), whether federal, state, local, foreign or otherwise, which are related to the Services, other than taxes imposed on the net income of Margaritaville (collectively, "Taxes"). Customer shall: (i) ensure that the Platform is configured to collect the applicable sales taxes at all times; (ii) communicate the amount of the Taxes to Margaritaville (for which Margaritaville will reimburse Customer); and (iii) remit the Taxes to the applicable governmental authorities. All payments due to Margaritaville under these Terms of Use shall be made free and clear of any Taxes. If Customer is required by law to make any deduction or withholding of Taxes from any payment due to Margaritaville under these Terms of Use, Customer shall (i) timely and properly prepare and submit any necessary filings and remit such Taxes to the appropriate taxing authority, and (ii) provide Margaritaville with governmental receipts evidencing Customer's withholding and payment to the appropriate tax authorities in a timely manner.
Source: Item 23 — RECEIPTS (FDD pages 72–406)
What This Means (2025 FDD)
Based on the 2025 Camp Margaritaville FDD, the customer, not Camp Margaritaville, is responsible for all sales, use, value added, goods and services and other similar taxes, whether federal, state, local, foreign or otherwise, which are related to the services, other than taxes imposed on the net income of Margaritaville.
The customer must ensure that the platform is configured to collect the applicable sales taxes at all times and communicate the amount of taxes to Margaritaville, for which Margaritaville will reimburse the customer. The customer is then responsible for remitting the taxes to the applicable governmental authorities.
If the customer is required by law to make any deduction or withholding of taxes from any payment due to Margaritaville, the customer must prepare and submit any necessary filings, remit such taxes to the appropriate taxing authority, and provide Margaritaville with governmental receipts evidencing the customer's withholding and payment to the appropriate tax authorities in a timely manner. This section outlines the tax responsibilities of the customer, ensuring Camp Margaritaville is not liable for these taxes related to the services provided.