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Aren't home bakers supposed to charge tax? - Page 3

post #31 of 43
9/14/10 at 9:25am
State of Texas no baked goods are taxed except individual servings. Whole cakes, breads, items sold in groups (ie: cookies or cupcakes) are not taxed. An individual cupcake or cookie is taxed. But I have gone into other establishments that haven't taxed on individual items before and some have.
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post #32 of 43
9/14/10 at 12:11pm
Quote:
Originally Posted by cakesdivine

State of Texas no baked goods are taxed except individual servings. Whole cakes, breads, items sold in groups (ie: cookies or cupcakes) are not taxed. An individual cupcake or cookie is taxed. But I have gone into other establishments that haven't taxed on individual items before and some have.



What the heck was the logic behind that decision? What if you bought all twelve pieces of a cake so that if you put them together they'd make one cake, would they tax you on each individual piece or not, since they all form one cake? I'd be the wisea$$ who'd ask the cashier that just to see them get all confused!
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post #33 of 43
9/14/10 at 12:28pm
All the registers are already UPC ready so if someone came and purchased a pre packaged slice which is coded as taxable, then yes they would be taxed on each individual slice they purchased. It is because of the additional processing (cutting and separate packaging of each item) The same reason all food that is purchased in restaurants are taxed. Whole baked goods don't get taxed.

Besides we all know that law makers make things as difficult, confusing, and nonscensical as possible icon_smile.gif
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post #34 of 43
9/14/10 at 12:28pm
Quote:
Originally Posted by costumeczar

Quote:
Originally Posted by cakesdivine

State of Texas no baked goods are taxed except individual servings. Whole cakes, breads, items sold in groups (ie: cookies or cupcakes) are not taxed. An individual cupcake or cookie is taxed. But I have gone into other establishments that haven't taxed on individual items before and some have.



What the heck was the logic behind that decision? What if you bought all twelve pieces of a cake so that if you put them together they'd make one cake, would they tax you on each individual piece or not, since they all form one cake? I'd be the wisea$$ who'd ask the cashier that just to see them get all confused!


The actual wording of the TX code is:

Heated and unheated bakery items are exempt (from sales tax) regardless of size or quantity unless sold with plates or other eating utensils provided by the seller.

http://info.sos.state.tx.us/pls/pub/readtac$ext.TacPage?sl=R&app=9&p_dir=&p_rloc=&p_tloc=&p_ploc=&pg=1&p_tac=&ti=34&pt=1&ch=3&rl=293

This is basically another way of separating dine-in food (usually taxed) from take-out food (usually not).
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post #35 of 43
9/14/10 at 1:54pm
I live in NC and just charge the 2% never had a problem. I also have it on my website that all cakes are subject to the sales tax.
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post #36 of 43
9/15/10 at 7:46am
Quote:
Originally Posted by costumeczar

Quote:
Originally Posted by cakesdivine

State of Texas no baked goods are taxed except individual servings. Whole cakes, breads, items sold in groups (ie: cookies or cupcakes) are not taxed. An individual cupcake or cookie is taxed. But I have gone into other establishments that haven't taxed on individual items before and some have.



What the heck was the logic behind that decision? What if you bought all twelve pieces of a cake so that if you put them together they'd make one cake, would they tax you on each individual piece or not, since they all form one cake? I'd be the wisea$$ who'd ask the cashier that just to see them get all confused!



Oh yeah, that same stupid logic is here in NY too. Recently it made the news because there is some little known law on the books since 1964 that said if something is sliced, it is taxed. Which meant all the bagel places in town were supposed to tax for sliced bagels. How did they find out? The tax dept sent them a bill for 3 years worth of back taxes. It seems they hadn't enforced it for years, but now that the state needs money they are looking for any little loophole they can find to fill the gap, even sc***ing the small business person. It makes me wonder if they did the same to all those bakeries that sell cake by slice......
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post #37 of 43
9/16/10 at 7:32am
I don't charge tax in Ohio either, because the food is not consumed on my premises.
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post #38 of 43
9/16/10 at 6:23pm
In North Carolina, cake should be taxed as prepared food ( 6.75% - 8.0% depending on county). If you are charging food tax and get audited, you will be liable for all of the difference plus penalties and interest.

From an article in Modern Baking ( the trade journal of the RBA)

Prepared food is a now a legal term for states to tax more, said Jerry Ray, owner, Mickey's Pastry Shop, Goldsboro, N.C. By the prepared food definition, the ingredients in a bakery product are alone considered food. However, flour, sugar and yeast can't stand alone as a food. These items cannot be eaten or ingested for taste or nutritional value. Nobody buys and consumes the ingredients I use, Ray added.

Do what you want, but one bakery in Cary racked up $150,000 in back taxes, penalties and interest.
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post #39 of 43
9/16/10 at 8:18pm
When I called the tax department and asked if I was supposed to be charging sales tax on delivery fees, they said "You can if you want to." What the heck? So you bet I do, because with that kind of an answer, if I didn't and got audited they'd say that I was supposed to be collecting it. Better safe than fined back taxes!
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post #40 of 43
11/1/12 at 3:50pm

I am also in Raleigh NC.  artisanal bakers must charge 2%, providing you don't provide utensils (incl napkins), accompanying beverages, or a place to eat (otherwise, bakers must charge the typical 4.75% on prepared foods)...But can we get tax exemptions on things we buy that would normally be taked (like say chocolate chips, or PB)?

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post #41 of 43
11/1/12 at 4:32pm
Quote:
Originally Posted by CakesNC View Post

I am also in Raleigh NC.  artisanal bakers must charge 2%, providing you don't provide utensils (incl napkins), accompanying beverages, or a place to eat (otherwise, bakers must charge the typical 4.75% on prepared foods)...But can we get tax exemptions on things we buy that would normally be taked (like say chocolate chips, or PB)?

4.75%????? Holy cow! I'm going to NC. It's +/-8.25% in Texas.

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post #42 of 43
11/1/12 at 5:56pm
4.75% is the base state rate for NC, once you take into account county sales taxes the rate is 6.75-7%.

http://www.dornc.com/taxes/sales/salesrates_4-12.html
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post #43 of 43
11/1/12 at 9:30pm

Feeling very lucky right now to be living in Anchorage, Alaska where there is no city or state sales taxes at all!  (sorry, just had to gloat for a moment :) )

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