Even If You Charge $$ It's A Hobby

Business By -K8memphis Updated 9 Mar 2013 , 2:03am by Annabakescakes

jason_kraft Posted 1 Mar 2013 , 5:21am
post #61 of 81

AAnti-discrimination laws apply to the attributes of the customer, not the product. Every customer has characteristics that fall into a protected class, since we all have race, color, gender, etc.

It would be perfectly legal to refuse to make a denture cream cake for any customer. The illegal situation would be if you made the denture cream cake for an old customer but refused to make the same cake for a young customer (or vice versa).

This is another one of those areas that only applies to transactions involving the general public, so if you make cakes as a hobby and do not sell or advertise to the public then you would not be subject to anti-discrimination laws.

Annabakescakes Posted 1 Mar 2013 , 5:40am
post #62 of 81
Quote:
Originally Posted by jason_kraft 

Anti-discrimination laws apply to the attributes of the customer, not the product. Every customer has characteristics that fall into a protected class, since we all have race, color, gender, etc.

It would be perfectly legal to refuse to make a denture cream cake for any customer. The illegal situation would be if you made the denture cream cake for an old customer but refused to make the same cake for a young customer (or vice versa).

This is another one of those areas that only applies to transactions involving the general public, so if you make cakes as a hobby and do not sell or advertise to the public then you would not be subject to anti-discrimination laws.

Yes, I realize that, but so many people do not. One of the ladies in a church was just in tears at a Women's luncheon I was invited to (so I could bring free cupcakes icon_rolleyes.gif) because she was asked to sew 2 Village People type costumes, with a stuffed "anatomical part" hidden under the loin cloth, and the other was @$$-less chaps... It was for a couple. She was scared to death they were going to sue her little bitty custom sewing business is she refused, and decided to shut the doors of the business, rather than violate her beliefs and the women handing her tissues and patting her back were offering her words of support, such as, "The Lord will provide." And various scripture about being salt of the Earth, and how God's people will be persecuted, and how our reward is in Heaven... I spoke up and told her that she didn't have to sew the costumes if she didn't want to, and there was nothing they could about it, as long as she was willing to provide an alternative to them that she was willing to sew, and told her to not take my word for it, but call an attorney and get a free phone consultation. She is still business, I drive by about once month.

kikiandkyle Posted 1 Mar 2013 , 3:59pm
post #63 of 81

Well it's official - the county health department head called to let me know that it's fine (in my county) to make and sell cakes to friends, even for a profit, without triggering any of their protocols. So long as I don't advertise, I will not be breaking any (of their) rules. I think I may take the food handlers safety certification anyway, in case I decide to do some farmers markets over the summer under the cottage food law here, and just to make sure I'm covering my bases from the start. Now the question is do I tell my friends...

 

Man I wish I had known this before I spent $45 making that 3 tiered cake last week!

FromScratchSF Posted 1 Mar 2013 , 5:10pm
post #64 of 81

I think it's important for anyone contributing information they get from their local authorities to please post your specific geographic location (i.e. City and county of San Francisco, State of California) and the exact name of the office you spoke to (i.e. San Francisco Department of Public Health).  Laws are so different area to area!

debm1 Posted 1 Mar 2013 , 6:17pm
post #65 of 81

It's not okay in PA, unless you are giving the cake away. I just went into business the end of 2012. I started talking with the PA Dept. of Agriculture in June. Also, I started my facebook page which clearly stated that this was a hobby, and NOT a business, but a showcase for my cakes. I also stated that it was my hope to someday be a cake business, but I wasn't yet. I wanted to get some "likes", so that when the news came out that the business was started, I might have some prospective customers.

