dianasweetcake Posted 20 Mar 2012 , 1:47am

I have searched for hours to no avail. I am not in a position to cough up the large expenses and the dedication of time and energy to a new storefront or renting a kitchen, however, I do pride myself on my work and love creating beautiful baked goods. I recently baked a very large order for a friend and was so happy withe the final result however I did feel taken advantage of as I spent all week slaving over the desert table i created for her. I decided if i want to do this again for someone in the future I must charge because my time is very valuable and I do deserve it. I have known about people who bake from their homes in CA numerous times. Although I do not plan to start a large business, if i do bake for another acquaintance at a cost, can anyone tell me what the penalty would be for doing it out of my unlicensed kitchen? I just need to know what the fine or penalty is for this in CA. If anyone can tell me I would greatly appreciate it!

52 replies
JaeRodriguez Posted 20 Mar 2012 , 1:54am

Your best bet is to contact your local health department! I emailed mine and they got right back to me.

Gerle Posted 20 Mar 2012 , 2:03am

There is a cottage food law in the works in California, AB1616. It might be worth your while to check into it and see it's status, and wait until/if it's passed before you start baking from your home.

auntginn Posted 20 Mar 2012 , 2:38am

The penalties in CA are stiff whether you produce from home or just do not have the proper licensing. Read this post about a big named business. It goes to show that the state is not playing around They keep up with things such as social media groups and advertising to find the people who think they don't have to play by the rules.

The Cottage Food Law, is in the State Senate already so that is encouraging for all those who are waiting to open a home kitchen.

Here is the link.
http://cakecentral.com/cake-decorating-ftopict-741163.html

petiterouge42 Posted 20 Mar 2012 , 4:35am

If you are in no position to pay to legitimately run a business, I don't think you are in a position to pay the fines/penalties whatever amount they end up being.

I can't believe you posted on a forum to find out the fines of running an illegal business to weigh your options of how much risk you run in doing so. If you can't legally sell cakes then you shouldn't. You are risking your future reputation if you ever do become legal, and you are risking a lawsuit in addition to fines and penalties.

I know you posted asking what the fines are- but I think that should be completely irrelevant. Running an illegal cake business is completely unethical and unsafe for both you and your "customers"; even if you are only selling to acquaintances.

Sorry if that is not what you wanted to hear.

cashley Posted 20 Mar 2012 , 4:52am

I know in my city in Canada the fine can be up to $10,000, I do not think that running a illegal business is worth the risk of civil lawsuits and fines. I bake for my family but do not sell to anyone and I know lots of people do it, doesn't mean that it is right to do. It is only time before people get caught.

silverdragon997 Posted 20 Mar 2012 , 5:11am

The CA Cottage Food Law is being voted on on Tuesday the 27th. I'd say hold your horses and see what happens there. I'm keeping all my fingers and toes crossed that it passes!

Sunshine0063 Posted 20 Mar 2012 , 6:27am

go to this forum on cake central there is a link that will take you to a pettition to sign for the California Cottage Food Law. I've already signed and sent it to many of my friends via facebook to have them sign also.

Sunshine0063 Posted 20 Mar 2012 , 6:31am

disregard that last link, I don't know how it went from the correct forum link that I am posting now to the google one above.

http://cakecentral.com/cake-decorating-ftopict-739800.html

LisaPeps Posted 20 Mar 2012 , 8:35am

You could lose everything you own if she sues you because you make her and her guests ill... you have no insurance. Hypothetically speaking.

scp1127 Posted 21 Mar 2012 , 7:09am

This is rediculous. Do you want us to help you cheat on your taxes too?

There are a multitude of CC members from CA who have sacrificed to be licensed. This post is unfair to every one of them.

Those laws are there for public safety, tax collection and business license fees. If you don't have the money to start, choose a career that doesn't require a specialty license. There are plenty.

How are you going to collect sales tax without a tax license, which needs a business license and an HD permit? As someone posted, how are you going to get insurance with no license? You can, but if there is a claim, it will be denied.

In areas where the investment to become licensed is high, you are more likely to be turned in. You only have to irritate one legal baker to have yourself turned in. And you have just managed to irritate hundreds in a few minutes, so I would guess that your chances are higher than normal.

kelleym Posted 21 Mar 2012 , 3:12pm
Quote:
Originally Posted by scp1127

This is rediculous. Do you want us to help you cheat on your taxes too?



I highly recommend getting spell check, or learning to spell "ridiculous" before you repeatedly accuse other members of being so.

itsacake Posted 21 Mar 2012 , 3:47pm

As an aside, there is no state sales tax on cake in California. The state board of equalization has told me repeatedly that cake is food and it is therefore not taxed in California. Therefore they do not want to give me a number or license or registration--which has it's own complications... ( However, if you deliver cake and stay to serve it THEN you have to collect tax on the service.)

My other comment would be that legal advice you get in a forum on the internet is worth almost as much as what you pay for it.

jason_kraft Posted 21 Mar 2012 , 6:19pm
Quote:
Originally Posted by itsacake

As an aside, there is no state sales tax on cake in California. The state board of equalization has told me repeatedly that cake is food and it is therefore not taxed in California



Cake (and other food) is taxable in California in certain situations, for example if it is served for consumption on the seller's premises (i.e. you have a seating area and you sell cake by the slice on a plate with silverware).

http://www.boe.ca.gov/pdf/pub61.pdf
http://www.boe.ca.gov/lawguides/business/current/btlg/vol1/sutl/6359.html

Amberwaves Posted 21 Mar 2012 , 6:32pm

Perhaps you should just get a job working for someone who IS legal? You may be very surprised at how difficult it really is to own and run a business, even a small one. If you work for someone else you can learn a lot from them, satisfy your love of creating beautiful baked goods and use that time to decide if owning a business is really what you want to do.

