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Cottage Law Vs Home Processor Exemption

post #1 of 29
Thread Starter 
Can someone help shed some light?

Does NY State have a Cottage Food Law? Or do we only have the Home Processor Exemption? Are they one in the same, or are they totally different entities?


Secondary, who do we contact to start pushing for support of a Cottage Food Law in New York state? Where do we begin? How do we lobby for this?
The King of Pops
TC Pops, A Division of Teddy Cakes, LLC

http://tcpops.com
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The King of Pops
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http://tcpops.com
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post #2 of 29
As soon as I saw the title of your post, I KNEW you were in NY. I feel your pain!

It's confusing, without question. My understanding is that the Home Processor Exemption (State Dept. Of Ag) IS the NY version of a cottage law, which only applies if the local Health Department doesn't have specific requirements that override it. That's just how my overloaded little brain pieced it together - I could be completely wrong.

I personally think it's ridiculous to have such inconsistencies within one state. Sales tax is a good example, too. Is there any other state out there that has different sales tax from county to county, and even city to city?

I wish I had an answer, and I would love to see it changed. But it seems to me (and I'm just guessing) that since even sales tax is all over the place, there must be some provision in NY law that allows that sort of thing across the board. So fixing the Home Processor mess might open a whole new can of worms that extends into sales tax and goodness knows what else. Changing something that far-reaching would probably take some serious muscle. And truth be told, I think we poor saps trying to start baking businesses are low on the totem pole compared to all the municipalities who would have kittens if NY said, "No, you can't charge whatever you want for sales tax anymore."

But hey, ya never know... Maybe it IS completely separate and easily enough changed.

Gosh darn it. Now I'm getting all riled up, thinking about calling my state congressman... icon_lol.gif
Sherri

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Sherri

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post #3 of 29
OMG - let me tell you about differences from city to city and county to county. I live in a county in IL that has twin cities, well actually it is now three all "hooked on" to each other and has several other small towns and villages, three of which are near 10,000. The sales tax in each one is different. The state has its base rate, each city has levied their own various rates and the County has also levied certain rates for whatever various referendums have passed. It is difficult to keep track. And then of course we have two health districts, aside from the state department. We have the city health district and the County public health district. You are not alone. icon_biggrin.gif
Ranae
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Ranae
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post #4 of 29
Alabama has different tax rates per county and inside city limits and charges tax on groceries...Mobile Alabama's tax is 9.5% and now makes business owners within the city limits charge tax on items shipped out of state. thumbsdown.gif
post #5 of 29
Quote:
Originally Posted by ranae5463

OMG - let me tell you about differences from city to city and county to county. I live in a county in IL that has twin cities, well actually it is now three all "hooked on" to each other and has several other small towns and villages, three of which are near 10,000. The sales tax in each one is different. The state has its base rate, each city has levied their own various rates and the County has also levied certain rates for whatever various referendums have passed. It is difficult to keep track. And then of course we have two health districts, aside from the state department. We have the city health district and the County public health district. You are not alone. icon_biggrin.gif



Yikes! LOL so NY isn't the only screwed-up state! Another weird thing about sales tax in NY is that if your NY business sells & ships something to someone in a different part of NY, you have to charge them the sales tax that applies to THEIR area. Very fun. There are only like, oh, I dunno, ten MILLION different rates out there... icon_rolleyes.gif

But hey, didn't I just read somewhere that IL just passed a cottage foods law, or were close? If so, that gives me hope!

(Inching towards the phone to call my state congressman...)
Sherri

Any excuse to make a cake!
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Sherri

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post #6 of 29
Quote:
Originally Posted by SugarFiend

Yikes! LOL so NY isn't the only screwed-up state! Another weird thing about sales tax in NY is that if your NY business sells & ships something to someone in a different part of NY, you have to charge them the sales tax that applies to THEIR area. Very fun. There are only like, oh, I dunno, ten MILLION different rates out there... icon_rolleyes.gif


That's pretty much the norm for most states. Most states have a state sales tax which is used to pay for statewide services, and counties and cities often tack on their own sales tax to pay for services at the county or city level. The tax rate will be different from county to county (and city to city) depending on how many services in that county/city rely on sales tax funding.

