babycakes77 Posted 25 Mar 2011 , 12:07am
post #1 of

I'm trying to compile my checklist of things to do in order to be legit now that Arkansas has passed a Cottage Food law. Could you experienced folks lend me a hand? Here's my list.

Business License
Tax ID number
Liability Insurance (is this required by law or just for peace of mind?)

Anything else? I feel like I'm missing something and have been all over the state website. Thanks in advance for all of your help!

36 replies
tracycakes Posted 26 Mar 2011 , 2:56am
post #2 of

The cottage law that passed does not apply to cakes, mainly for jams and honey to be sold at the Farmer's Market. You still cannot get legal for baking at home unless you have a separate, licensed kitchen. The Arkansas Small Business and Technology Center can be a great help. I advise you to start with them.

tiggy2 Posted 28 Mar 2011 , 12:31am
post #3 of
Quote:
Originally Posted by tracycakes

The cottage law that passed does not apply to cakes, mainly for jams and honey to be sold at the Farmer's Market. You still cannot get legal for baking at home unless you have a separate, licensed kitchen. The Arkansas Small Business and Technology Center can be a great help. I advise you to start with them.


Are you sure about that? I've read the bill and it sure sounds like it applies to baked goods as long as they are labled properly and sold directly to the sonsumer.

SugarFrosted Posted 28 Mar 2011 , 1:17am
post #4 of

Here's the .pdf of the law,and pasted below, the section regarding cake which clearly states:

"AN ACT TO EXEMPT COTTAGE FOOD OPERATIONS, FARMERS' MARKETS, AND OTHER SIMILAR FOOD SALES ENTITIES FROM PERMITS REQUIREMENTS; TO DECLARE AN EMERGENCY; AND FOR OTHER PURPOSES.

DEFINITIONS:
(1) "Cottage food production operation" means a person who produces food items in the person's home that are not potentially hazardous foods, including without limitation:
(A) Bakery products;
(B) Candy;
(C) Fruit butter;
(D) Jams;
(E) Jellies; and
(F) Similar products specified in rules adopted by the Department of Health;"

http://e-lobbyist.com/gaits/text/175694/175694.pdf

I also found this which should answer some questions for the OP:
http://homebasedbaking.com/rules-regulations/arkansas

babycakes77 Posted 29 Mar 2011 , 3:22am
post #5 of

Thanks for all the help! It's been frustrating talking to the city and state agencies. Half the people don't know about the Cottage Food Law being passed so I've been spinning my wheels. Ugh!

Yes, the law does allow for baked items that are "low risk" meaning they don't have to be refrigerated. Now I'm trying to find out if my kitchen needs to be inspected or not. When I talked to the lady in the Environmental Health department she said my kitchen wouldn't need to be inspected but when I talked to someone in the business license department today, she said the City of Little Rock requires it. Aaaarrrggghhh!!! I wish you could just call one number and get all the answers you need, but then that would be too easy wouldn't it? LOL Hopefully I'll get all the answers I need tomorrow.

babycakes77 Posted 31 Mar 2011 , 6:41pm
post #6 of

I did it! I'm legal and legit now! I opened up as a sole proprietorship but will probably change to LLC later on down the line. Here is what I had to do. I'm in Little Rock so things might be different in other cities/counties/etc.

1. Get approval from the zoning department. In Little Rock, it's at 723 W. Markham.
2. Apply for a business license. This office is in City Hall at 500 W. Markham. It's across the street from the Robinson Center downtown on the Broadway St side. I went back and forth over email with the person who approves licenses and in the end her boss told her to give me a license under the cottage food law. It's important to educate a lot of these employees because most of them don't know about new laws being passed.
3. If you're going to be doing business under a business name, you need to apply for a DBA (Doing Business As). This office is the same office where they do marriage licenses. It's in the county courthouse which is across the street from the Robinson Center on the W. Markham side.
4. Apply for a state sales tax ID. This office is in the Ledbetter building on 7th street behind the State Capitol.
5. Get liability insurance. This isn't required, but I would definitely get it for peace of mind.

Hopefully this will help someone else out who's in Arkansas. It was a pain in the rear because I was in my work clothes and heels and let me tell you, all that walking on concrete was not friendly to my feet or my back. All the fees for the license, DBA, and state sales tax ID came to about $180.

CoveredInCake Posted 2 Apr 2011 , 9:59pm
post #7 of

That's awesome!!! I have my DBA and tax ID #. Thank you so much for posting!! I don't have a license. I need to go do that!!

I'm on facebook/coveredincake.ar
Do you have a facebook? We can be FB buddies!! I'm up toward Cabot/Lonoke. icon_smile.gif

babycakes77 Posted 3 Apr 2011 , 8:22am
post #8 of

CoveredInCake, you're welcome! I don't have a facebook page set up for my business yet but when do get it set up I will add you. This is so exciting!