itsacake Posted 21 Mar 2012 , 8:19pm

Jason, you are, of course, as is virtually always the case, quite correct. It's the same with frozen yogurt which is taxed if you eat it in the yogurt store, but not taxed if you take it away. Nothing is ever simple in California !

auntginn Posted 21 Mar 2012 , 8:38pm

I don't think the op wants to own a business, if I understood the post right, she just wants to be compensated for her time. lol... Join the crowd, That's what we are doing by opening a business. She knows very well the cost involved, but your decision needs to be whether the investment is worth the sacrifice you'll make in the beginning to lay your head down at night and sleep well.

jason_kraft Posted 21 Mar 2012 , 8:44pm
Quote:
Originally Posted by auntginn

I don't think the op wants to own a business, if I understood the post right, she just wants to be compensated for her time.



If you want to be compensated for your time, you have two options: work for someone else, or own your own business.

If you don't want to work for someone else and you don't want to run a business, you are perfectly free to pursue cake decorating as a hobby and donate your creations.

jason_kraft Posted 21 Mar 2012 , 8:47pm
Quote:
Originally Posted by itsacake

It's the same with frozen yogurt which is taxed if you eat it in the yogurt store, but not taxed if you take it away. Nothing is ever simple in California !



I believe several states have this rule regarding food and sales tax. If the cashier asks if your food is for here or to go, you can save yourself some money by answering the latter even if you will be eating on site.

jgifford Posted 21 Mar 2012 , 9:04pm

In Texas, if you provide a place to eat OR provide eating utensils, the food is taxable. Napkins are not included.

scp1127 Posted 23 Mar 2012 , 8:35am

KelleyM, sorry my one letter misspelling bothered you so much. I have had a wrist injury from a car accident for over thirty years and I am just learning to type with two hands. I have only been trying since January. My wrist is always in a brace when I am home. Since I have been doing this, I have had more misspellings. That is why some of my posts are edited.

Sorry my injury is offensive to you. I guess my wrist injury is a measure of my ability to spell.

By the way, I had two misspelled words in this post, but I caught them.

costumeczar Posted 23 Mar 2012 , 10:58am

Haha! If I was judged by the misspellings I create by typing really fast and really inaccurately I would have been condemned long ago. Now that I got an iPad it makes it worse With the autocorrect, too. I just corrected five things in that last sentence.

I have to agree that it's ridonculous to ask what the penalties for doing something illegal are as part of the decision-making process about whether to start a business. If its not legal don't do it until you can do it legally.

Panel7124 Posted 23 Mar 2012 , 11:40am
Quote:
Originally Posted by costumeczar

I have to agree that it's ridonculous to ask what the penalties for doing something illegal are as part of the decision-making process about whether to start a business. If its not legal don't do it until you can do it legally.




Yeah, it's ranunculous. icon_wink.gif
LL

costumeczar Posted 23 Mar 2012 , 11:50am

Love the smiley face!

leah_s Posted 23 Mar 2012 , 12:40pm

[quote="jgifford"]In Texas, if you provide a place to eat OR provide eating utensils, the food is taxable. Napkins are not included.[/quote]

similar in KY. I can sell you a whole cake without tax, but if I slice it, OR hand you a whole cake AND a fork, it's taxable. Napkins has no impact on taxes.

kelleym Posted 23 Mar 2012 , 12:40pm
Quote:
Originally Posted by scp1127

KelleyM, sorry my one letter misspelling bothered you so much. I have had a wrist injury from a car accident for over thirty years and I am just learning to type with two hands. I have only been trying since January. My wrist is always in a brace when I am home. Since I have been doing this, I have had more misspellings. That is why some of my posts are edited.

Sorry my injury is offensive to you. I guess my wrist injury is a measure of my ability to spell.

By the way, I had two misspelled words in this post, but I caught them.



It's not your injury that's offensive to me. Don't blame repeatedly spelling the same inflammatory word wrong (the same word that you repeatedly accuse members of this board of being) on your wrist. That's, um... ridiculous. icon_smile.gif And you sure do type a LOT for someone with such a terrible injury. I am impressed. icon_smile.gif

(this list was PM'd to me)

http://cakecentral.com/modules.php?name=Forums&;file=viewtopic&t=741404&postdays=0&postorder=asc&highlight=rediculous&start=15
http://cakecentral.com/modules.php?name=Forums&;file=viewtopic&t=741268&postdays=0&postorder=asc&highlight=rediculous&start=15
http://cakecentral.com/modules.php?name=Forums&;file=viewtopic&t=704925&postdays=0&postorder=asc&highlight=rediculous&start=30
http://cakecentral.com/modules.php?name=Forums&;file=viewtopic&t=740230&postdays=0&postorder=asc&highlight=rediculous&start=15
http://cakecentral.com/modules.php?name=Forums&;file=viewtopic&t=732153&postdays=0&postorder=asc&highlight=rediculous&start=15
http://cakecentral.com/modules.php?name=Forums&;file=viewtopic&t=738479&postdays=0&postorder=asc&highlight=rediculous&start=15
http://cakecentral.com/modules.php?name=Forums&;file=viewtopic&t=726082&highlight=rediculous
http://cakecentral.com/modules.php?name=Forums&;file=viewtopic&t=723388&postdays=0&postorder=asc&highlight=rediculous&start=150
http://cakecentral.com/modules.php?name=Forums&;file=viewtopic&t=709584&postdays=0&postorder=asc&highlight=rediculous&start=75

By the way, around here some people always say "you have to know the risks if you're going to operate illegally". So our OP was asking what one of the risks was, and all of the sudden she's "rediculous".

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