Any halfway decent POS system will be able to automatically determine the correct sales tax rate based on the customer's delivery address, as there are services that provide this information for download on a regular basis. Of course that's probably overkill for a custom cake shop that might only serve a few counties.
post #7 of 29
Quote:
Originally Posted by KuyaRomeo

Can someone help shed some light?

Does NY State have a Cottage Food Law? Or do we only have the Home Processor Exemption? Are they one in the same, or are they totally different entities?


Secondary, who do we contact to start pushing for support of a Cottage Food Law in New York state? Where do we begin? How do we lobby for this?



New York has had a cottage law since the late 1970's, which is called the Home Processor Exemption. It's not easy to navigate all the rules but it is a great law that has no permit fee. And it allows us to bake at home which means very little overhead.

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post #8 of 29
I'd definitely be interested in getting clarification from anyone (health department or agriculture) and attack this with a group if anyone is interested, I'm in suffolk county.

any takers?
post #9 of 29
When we had the agricultural guy up, he only knew what he was responsible for. We asked what we had to do to be able to use the fruits & veggies that we grew and he didn't know. He could only tell us we couldn't until we talked to another guy, but wasn't sure who that was. Good luck on any clarity. I would be interested also. I am in upstate NY.
post #10 of 29
Greetings Atomikjen and kelcyrenee,

The NY Dept of Ag & Mkt rules are not always easy to understand, and some of the rules (such as "no internet presence") make no sense. I'm on the board of the NY Small Scale Food Processors Assoc (SSFPA) and we have talked about advocacy issues. We need help and a strong voice. If you're interested, please email me (kelcyrenee, I need your location/city) and I will send info for your regional contact.

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post #11 of 29
Quote:
Originally Posted by MimiFix

Greetings Atomikjen and kelcyrenee,

The NY Dept of Ag & Mkt rules are not always easy to understand, and some of the rules (such as "no internet presence") make no sense. I'm on the board of the NY Small Scale Food Processors Assoc (SSFPA) and we have talked about advocacy issues. We need help and a strong voice. If you're interested, please email me (kelcyrenee, I need your location/city) and I will send info for your regional contact.



strength in numbers!!! I'll see if we have others in my area interested. =D

let me know what can be done. I'd definitely love to get something going.

LOL, obviously. icon_wink.gif
post #12 of 29
Thread Starter 
Ok I have some news . . .

I have talked to the AG, and Health Department.

1) Food processor law is like a food cottage law, except we can not sell to customers directly. We can only sell at farm market or wholesale (to restaurant, hotel, catering business . . etc). But we can not take special orders (like birthday cakes), as this would make us a retail bakery.

So . . next . .

I emailed my senator (Breslin) and mailed him a letter asking what it would take for NY to consider a specific cottage law where we can sell to customers on a very small scale, like some other states.

If you wish to contact your senator (in NY) and request the same . . and I suggest you do so that we can overcome this obstacle . . . Here are some of the points I made:

1. Several other states have food cottage laws allowing in home bakeries to sell directly to customers on a small scale. (under $15,000 gross annual profit)

2. By selling wholesale, our products already end up in the hands of consumers, so it just makes sense that we should be allowed to make to order without storing goods.

3. Many bakers are already doing this 'under the table', and by bringing it 'above the table' NYS can help regulate food and safety issues.

4. By bringing it 'above the table' NYS can begin to collect sales tax from these under the table bake shops.

5. It is helping the community grow, as we use local products from local farms and markets.

6. It gives small businesses a chance to grow in small affordable steps.

7. It just makes sense. We aare 99% there . . .

8. WE VOTE


You can email your NYS Senator here

http://www.nysenate.gov/senators

However, I suggest both email and postal letter.