 

One day I was going to an appliance store (looking for appliances for the new commercial kitchen), and decided to stop in at the bakery next door to compliment them on their cake display in the front window. I also told them that I liked the cakes on their website, and showed the girl a couple cakes that I had done (pictures on my cell phone). She mentioned that they were looking for a decorator, and I said, "Thanks, but I am building a commercial kitchen to go into the cake business". I was not looking for a job. She asked where I was from, and I told her the name of my town. Apparently, this bakery decided to go online to see who is making cakes, and found a few of us in the area with hobby pages (mine would have been recognizable from the cakes I showed to the girl), and decided to report us all as running illegal bakeries from our homes. There are some people that even state what they charge, etc... I suppose those folks did not make out as well as I did. The woman from the bakery could have just sent me a message asking me to make them a cake, and when I turned them down, she would have had their answer, and saved our tax-payer money by not contacting the Dept. of Agriculture, but the next thing you know, I got a phone call from the PA Dept. of Agriculture saying I had been accused of running an illegal bakery from my home. The fellow who came out to investigate was the same man I had already been in contact with, so I knew him. He wrote up the report, that there was no illegal bakery being run, and that I was already in the process of building the kitchen, etc., but I still had to fill out papers and sign them, saying that I would NOT sell any cakes. He made it very clear that if I charged ANYTHING (even just ingredients), that if caught, I could face hefty fines... like $10,000 or $15,000 (I forget which, without pulling out the papers). So, Hobby Bakers in PA, you can GIVE that cake away, but you can't even charge for ingredients.

debm1 Posted 1 Mar 2013 , 6:21pm
post #66 of 81

An idea... maybe make a list of ingredients, and your friend could go shopping, and buy all the ingredients, and drop them off at your house. That way, they bought their own ingredients, and you get to enjoy using your decorating skills. Just a thought...

Spireite Posted 1 Mar 2013 , 7:32pm
post #67 of 81
Quote:
Originally Posted by debm1 

An idea... maybe make a list of ingredients, and your friend could go shopping, and buy all the ingredients, and drop them off at your house. That way, they bought their own ingredients, and you get to enjoy using your decorating skills. Just a thought...

This passed through my mind JUST as I read your final post....after all if I were to ask my Mother in Law to make me a pair of curtains I would want to and expect to go and choose my own patterned material AND  pay for the material/lining/ruffs etc...

Thankfully I don't think we have such strict tax rules in the UK, although my husband is occasionally(maybe 3-4 times a year) paid for playing the church organ...(weddings/funeral etc.) and he fills out a tax return, as it is about £30 a time.

kikiandkyle Posted 1 Mar 2013 , 9:21pm
post #68 of 81

My advice was from the Lake County IL Dept of Health. 

 

Encounters like the one Deb had are exactly why I wanted to check.

-K8memphis Posted 1 Mar 2013 , 9:26pm
post #69 of 81
Quote:
Originally Posted by debm1 

An idea... maybe make a list of ingredients, and your friend could go shopping, and buy all the ingredients, and drop them off at your house. That way, they bought their own ingredients, and you get to enjoy using your decorating skills. Just a thought...

 

good idea!

 

wow

 

hey debm1 but aren't you the one who has that delicious stunning thick juicy beautiful marble slab top table from heaven? i love your setup!!!

(there was another shop listed in that thread--but i think it was you?)

 

wow i'm so sorry that happened

 

i wonder if the other cakers got the warning or the fine?

 

and thank you jennifer for that necessary and good cautionary statement about detailing our individual cities

 

what's allowed at the state level is not the final answer by any means! yes we gotta know our local rules and we gotta point each other there--it's not oh your state blablabla--no it's go call your local places, all of 'em, health, agriculture, zoning, fire marshall, code enforcement, licensing, whosoever--l.o.c.a.l!

 

this thread in no way is about empowering anyone in particular it is that very narrow focus as has been stated

 

that hobby bakers can according to the irs receive money for their wares

 

and all that to say hooray and thank you to kikiandkyle--but of course it's like a super low volume like one or two a quarter or less

 

and it is also good that this opens up finance talk to hobby cakers who once in a blue moon need pricing assistance--they can be informed of what it would really cost and can pass it on instead of stumbling in the dark--no of course i don't think they will all charge the right amount but  they will feel free to ask and find out the straight story--gently i hope ;)

 

and we can certainly terrorize them with what can happen if they do too much or if they do it in harveys lake pa & wherever else it's not allowed

 

rahr icon_biggrin.gif

-K8memphis Posted 1 Mar 2013 , 9:27pm
post #70 of 81
Quote:
Originally Posted by kikiandkyle 

My advice was from the Lake County IL Dept of Health. 

