How Much Does It Cost For A Tax Id Number/order Of Events

Business By Artsygurl Updated 6 Aug 2010 , 6:50am by hollyml

Artsygurl Posted 5 Aug 2010 , 8:33pm
post #1 of 6

Can anyone tell me how much it costs to apply and receive a tax ID number? Is this a long and annoying process?

If I were to legally start selling from home (in PA) I'm pretty sure I have to do all of these things:

- Apply for a Tax ID number
- Do the appropriate licensing requirements and fill out application
- Have my kitchen inspected and approved
- Attain product liability insurance

Am I missing anything? I'm only planning on selling cupcakes and cake bites.

Are home bakers exempt from have to charge sales tax?

Thanks a lot! icon_biggrin.gif

5 replies
Doug Posted 5 Aug 2010 , 8:36pm
post #2 of 6

tax ID should be free.

In NC you apply on line at Dept of Revenue.

Have you gone to the PA Dept of Revenue site and checked around? Might be able to apply online there too.


As for sales tax -- doubt you are exempt.

But - again - go to PA Dept of Revenue site to get the answer for that too.

leily Posted 5 Aug 2010 , 8:41pm
post #3 of 6
Quote:
Originally Posted by Artsygurl

Are home bakers exempt from have to charge sales tax?




This will depend more on the product you're selling and how it's being sold than whether or not you are a home baker.

In my state/county i sell my product and it is eaten off of my property, i do not have a sit down area for eating. So I don't have to charge tax on my cakes.

Now if I sold something with chocolate and a few other items (i forget what the specific items are now) then i would have to charge sales tax. So for me I couldn't even sell cake balls dipped in chocolate or i would have to charge. But chocolate chip cookies i don't have to charge sales tax.

This is definitely something you should contact your state about, or your accountant. Your accountant should be able to either answer these questions, or get them answers for you from the right place.

As for the TaxID number there is a federal site that you can go and get it online, it takes about 5-10 minutes.

MKinPA Posted 5 Aug 2010 , 9:09pm
post #4 of 6

PA is so tough. I decided to rent an off site location instead of baking at home. I also have a cat at home and was told no animals what so ever on the premises where the baking is taking place. No storing of baking supplies in the same frig as my families foods, a separate freezer and oven. etc. For the time being it's easier and less costly for me to rent a place.
Good Luck!

Artsygurl Posted 5 Aug 2010 , 10:23pm
post #5 of 6
Quote:
Originally Posted by MKinPA

PA is so tough. I decided to rent an off site location instead of baking at home. I also have a cat at home and was told no animals what so ever on the premises where the baking is taking place. No storing of baking supplies in the same frig as my families foods, a separate freezer and oven. etc. For the time being it's easier and less costly for me to rent a place.
Good Luck!




Really? Wow... icon_eek.gif I had no clue you had to have a separate refrigerator/freezer/oven...never heard of that before. If that's the case then I'm out of business before I even start haha

hollyml Posted 6 Aug 2010 , 6:50am
post #6 of 6

To get a tax ID number (if you even need one -- which you probably don't if you are a sole proprietorship with no employees, although there's usually no downside to getting one), you fill out an application on the IRS website and get your number instantly. It takes ten minutes or less and there's no fee. Totally not a big deal.

But that presupposes you have all the information you need in order to fill out the application, starting with the name of the business owner. (You personally? Or will you form an LLC or other separate legal entity?) Getting the ID number is not normally the FIRST step when you are contemplating starting a new business. icon_smile.gif

There are all sorts of decisions to be made and information to obtain, not only in terms of the "separate kitchen" issues but also how you're going to handle all the financial and tax reporting, how much and what kind of insurance you need and so on. If you've never been involved in running a small business before, it's usually a good idea to hire a lawyer, accountant, and/or other experts to help you get things set up in a way that fits your specific situation, and make sure you don't miss any critical steps with licensing and permits and so forth.

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