KuyaRomeo Posted 17 Aug 2011 , 1:58pm
post #1 of

Can someone help shed some light?

Does NY State have a Cottage Food Law? Or do we only have the Home Processor Exemption? Are they one in the same, or are they totally different entities?


Secondary, who do we contact to start pushing for support of a Cottage Food Law in New York state? Where do we begin? How do we lobby for this?

28 replies
SugarFiend Posted 17 Aug 2011 , 2:47pm
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As soon as I saw the title of your post, I KNEW you were in NY. I feel your pain!

It's confusing, without question. My understanding is that the Home Processor Exemption (State Dept. Of Ag) IS the NY version of a cottage law, which only applies if the local Health Department doesn't have specific requirements that override it. That's just how my overloaded little brain pieced it together - I could be completely wrong.

I personally think it's ridiculous to have such inconsistencies within one state. Sales tax is a good example, too. Is there any other state out there that has different sales tax from county to county, and even city to city?

I wish I had an answer, and I would love to see it changed. But it seems to me (and I'm just guessing) that since even sales tax is all over the place, there must be some provision in NY law that allows that sort of thing across the board. So fixing the Home Processor mess might open a whole new can of worms that extends into sales tax and goodness knows what else. Changing something that far-reaching would probably take some serious muscle. And truth be told, I think we poor saps trying to start baking businesses are low on the totem pole compared to all the municipalities who would have kittens if NY said, "No, you can't charge whatever you want for sales tax anymore."

But hey, ya never know... Maybe it IS completely separate and easily enough changed.

Gosh darn it. Now I'm getting all riled up, thinking about calling my state congressman... icon_lol.gif

ranae5463 Posted 17 Aug 2011 , 3:31pm
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OMG - let me tell you about differences from city to city and county to county. I live in a county in IL that has twin cities, well actually it is now three all "hooked on" to each other and has several other small towns and villages, three of which are near 10,000. The sales tax in each one is different. The state has its base rate, each city has levied their own various rates and the County has also levied certain rates for whatever various referendums have passed. It is difficult to keep track. And then of course we have two health districts, aside from the state department. We have the city health district and the County public health district. You are not alone. icon_biggrin.gif

LaWmn223 Posted 17 Aug 2011 , 4:03pm
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Alabama has different tax rates per county and inside city limits and charges tax on groceries...Mobile Alabama's tax is 9.5% and now makes business owners within the city limits charge tax on items shipped out of state. thumbsdown.gif

SugarFiend Posted 17 Aug 2011 , 4:39pm
post #5 of
Quote:
Originally Posted by ranae5463

OMG - let me tell you about differences from city to city and county to county. I live in a county in IL that has twin cities, well actually it is now three all "hooked on" to each other and has several other small towns and villages, three of which are near 10,000. The sales tax in each one is different. The state has its base rate, each city has levied their own various rates and the County has also levied certain rates for whatever various referendums have passed. It is difficult to keep track. And then of course we have two health districts, aside from the state department. We have the city health district and the County public health district. You are not alone. icon_biggrin.gif




Yikes! LOL so NY isn't the only screwed-up state! Another weird thing about sales tax in NY is that if your NY business sells & ships something to someone in a different part of NY, you have to charge them the sales tax that applies to THEIR area. Very fun. There are only like, oh, I dunno, ten MILLION different rates out there... icon_rolleyes.gif

But hey, didn't I just read somewhere that IL just passed a cottage foods law, or were close? If so, that gives me hope!

(Inching towards the phone to call my state congressman...)

jason_kraft Posted 17 Aug 2011 , 4:49pm
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Quote:
Originally Posted by SugarFiend

Yikes! LOL so NY isn't the only screwed-up state! Another weird thing about sales tax in NY is that if your NY business sells & ships something to someone in a different part of NY, you have to charge them the sales tax that applies to THEIR area. Very fun. There are only like, oh, I dunno, ten MILLION different rates out there... icon_rolleyes.gif



That's pretty much the norm for most states. Most states have a state sales tax which is used to pay for statewide services, and counties and cities often tack on their own sales tax to pay for services at the county or city level. The tax rate will be different from county to county (and city to city) depending on how many services in that county/city rely on sales tax funding.

Any halfway decent POS system will be able to automatically determine the correct sales tax rate based on the customer's delivery address, as there are services that provide this information for download on a regular basis. Of course that's probably overkill for a custom cake shop that might only serve a few counties.

