Question For Michigan Cottage Bakers

Business By cakegirl1973 Updated 13 May 2011 , 4:14pm by VanillaCoke

cakegirl1973 Posted 9 May 2011 , 1:05am
post #1 of 12

Hello! I am moving to Michigan this summer. After I move, I would like to operate as a cake business under the cottage law. My questipns are: 1) Do I need a business license to operate under Michigan's cottage law? 2) Will I need to charge/collect sales tax for my cakes? 3) If the answer is yes to either or both of these questoons, what governmental agencies do I need to contact? Thanks so much!

11 replies
NerdyGirl Posted 9 May 2011 , 1:48am
post #2 of 12

You may need a DBA or LLC, depending on the county. Yes, you need to charge sales tax. MI.gov is a good starting point. From there, you can go to the Department of Agriculture website. The Cottage Food Law FAQ is there.

And here's a pre-welcome to MI! It's a great place...aside from our governor. icon_wink.gif

cakegirl1973 Posted 9 May 2011 , 2:04am
post #3 of 12

Thanks, prettymarysunlight. I have taken a look at the Dept of Agriculture website, and one thing that isn't clear to me is whether I can advertise my cakes with a website, as long as I don't accept payment via the internet. Do you know if that is permitted?

Thanks for the pre-welcome. I am excited to start the next chapter of my life in your state!

NerdyGirl Posted 9 May 2011 , 2:17am
post #4 of 12

Yep. You can advertise with a website, but you can't do internet orders/accept payment via internet. I'm getting ready to go legal myself.

And, anytime. If you have any more questions about anything MI related, feel free to contact me. I'm a Michigan girl through and through!

cakegirl1973 Posted 9 May 2011 , 2:28am
post #5 of 12

Thanks so much prettymarysunlight!

crushed Posted 9 May 2011 , 5:23pm
post #6 of 12

You actually don't need to charge sales tax on bakery items if they are not for immediate consumption.

Bakery Items
According to MCL 205.54g(l)(a); MSA 7.525(7)(1)(a), food for human consumption is exempt from sales tax, except for "prepared food intended for immediate consumption."

Bakery items are referenced once in this section. The law says: "Prepared food intended for immediate consumption does not include bakery products for off-premise consumption." [MCL 205.54g(5); MSA 7.525(7)(5)] (Emphasis added.)

Pursuant to this statute, bakery products sold by a grocery store or a bakery for off-premise consumption are exempt from sales tax. Bakery items sold for consumption on the premises are taxable.

This is from the Michigan.gov website.

kristiemarie Posted 9 May 2011 , 5:27pm
post #7 of 12

So, you can't accept any payment via paypal?

They way I understood it is that you can't SELL your cakes online. Not that you can't accept payments. Meaning, you can't advertise a cake and sell that cake over the internet.

Maybe I'm wrong. ??

VanillaCoke Posted 11 May 2011 , 8:25pm
post #8 of 12

You can't be an online business, basically- no 'put three pies in the cart and checkout' kind of thing. There's nothing that says you can't take payments online.

kristiemarie Posted 12 May 2011 , 4:04pm
post #9 of 12
Quote:
Originally Posted by VanillaCoke

You can't be an online business, basically- no 'put three pies in the cart and checkout' kind of thing. There's nothing that says you can't take payments online.




*Whew*

That's what I thought I understood but you never know!

Where are you in Michigan, just curious?

I live in Clinton Township.

cakegirl1973 Posted 13 May 2011 , 3:54pm
post #10 of 12

Thanks eveyone for your advice!

cakegirl1973 Posted 13 May 2011 , 3:55pm
post #11 of 12

Thanks eveyone for your advice!

VanillaCoke Posted 13 May 2011 , 4:14pm
post #12 of 12

I'm on the west side of the state- GR icon_smile.gif

And you do need a business license, but that's pretty easy if you just do the sole proprietorship thing. You should be able to do that at the county clerk's office.

Here's a little excerpt from the mi.gov site about tax:

bakery goods are exempt unless they are sold with an "eating utensil." "Eating utensils" are defined to include knives, forks, spoons, glasses, cups, napkins, straws, or plates.

So don't provide forks and you'll be all set icon_wink.gif

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