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Legal CFL baker question

post #1 of 14
Thread Starter 
Our state has just passed the CFL. Does the state you operate in require you to collect and pay sales tax on everything you sell? When responding would you tell me what state you are from?
Cakes are my canvas and icing is my medium.
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Cakes are my canvas and icing is my medium.
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post #2 of 14
In Texas, bakery items sold without utensils are not subject to sales tax. Your state controller would have the information on whether or not you need to collect sales tax.
post #3 of 14
Washington state is the same - no utensils no tax!
post #4 of 14
Tax is a tricky question - you need to contact your state, city and county direct and do your own homework on it.

And believe me, in some areas of the country it is homework.

On CC every poster will give you a different answer in the efforts of being helpful, but if you make a mistake and the government (local, state feds) come after you, the "I learned it on Cake Central" excuse won't save you!

Good luck!
post #5 of 14
Thread Starter 
Quote:
Originally Posted by FromScratchSF

Tax is a tricky question - you need to contact your state, city and county direct and do your own homework on it.

And believe me, in some areas of the country it is homework.

On CC every poster will give you a different answer in the efforts of being helpful, but if you make a mistake and the government (local, state feds) come after you, the "I learned it on Cake Central" excuse won't save you!

Good luck!



Thanks, I really appreciate your concern and I am aware how everyone's opinion could be different from the answer I need. I was just trying to poll to get a general idea because we are still a work in progress. Our bill was literally signed by the Governor this past week.
Cakes are my canvas and icing is my medium.
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Cakes are my canvas and icing is my medium.
Reply
post #6 of 14
From the SC CFL facebook page, Sheryl Langley Brousseau says:

Quote:
Quote:

I have an answer from the Dept. of Revenue in regards to licensing our home bakeries. Here is what Kara Hartley sent:

"My supervisor sent it to some other employees here at department of revenue. They reviewed the bill and came to the conclusion that you would need to have a retail license and remit sales tax. If you are going to be a sole owner, not an LLC or corporation, then yes you would file as sole proprietor. "
Kara Hartley
South Carolina Department of Revenue
Registration
Office (803)-896-1350
Fax (803)-896-1843

My recommendation is to hold off opening your business until the law is official, you have been approved for the exemption from inspection by the Dept. of Agriculture (we should find out more about that soon...I don't know if they are ready for us yet), and you are ready to start making sales. Go here to apply for your license www.scbos.sc.gov. The fee is $50. Afterwards, you will be required to file sales tax forms every month even if you sell nothing and this can easily be done online. Sales tax is 6% in SC, but many counties add additional local option taxes. Businesses must also register for Business Personal Property Tax. You must register for the first by filing a paper form. Business Personal Property is furniture, fixtures and equipment owned by the business. The business is required to file an annual report PT-100 with the Department of Revenue.



https://www.facebook.com/SCCottageFoodLaw

FYI, California only requires the collection of sales tax for food if there is a seating area and the food will be consumed on premises. CA does not yet have a CFL, but passing a CFL would not change this.
post #7 of 14
Thread Starter 
Jason_kraft, I am aware of all the info on the FB pages. That is not what I was asking about at this time. Thanks for trying to help.
Cakes are my canvas and icing is my medium.
Reply
Cakes are my canvas and icing is my medium.
Reply
post #8 of 14
If you want to fight the SC DOR on this you would need them to carve out an exemption...this will be a tough battle considering the budget issues most states have had.

The relevant exemption in CA is linked below under 1603(c), but it's probably too broad to be adopted by SC. Hopefully they will be OK with a more narrow exemption tied to the CFL income limits. Good luck!
http://www.boe.ca.gov/lawguides/business/current/btlg/vol1/sutr/1603.html
post #9 of 14
Quote:
Originally Posted by grandmomof1

Our state has just passed the CFL. Does the state you operate in require you to collect and pay sales tax on everything you sell? When responding would you tell me what state you are from?



In Colorado, like Texas and a couple of the other posters, no tax unless the costomer is going to sit and eat it on your premises. It's the difference between selling a food product (no tax) and a meal (tax).
post #10 of 14
grandmomof1, did you ask us what state we are in and if our state collects sales tax?

I live in NY and for the most part, baked goods are not taxable. http://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/listings_of_taxable_and_exempt_food.htm

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post #11 of 14
In AZ (at least in the city of Tucson) any item that is a prepared food is required to collect tax. When I called the division, they said that food from the grocery store did not collect tax, and the test was if the store where you purchased it took food stamps as payment icon_confused.gif If it did, then you didn't have to pay tax. Which boggled my brain on that a plastic domed birthday cake from Safeway was not taxed, but a counter service bakery would have to charge tax? Huh? Regardless of that, she said that specialty food providers are considered to be like a caterer, and that requires tax.
post #12 of 14
Thread Starter 
Quote:
Originally Posted by MimiFix

grandmomof1, did you ask us what state we are in and if our state collects sales tax?

I live in NY and for the most part, baked goods are not taxable. http://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/listings_of_taxable_and_exempt_food.htm



Yes, I just wanted to know what other states were doing that had CFL's in place. This was more of a "gathering info" question. Thanks, for the links.
Cakes are my canvas and icing is my medium.
Reply
Cakes are my canvas and icing is my medium.
Reply
post #13 of 14
Thread Starter 
Thanks everyone for your help.
Cakes are my canvas and icing is my medium.
Reply
Cakes are my canvas and icing is my medium.
Reply
post #14 of 14
WV and MD both require a 6% tax.

One thing to look into even if your products are exempt is delivery. That is also taxed in my two states and many others.

Some of you deliver cakes at fairly high prices. If the tax is not collected, an audit years later may produce an unpleasant surprise.
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