MimiFix Posted 18 Aug 2011 , 12:09am
post #7 of
Quote:
Originally Posted by KuyaRomeo

Can someone help shed some light?

Does NY State have a Cottage Food Law? Or do we only have the Home Processor Exemption? Are they one in the same, or are they totally different entities?


Secondary, who do we contact to start pushing for support of a Cottage Food Law in New York state? Where do we begin? How do we lobby for this?




New York has had a cottage law since the late 1970's, which is called the Home Processor Exemption. It's not easy to navigate all the rules but it is a great law that has no permit fee. And it allows us to bake at home which means very little overhead.

Atomikjen Posted 20 Aug 2011 , 12:19am
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I'd definitely be interested in getting clarification from anyone (health department or agriculture) and attack this with a group if anyone is interested, I'm in suffolk county.

any takers?

kelcyrenee Posted 20 Aug 2011 , 12:27am
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When we had the agricultural guy up, he only knew what he was responsible for. We asked what we had to do to be able to use the fruits & veggies that we grew and he didn't know. He could only tell us we couldn't until we talked to another guy, but wasn't sure who that was. Good luck on any clarity. I would be interested also. I am in upstate NY.

MimiFix Posted 20 Aug 2011 , 8:02pm

Greetings Atomikjen and kelcyrenee,

The NY Dept of Ag & Mkt rules are not always easy to understand, and some of the rules (such as "no internet presence") make no sense. I'm on the board of the NY Small Scale Food Processors Assoc (SSFPA) and we have talked about advocacy issues. We need help and a strong voice. If you're interested, please email me (kelcyrenee, I need your location/city) and I will send info for your regional contact.

Atomikjen Posted 23 Aug 2011 , 11:29pm
Quote:
Originally Posted by MimiFix

Greetings Atomikjen and kelcyrenee,

The NY Dept of Ag & Mkt rules are not always easy to understand, and some of the rules (such as "no internet presence") make no sense. I'm on the board of the NY Small Scale Food Processors Assoc (SSFPA) and we have talked about advocacy issues. We need help and a strong voice. If you're interested, please email me (kelcyrenee, I need your location/city) and I will send info for your regional contact.




strength in numbers!!! I'll see if we have others in my area interested. =D

let me know what can be done. I'd definitely love to get something going.

LOL, obviously. icon_wink.gif

KuyaRomeo Posted 25 Aug 2011 , 1:45am

Ok I have some news . . .

I have talked to the AG, and Health Department.

1) Food processor law is like a food cottage law, except we can not sell to customers directly. We can only sell at farm market or wholesale (to restaurant, hotel, catering business . . etc). But we can not take special orders (like birthday cakes), as this would make us a retail bakery.

So . . next . .

I emailed my senator (Breslin) and mailed him a letter asking what it would take for NY to consider a specific cottage law where we can sell to customers on a very small scale, like some other states.

If you wish to contact your senator (in NY) and request the same . . and I suggest you do so that we can overcome this obstacle . . . Here are some of the points I made:

1. Several other states have food cottage laws allowing in home bakeries to sell directly to customers on a small scale. (under $15,000 gross annual profit)

2. By selling wholesale, our products already end up in the hands of consumers, so it just makes sense that we should be allowed to make to order without storing goods.

3. Many bakers are already doing this 'under the table', and by bringing it 'above the table' NYS can help regulate food and safety issues.

4. By bringing it 'above the table' NYS can begin to collect sales tax from these under the table bake shops.

5. It is helping the community grow, as we use local products from local farms and markets.

6. It gives small businesses a chance to grow in small affordable steps.

7. It just makes sense. We aare 99% there . . .

8. WE VOTE


You can email your NYS Senator here

http://www.nysenate.gov/senators

However, I suggest both email and postal letter.

Let's get this going . . The small business needs a chance here in NY

Atomikjen Posted 25 Aug 2011 , 2:09am

Kuya-you are awesome!

thank you for the additional information. I'm going to add it to my overflowing folder of research and rally my friends in the baking community to write to their senators too. It would be great to get this going even before the holidays. (wishful thinking)

Thank you!

KuyaRomeo Posted 25 Aug 2011 , 2:25am

I hope we can all (In NY) come together and contact our legislature, assemblymen and senators . . . keep emailing them and writing them . . . keep it up until they do it.

Again, it just makes sense!! We are almost there, just one more step:

NOTE:

Here also is a link to contact your NYS Assemblyman:

http://assembly.state.ny.us/mem/?sh=search


Here is a copy/draft of the letter I mailed my senator and assemblyman. I will keep sending letters, and emails to them, lobbyists and anyone I can, until we get this done:


I am contacting you in regards to requesting an amendment to the 'Home Food Processing Exemption'.

