Ok, so I'm under the impression that if you strictly do cakes that you sell retail to be eaten only off premises that you do not charge sales tax.
So, I'm going to do my quarterly sales tax return and I'm finding that I'm confused. I have to report how much I made in sales but put zero as the amount owed??
I'm so confused....can someone else help??
i think you do need to pay sales tax, not sure as i don't have my own business.
I thought the sales tax when you go in to eat somewhere was actually on the service, not the food. Like when you go to the store and certain foods aren't taxed.
Only food consumed on the premises is subject to sales tax. Look it up at the IRS website.
I don't have a sales tax license because I don't have a bakery where customers walk in and out and you are making or selling cakes by the slice to be consumed on the premises.
I filed my taxes and was fine.
harlemcakelady - thanks so much for the confirmation, it was just strange to have to file the form and to put zero! Did you put on there what you made gross from your cakes as well? Do you file quarterly?? Is there a way to change it to annually.
Sorry for all of the questions. I spent a ton of time on the phone waiting for an answer and waht I found on the website wasn't the easiest to understand - then again, I'm tax illiterate!!
I'll look at my taxes again. I had an accountant do them for me.
I'm a sole Proprietor so I don;t have to file self employment tax. I still have a full time 9-5.
I do my taxes yearly.
I am in Illinois, and I have the sales tax issue on my "to do" list to figure out soon. So far, my sales have all been wholesale, so I have been filling out the sales tax form with zeros. I was under the impression though that when I begin making retail sales I will have to charge and report state sales tax. I hope someone can help clear this up.
yearly huh?? hmmm, I'm a sole proprieter too. I'm def. going to have to talk to an accountant because I'm really not up for filing zero sales tax every 3 months!! It just seems ridiculous to me.
Jessieb758 -- I'm in NY, and my inspector saw my sales tax form, and told me, "yes, you'll likely be filing "zero" for a while." I just send mine in too -- here is the list of exempt items, it's called "Publication 880." If you call, ask them to clarify items on "880" and they will know what you mean.
Fudge is taxed, but marshmallows are not.
Harlemcakelady is correct -- items consumed (like a coffeeshop or restaurant) are taxed, but the same item sold as a bakery, is not.
Hope this helps!
Another important thing to remember is that you have to report purchases made by the business that you didn't pay sales tax on but should have. For example, I ordered a cake plateau and some pans--they came from out of state and I wasn't charged sales tax. You have to pay that with your quarterly report. Since I do mostly cakes but occasional candy, I've paid a lot more sales tax for purchases than sales!