Oh, and go get your license! icon_biggrin.gif

louanne Posted 3 Apr 2011 , 9:04pm
post #9 of

while i am very happy for all the AR cakers that now get to opperate from home, i do feel slightly jilted, only a little, just because i use to do cakes from home ( just for friends and fam) and got a call from the HD though since i wasnt charging they couldnt fine me, so after a long wait i did finally open my shop this past October, so i just missed the cottage food law by a couple of months. Anyways, congrats and good luck to all, even though i have a slight pouty face for a few minutes!

CoveredInCake Posted 5 Apr 2011 , 1:26am

I'm going tomorrow! YAY!! icon_biggrin.gif No more renting a kitchen after that!!

babycakes77 Posted 7 Apr 2011 , 3:22pm

louanne, I understand how you feel. I'd probably feel the same way. Look at it this way, though. You can still do things that us "cottage fooders" can't. You can make and sell goods that have to be refrigerated. icon_biggrin.gif

coveredincake, did you get your license?

sdrper Posted 7 Apr 2011 , 3:43pm

babycakes77 Thanks for the info I am also in Arkansas and tired of going from place to place and no one understanding or even knowing about the new law. I am in the process of getting my license.....I can't wait.....Good luck

babycakes77 Posted 7 Apr 2011 , 6:38pm

You're welcome! I'm glad I could help someone else. Good luck to you too!

tknight088 Posted 9 Apr 2011 , 11:51pm

This is my first post and I am trying my best to get into the cake business and all weekend I have been wondering where do i need to go to get my tax id and so on...Thank You So Much for the Info! And Good Luck with ur business!!!!

jason_kraft Posted 10 Apr 2011 , 12:10am

Info about how to apply for a tax ID number:
http://usgovinfo.about.com/od/moneymatters/a/taxidhowtoget.htm

BJ051977 Posted 29 Apr 2011 , 1:37am

BabyCakes77 - I too live in Little Rock and I have some questions about you getting your licences to bake out of your home kitchen.
Did you get inspected by the Health Department?
What are the benefits to getting a license?

I mainly bake cakes for friends and co-workers, but would like to expand out to a bakery someday. I'm wondering if this is a good first step to take in getting a tax number, license and all that or if I need to wait.

Thanks for your help!
BJ

babycakes77 Posted 29 Apr 2011 , 2:10am

No, I didn't have to be inspected. Under the Cottage Food law, it's not required. If you look at one of my earlier posts in this thread I listed all the steps I took to get my license. The main thing is you have to educate a lot of these workers because most of them don't know about the Cottage Food law being passed. Good luck and let me know if you have any other questions.

snowballwinters Posted 8 Jun 2011 , 6:56pm

so I'm a bit confused, I thought with the passing of the cottage food law you didn't have to be a business and could sell some products out of the home.

So are you getting the business license, tax id, etc... so you can be listed as a business and have the benefits of that?

I know that roadside farmers don't charge taxes and wouldn't that apply to this under this bill?

kswesterman Posted 24 Jun 2011 , 1:24am

Okay, I'm running into roadblocks here! I'm in Benton, not Little Rock, and am having problems getting any real answers. Several phone calls & left messages to the Dept. of Agriculture with no response. I called my city zoning department, they told me I need to call the Health Dept. and get approval first. So I call both the State & City of Benton Health Dept. and they both basically tell me the same thing. No requirements outside of what is stated in the law, they don't perform inspections & I don't need approval from them to do it. I call to see about getting a business license. They tell me to call the County Clerk's office to get a Privilege License, then come to them and get my DBA. So I call the County Clerk and they tell me that I need to call the City Clerk (which as far as I can tell is the same person I talked to in the Zoning Dept). When the City Clerk calls me back, she tells me what I need to do to get a Privilege License (I need to get a Home Occupation Permit, not sure if that is in addition to a Privilege License or in place of it). Then when I mention the Cottage Food law to do home food processing she tells me that they probably won't allow me to do that because the city hasn't met to discuss that yet; she also tells me that since that was signed in the most recent legislative session that the law won't go into effect until July 1 anyway. Now, in reading the law myself, it looks to me like this was to go into effect immediately (there is actually the section at the end that indicates it is an emergency action so that people can do this legally during this farmer's market season). So, I am now at a loss as to how to proceed further. As far as I can tell, people aren't real knowledgeable about this law and thus choose to either put it off on another department, or try to discourage you from proceeding with it. Does anyone here have any suggestions for who I can call, maybe at a state level, that might be able to clear this up for me? Thanks!

myheartsdesire Posted 2 Jul 2011 , 3:17am

Wow, who knew there were so many Arkansans in here!icon_smile.gif This is great info to learn. Someday when I can quit working it will be of great benefit for me. Or maybe a cake to sell here and there.icon_smile.gif What kinds of fees and taxes are you responsible for after the initial fees?