Currently this exemption allows an approved, inspected, home bakery to bake non perishable, limited products (such as cookies, cakes, closed pies, etc) and sell them (only) to wholesale, such as restaurants, catering companies, etc OR to sell at farm market venues.

This law does not allow the home baker to sell these same non perishable products directly to a consumer. This prevents many of us from making a birthday cake or wedding cake directly for a client. To do so, would force us to have a commercial kitchen, even if we only make one cake per month.

Why NY Should amend the Home Food Processor Exemption, to allow sale directly to consumer:

1. 13 other states already allow this, under a "Food Cottage Law". Allowing home bakeries with non commercial kitchens to sell limited products on a small scale directly to consumers (example: under $15,000 gross)

2. The home food processor exemption, already in place in NY already allows us to sell to wholesale, resellers which places our baked goods in the hands of consumers. It just makes sense that we should be allowed to make a simple birthday cake directly for a consumer. In both scenarios our cakes end up with the consumer.

3. Already, many home bakers are already selling to consumers directly, 'under the table' with no regulation and paying no sales tax. Bringing this 'above the table' allows for regulation and sales tax collection to NYS.

4. This will help the local economy as home bakers buy ingredients from local farms and local businesses. As home bakers grow into small retail bakeries, they have potential to create jobs and support their communities.

5. It will help make NYS more 'small business friendly'. Starting a small business is very complicated, risky and expensive. Allowing a home business to take small steps and grow into a larger business, is less risky for the business owner, the community and the state. Often small bakeries are forced to invest in full retail outlets and commercial kitchens, getting in way over their financial abilities. The financial failure can be felt throughout the community and the state.

6. It just makes sense. The NYS home processor exemption provides requirements for inspection, health and safety, and regulation. One extra step will allow NY to modernize and join the other states, in allowing us to sell limited products on a small scale directly to consumers.

7. Health risks do not increase by allowing us to sell limited products directly to consumers. In fact, we often make to deliver . . .meaning that our products are picked up or delivered immediately, and not stored. Making it even safer for consumers, then selling first to a wholesaler or retailer.

8. Either way, or products are consumed by customers. Whether we sell to wholesale first, or direct. Therefore selling direct is no less safe.

9. Lastly . . We (small bakers, families, extended families, friends) ALL VOTE.

Please consider this proposal to amend the existing Home Food Processing Exemption, to allow these same limited, non perishable goods directly to consumers.

Many of us are simply trying to do the right thing. We love baking and making a few birthday or wedding cakes for family and friends. Allow us to do this above the table.

Thank you

Baker, Taxpayer, Voter

jason_kraft Posted 25 Aug 2011 , 3:12am

Regarding sales tax, I believe most cottage food sales (i.e. cakes that are not consumed on-premises) are exempt from NY sales tax anyway, so there would be no change there.

Legalizing direct cottage food sales would increase state income tax revenue though, and you might also suggest that the cottage food license come with a small annual fee relative to total income in order to defray the cost of implementing the law.

MimiFix Posted 25 Aug 2011 , 12:10pm
Quote:
Originally Posted by jason_kraft

Regarding sales tax, I believe most cottage food sales (i.e. cakes that are not consumed on-premises) are exempt from NY sales tax anyway, so there would be no change there.

Legalizing direct cottage food sales would increase state income tax revenue though, and you might also suggest that the cottage food license come with a small annual fee relative to total income in order to defray the cost of implementing the law.




Yes, most baked goods are exempt from NY sales tax... I've heard that the (free) Home Processor permit may end due to budget constraints and lack of inspectors. Whenever I suggested the state impose a small annual fee to help offset costs, people became irate. "Who's side are you on?" I was asked. Uh, yours.

Atomikjen Posted 25 Aug 2011 , 5:43pm
Quote:
Originally Posted by MimiFix

Quote:
Originally Posted by jason_kraft

Regarding sales tax, I believe most cottage food sales (i.e. cakes that are not consumed on-premises) are exempt from NY sales tax anyway, so there would be no change there.

Legalizing direct cottage food sales would increase state income tax revenue though, and you might also suggest that the cottage food license come with a small annual fee relative to total income in order to defray the cost of implementing the law.



Yes, most baked goods are exempt from NY sales tax... I've heard that the (free) Home Processor permit may end due to budget constraints and lack of inspectors. Whenever I suggested the state impose a small annual fee to help offset costs, people became irate. "Who's side are you on?" I was asked. Uh, yours.