Let's get this going . . The small business needs a chance here in NY
The King of Pops
TC Pops, A Division of Teddy Cakes, LLC

http://tcpops.com
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The King of Pops
TC Pops, A Division of Teddy Cakes, LLC

http://tcpops.com
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post #13 of 29
Kuya-you are awesome!

thank you for the additional information. I'm going to add it to my overflowing folder of research and rally my friends in the baking community to write to their senators too. It would be great to get this going even before the holidays. (wishful thinking)

Thank you!
post #14 of 29
Thread Starter 
I hope we can all (In NY) come together and contact our legislature, assemblymen and senators . . . keep emailing them and writing them . . . keep it up until they do it.

Again, it just makes sense!! We are almost there, just one more step:

NOTE:

Here also is a link to contact your NYS Assemblyman:

http://assembly.state.ny.us/mem/?sh=search


Here is a copy/draft of the letter I mailed my senator and assemblyman. I will keep sending letters, and emails to them, lobbyists and anyone I can, until we get this done:


I am contacting you in regards to requesting an amendment to the 'Home Food Processing Exemption'.

Currently this exemption allows an approved, inspected, home bakery to bake non perishable, limited products (such as cookies, cakes, closed pies, etc) and sell them (only) to wholesale, such as restaurants, catering companies, etc OR to sell at farm market venues.

This law does not allow the home baker to sell these same non perishable products directly to a consumer. This prevents many of us from making a birthday cake or wedding cake directly for a client. To do so, would force us to have a commercial kitchen, even if we only make one cake per month.

Why NY Should amend the Home Food Processor Exemption, to allow sale directly to consumer:

1. 13 other states already allow this, under a "Food Cottage Law". Allowing home bakeries with non commercial kitchens to sell limited products on a small scale directly to consumers (example: under $15,000 gross)

2. The home food processor exemption, already in place in NY already allows us to sell to wholesale, resellers which places our baked goods in the hands of consumers. It just makes sense that we should be allowed to make a simple birthday cake directly for a consumer. In both scenarios our cakes end up with the consumer.

3. Already, many home bakers are already selling to consumers directly, 'under the table' with no regulation and paying no sales tax. Bringing this 'above the table' allows for regulation and sales tax collection to NYS.

4. This will help the local economy as home bakers buy ingredients from local farms and local businesses. As home bakers grow into small retail bakeries, they have potential to create jobs and support their communities.

5. It will help make NYS more 'small business friendly'. Starting a small business is very complicated, risky and expensive. Allowing a home business to take small steps and grow into a larger business, is less risky for the business owner, the community and the state. Often small bakeries are forced to invest in full retail outlets and commercial kitchens, getting in way over their financial abilities. The financial failure can be felt throughout the community and the state.

6. It just makes sense. The NYS home processor exemption provides requirements for inspection, health and safety, and regulation. One extra step will allow NY to modernize and join the other states, in allowing us to sell limited products on a small scale directly to consumers.

7. Health risks do not increase by allowing us to sell limited products directly to consumers. In fact, we often make to deliver . . .meaning that our products are picked up or delivered immediately, and not stored. Making it even safer for consumers, then selling first to a wholesaler or retailer.

8. Either way, or products are consumed by customers. Whether we sell to wholesale first, or direct. Therefore selling direct is no less safe.

9. Lastly . . We (small bakers, families, extended families, friends) ALL VOTE.

Please consider this proposal to amend the existing Home Food Processing Exemption, to allow these same limited, non perishable goods directly to consumers.

Many of us are simply trying to do the right thing. We love baking and making a few birthday or wedding cakes for family and friends. Allow us to do this above the table.

Thank you

Baker, Taxpayer, Voter
The King of Pops
TC Pops, A Division of Teddy Cakes, LLC

http://tcpops.com
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The King of Pops
TC Pops, A Division of Teddy Cakes, LLC

http://tcpops.com
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post #15 of 29
Regarding sales tax, I believe most cottage food sales (i.e. cakes that are not consumed on-premises) are exempt from NY sales tax anyway, so there would be no change there.

Legalizing direct cottage food sales would increase state income tax revenue though, and you might also suggest that the cottage food license come with a small annual fee relative to total income in order to defray the cost of implementing the law.
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