louanne Posted 3 Jul 2011 , 7:41pm

you need a sales and use tax id and pay taxes to the state for what you sell, then file your stuff with your regular tax return

kswesterman Posted 7 Jul 2011 , 3:18pm

babycakes77 (or anyone else who has gone through this), I have a question about the State Sales Tax ID. I assume that you didn't incorporate your business or anything like that, correct? Just went and applied for a business license (or a Privilege License as the call it in Benton) and the DBA? Not trying to get too personal here, but I ask because I am not sure how to fill out the form for the Sales Tax ID. Would I mark Sole Proprietor and show my social security number? I did as listed about, got my license through the City Clerk in Benton and then applied for the DBA. Also, can you tell me what the cost was? I am seeing different amounts in different places, and just want to be prepared for the cost. Thanks!

louanne Posted 7 Jul 2011 , 7:50pm

you shouldnt actually have to apply for a dba, just make sure the name you are using isnt already in use. fill out the sales and use form from dfa fill in your name and the dba use your ssn the fee is 50. if you want an fein you can sign up through the irs ( cam even do it online) i dont think it cost anything unless you want your number instantly ( in which case i think its 20) other wise it will come in the mail in about 3 weeks, as far as your state sale and use it usually takes ar dfa a month or so to process it, the sales and use id is what you will file your sales tax with and also what you will use to buy ingredients tax exempt. hth

kswesterman Posted 7 Jul 2011 , 8:23pm

Thanks for the response! I've really been having a hard time getting any clear answers from anyone that actually works in the state or city offices!

klangl Posted 7 Jul 2011 , 8:28pm

I live in Central Ark. I didn't realize there were so many cakers from Arkansas on here, good to know!! I don't make cakes for profit, but I have been thinking about getting my license too since they passed the Cottage Food Law, I really appreciate all the info that you all have provided.

louanne Posted 8 Jul 2011 , 5:06pm

the problem with getting answers from the hd offices is they are all pretty clueless on the cottage food law. they know it exists and that's about it. I have a store front, so when the cottage law passed, i asked my health inspectoe about it so to find out how it could potentially affect my business. He told me that most offices are just interpreting it their own way because even they cannot get clear answers on it, he says he just tries to enforce that nothing that could be potentially hazardous is being produces from home kitchens. i would personally just keep a copy of the law on hand to show anyone you are operating legally under the cottage law just in case.

JoanieB Posted 11 Jul 2011 , 1:29am

I've done this and am making cakes from home as a legal business. The cottage foods law IS NOT exclusive to farmers markets and jams and blah blah blah. That's what the non educated employees keep incorrectly passing along.

All I did was get zoning approval for my city N. Little Rock $50, applied for a federal tax ID, free, Signed up through the AR state website to be an LLC, $40, and signed up for a state tax id number, $50.

That's all I did and I only went through this so I could advertise and use business tax benefits. I was given so much misinformation it was unbelieveable. City hall was being a jerk but I told them zoning said I could have a license and they better send me one and they did. Other then that I wouldn't worry so much. They really have no idea how to navigate this new law.

kswesterman Posted 11 Jul 2011 , 8:23pm

Well, my problem is that the person that I talked to in Benton to get zoning approval told me that "I don't think that we are going to allow you to do that", and then proceeded to tell me that the law doesn't go into effect until July 1 anyway (this was obviously in June that I talked to her). No problem with getting a home occupation permit or a business license, but not for the cottage food law. It seemed obvious to me that she really wasn't at all familiar with the law, especially since she told me that the law didn't go into effect until July 1.

JoanieB Posted 11 Jul 2011 , 8:43pm

That's BS about it not going in to effect until July. However, your local zoning laws trump the cottage food law. Here's the deal, get a home occupation permit for your home office, mine said cake decoration and consultation.

They were really nice at our zoning department and said no one is going to harass me since I'm not having delivery trucks or supplies outside my home or anything like that and even wished me luck and asked for my card. They didn't even care about the cottage law. My license is technically for my home office and the cottage law covers me the rest of the way.

Because without a business license you're covered under the cottage law still you just can't act as a business or receive any business benefits. Your license could say, cake design and consultation or something like that. Tell them you offer baked goods under the cottage food act (which is active) and you want to have your home office listed as your business because you have expenses you want to claim.

Technically though it's up to the zoning department if they want to let you. Mine didn't have to based on their guidelines, they just didn't care.

kswesterman Posted 11 Jul 2011 , 9:31pm

I have a home occupation permit & a business license as an independent distributor (I have a couple of other things that I am also doing), but was actually trying to "go by the book" and make sure I was doing everything correctly. However, it's hard to do that when no one knows what the law is and don't really seem to be overly eager to help you. The statement that she didn't THINK they would let me do that, in addition to the statement that the law didn't go into effect until July 1 (since the whole reason for the law being passed when it was, was so that people could do it during this season's farmers markets) told me that she pretty much wasn't familiar with the law or just didn't want to be bothered with it. Either you will allow it or you won't. I talked to the guy and the Health Department (who put a call into her that wasn't returned to my knowledge) told me that they weren't going to do any inspections and that as long as I followed the parameters set out in the cottage law, that I shouldn't have any problems. I got this response from both the state and the county Health Departments. Again, it just seems to me that noone wants to be bothered with it.

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