I don't disagree with a fee. It can't be more than what we'd have to pay per hour to do a random cake here and there if we were to rent a kitchen at $25/hr (incubator kitchen rate near me).

I imagine we'd also have to claim our income (obviously) from our cake baking to the IRS and possibly usage of space and utilities. We'd be paying taxes on that too? I'm not really that knowledgeable on that part.

I'm simply looking for a way to make ends meet and do what I love. I work full time at a unfulfilling job during the week so the cake business will give me hope for my family's future without having to dig into our already tight budget in order to get started. If I personally were to see my business growing to the point of "I NEED RETAIL SPACE" it would definitely be a great starting point to get something like this passed so I'll get there and get a space and sell to the public, etc, etc, yadda yadda yadda... you all know how that goes. icon_wink.gif

We have to start somewhere. I like my hobby but want it to be my career. =D

Thank you all so much for the insight and information. Will be drawing up a letter myself and rallying my local baking friends to do the same.

We can do this!!!

jason_kraft Posted 25 Aug 2011 , 5:53pm
Quote:
Originally Posted by Atomikjen

I imagine we'd also have to claim our income (obviously) from our cake baking to the IRS and possibly usage of space and utilities. We'd be paying taxes on that too? I'm not really that knowledgeable on that part.



Even if you don't have a legal business you are still required to pay income taxes on the net profits from your business (revenue - expenses), penalties for tax evasion can be serious.

The increased revenue from income taxes at the state level (and the federal level) would come from people who did not report income before since they were operating under the radar.

Declaring your business income can even lead to a lower total income tax bill -- if your expenses and other deductions are greater than your revenue, that business loss can often be used to reduce taxable income from other sources unrelated to the business.

theresaf Posted 25 Aug 2011 , 6:04pm

Thanks for posting this initial question - I just tried to look up if there was a cottage law in NYS YESTERDAY! I'm in Nassau County. I'll be looking into this more myself - thanks to all for the information posted and sample letter! That will give us all a little something to do while we wait for H Irene to pass by! Good luck to all in the path.
Theresa

esq1031 Posted 19 Nov 2011 , 11:27am

Thanks kuya for all that information. I am in NY also and it is very frustrating that I, as a current stay at home mom who loves to bake, has this obstacle preventing me from making a living. I will be contacting my representatives and hopefully we will see the necessary changes in the near future so we can all continue to do what we love and make some money from it.

I understand the need to ensure the safety of food products. However, there shouldn't be laws preventing the public from purchasing non potentially hazardous items from sources that they are familiar and comfortable purchasing from. I can't tell you the countless times I have purchased items from local stores and supermarkets that were bad. I actually think it is harder for larger establishments to guarantee freshness because of the sheer volume they deal with.

In my eyes, there are few bakeries whose products taste as fresh or as good as what you get from a home baker. Everyone has to start somewhere and it's not right that we have to jump through these loopholes to see if there is even a demand for our product. I have heard of many people who started " under the table" before becoming "legit". It's not fair that there are these obstacles in my way preventing me from legally selling my product to someone when there is a demand for it. However, I know people do it, and I honestly don't blame them. Not all of us have the resources to do what the laws deem necessary for us to legally sell our products. This country was based on the premise of being free and making a living. I just hate to think of how many of us will be prevented from making a living if the laws don't change.

Anyway, sorry about the rant, but my frustration really surfaces around this time of the year when I think of all potential business that I have to pass up.

Thanks for listening,
Jackie

Gourmet71 Posted 19 Dec 2011 , 6:56pm

Hi all, I'm new to Cake Central! (& LOVE it) I just saw this post and I'm in!! @ atomikjen can we get an update on the letter that you sent, please? I would love to know the outcome. I don't bake cakes, I do mostly cookies, cupcakes & candy. I rent a kitchen for $100 p/day. I can use it from 4:00 pm until 6:00 am the following day. But even if I need it for a couple of hours, I still have to pay $100. I've checked out several other kitchens & they were either too small or too Gross! But none of them are as clean as my own kitchen. Not to mention lugging all your stuff with you! One of them wanted $25 p/hour & didn't even have an oven!!! Just a large tabletop toaster oven!!! Really??

