Mi Cottage Food Bakers - Tax Question!

Business By NerdyGirl Updated 8 Aug 2011 , 12:41am by NerdyGirl

NerdyGirl Posted 1 Aug 2011 , 5:11pm
post #1 of 7

No one can seem to give me a straight answer, so I thought I'd come here. I need to know if sales tax is charged for cakes made and sold in Michigan - preferrably through a DBA.

Thanks ahead of time!

6 replies
NerdyGirl Posted 1 Aug 2011 , 11:00pm
post #2 of 7

So, can anyone help?

crushed Posted 1 Aug 2011 , 11:13pm
post #3 of 7

The food is exempt from sales tax if it is to be consumed off the premises.

The following is from the Treasury section of Michigan.gov.
( http://www.michigan.gov/treasury/0,1607,7-121-44402_44415_44416-7286--,00.html )

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.

Hope this helps!

NerdyGirl Posted 1 Aug 2011 , 11:15pm
post #4 of 7

Thank you SO much! I've been driving myself crazy looking EVERYWHERE for this. Before they revamped the Cottage Food information on the Department of Agriculture page, it was right there.

You're my new favorite person!

crushed Posted 1 Aug 2011 , 11:32pm
post #5 of 7

Glad I could help icon_biggrin.gif

LorienSkye Posted 8 Aug 2011 , 12:19am
post #6 of 7

Hi there-
Sorry I didn't see this sooner. My accountant told me that no sales tax is necessary. I am a cottage foods business in MI and a registered DBA in my county. She advised me I will only need to be concerned about local, state and fed income tax at end of year based on my gross receipts minus write-offs. Hope this helps!

NerdyGirl Posted 8 Aug 2011 , 12:41am
post #7 of 7

Thanks! Yes. That's what I've learned as well. Now I'm official. icon_smile.gif

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