SaraReubens Posted 21 Feb 2012 , 8:18pm

I live in Rochester and I literally JUST got off the phone with a gentleman from the Department of Agriculture and because I had said I wanted the Home Processor registration for cakes he almost wouldn't send anyone out to my house. He said that this registration is ONLY for people selling to a farmers market and if you plan to sell in any other way you have to go to the Department of Health and have a commercial kitchen. However, I then indicated to him that I wanted to sell at the farmers market this summer so he said he would have someone contact me for that, but I guess it's NOT an inspection. It's just a guy that comes and has you sign some papers and that's it. But from other forum threads and other sites I guess people use it for cakes anyway. I'm not sure how it works, but I will find out and report back.

And I am SOOO in for a push for a Cottage Law. Home cakes is such a grey zone for county and state regulations. There needs to be support for those of us who are just starting to build a business but can not possibly build or buy a commercial kitchen.

Renting is an idea I had not considered and might look into that until the regulations can be clarified for we New Yorkers. Anyone in Rochester know of a good place?

jgifford Posted 21 Feb 2012 , 9:13pm

I don't know if this will help anyone, but it's been on my mind while reading this thread. My DH and I owned a restaurant near Hammondsport in Steuben County. I came in one day and found a couple of grape pies in the (pizza) oven. A friend of ours was making pies to take to the state fair and was told by her NYS rep that if she cooked at least one pie in a commercial kitchen then she was covered under the Home Processor regulations. Whether that's correct or not, I don't know. I do know that she made around 100 pies in her home kitchen and baked two in our oven and was told she was fine.

Maybe there's a loophole in there somewhere that applies. HTH

MimiFix Posted 21 Feb 2012 , 9:26pm

No loophole.

jason_kraft Posted 21 Feb 2012 , 9:27pm
Quote:
Originally Posted by jgifford

A friend of ours was making pies to take to the state fair and was told by her NYS rep that if she cooked at least one pie in a commercial kitchen then she was covered under the Home Processor regulations. Whether that's correct or not, I don't know. I do know that she made around 100 pies in her home kitchen and baked two in our oven and was told she was fine.



That doesn't sound right to me. Commercial kitchens are specifically excluded from the NY home processor regulations, and if she's trying to avoid the home processor restrictions (no potentially hazardous food, no retail sales) by baking a token pie in a commercial kitchen that would be covered under the fraud statute.

jgifford Posted 21 Feb 2012 , 9:37pm

I honestly have no idea - - she was told that as long as at least one pie was baked in a commercial oven then she would be fine. At least that's what she told us. Since we were licensed, inspected, insured and all that stuff, we didn't have a problem letting her use one of our ovens. Maybe she was feeding us a line - - who knows?

ladyren Posted 22 Feb 2012 , 3:55pm

Ugh. Doncha *love* NYS ; ) I am in Allegany Co, one county over from Steuben. We really have nothing here (which, really, should be a major selling point for tourism; if you want to get away to a place where this is *nothing*, come here...) The option of renting commercial kitchen space is impossible, since we are just so rural that nothing like it exists. We have a lot of mom and pop diners and restaraunts, but most of them don't want the headache of insurance issues, if they rent out kitchen space, which is truly understandable. I am no where near ready yet, to start my business (gotta get my skills better, first,) but it is really a goal for the future for me. I do have a second kitchen in my home, but its going to need major renovation. It just seems like so much headache, some days...

SaraReubens Posted 13 Mar 2012 , 5:13pm

OK, so to update on my quest for a home processor's permit. The gentleman at the Department of Agriculture said I couldn't sell cakes with a home processor's license and that it didn't even involve a home kitchen inspection, but he would have someone from that department contact me anyway. The woman that called me said that not only would she need to inspect my kitchen for cleanliness and health standards (she couldn't legally send me a list but she mentioned gloves, single use paper towels, being seperated from any pet areas, etc), but that she also needed me to prepare sample labels for everything I would be selling showing ingredients and net weight of each product (it's going to take me a while to put that info together since I've never weighed ANY of my cakes LOL).

The limitations on the permit say that I still can't sell cakes to strangers or to anyone out of NYS, but I tend to make friends with most of my customers anyway. icon_smile.gif And this will be useful for when a "friend" wants me to make their wedding cake and the reception hall requires a license for any outside food to be brought it. It's still up to each individual reception hall as to whether a home processor permit would be sufficient for them, but at least I have a starting point. And for those that won't, I'm still looking into the idea of renting a commercial kitchen for a day.

ladyren Posted 13 Mar 2012 , 5:16pm

Thank you for the update and info, Sara! It seems like a lot of hoops to jump through, but you sound like you are up to the challenge!

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