 

Encounters like the one Deb had are exactly why I wanted to check.

 

 and what did it cost you--a phone call!!! easy peasy

 

awesome!!!

kikiandkyle Posted 1 Mar 2013 , 9:33pm
post #71 of 81

thumbs_up.gif

-K8memphis Posted 1 Mar 2013 , 9:37pm
post #72 of 81

and remember as jenmat i think it was stated upthread--hobby bakers have zero clout

 

if you are working with someone who's being difficult it's like you've been dipped in simple syrup and blanketed by a gnat cloud

 

so once in a rare blue moon and only for happy people and call the local authorities first and put it on you income taxes and come and ask about pricing

debm1 Posted 2 Mar 2013 , 3:08am
post #73 of 81

K8memphis, unfortunately, I don't have the mouth-watering marble counters. I'm the other one. The fine was only if I sold a cake after signing the papers. And it was a PER cake fine, if the Dept. of Ag. caught me selling cakes. Honestly, I was freaked when I got the call, but the inspector put me at ease. He said that because I had been accused of running a bakery, he had to investigate... and there were multiple people accused, all by the same bakery. Since I already had my approval from the township, water test, septic OK'd, and was already talking with the Dept. of Ag., there was no problem. I would imagine the others got the cease and desist letter to sign, and either opened a business or closed up shop... or maybe they were AOK and just showcasing their cakes on facebook like so many people do. In fact, the day he came to investigate, I was working on 2 cakes: my brother and sister-in-law's anniversary cake, and a birthday cake for my son to give his girlfriend.

 

Like many cakers, I have baked for family, gifts, church events, and some friends in the past. How else do we all get hooked with the love of cake design? When I asked the inspector, "What about doing the work for free, and just getting paid for ingredients", he said "I don't even want to hear about that."

You can be sure that if I am already booked with an order and have to turn down a cake, I won't be suggesting that the customer go to a CERTAIN local bakery. icon_biggrin.gif 

jason_kraft Posted 2 Mar 2013 , 4:05am
post #74 of 81

A

Original message sent by debm1

You can be sure that if I am already booked with an order and have to turn down a cake, I won't be suggesting that the customer go to a CERTAIN local bakery. [B]:D  [/B]

You may not realize it yet, but that bakery did you a favor by weeding out your unlicensed competition for you. As you've seen, there is no impact to bakers who are following the rules (if you already had your license there probably wouldn't have even been a visit from the inspector), and even the unlicensed bakers are not fined or arrested, they are simply told to cease and desist.

I'm sure you can see why contacting a potential competitor directly and telling them to cease and desist is less effective and more problematic than an official message from the local regulatory agency.

debm1 Posted 2 Mar 2013 , 4:22am
post #75 of 81
Quote:
Originally Posted by jason_kraft 


You may not realize it yet, but that bakery did you a favor by weeding out your unlicensed competition for you.

I had not thought of it that way. You have a point there. Now, my biggest hurdle is pricing. Sculpting from modeling chocolate (etc.) can take so much time. Before it was a business, the time was not as important. Now it's not a gift, it's a sale. I keep finding that I underprice...not the ingredients. That's the easy part. It's the ART that's hard to calculate. Thanks for your input, Jason. I have read many of your posts. This whole site has been so much help... and inspiration!

-K8memphis Posted 2 Mar 2013 , 4:42am
post #76 of 81

marble top tables are nice but having a nice cozy legal business is pretty sweet!!

 

best of the best to you1

debm1 Posted 2 Mar 2013 , 4:54am
post #77 of 81

thumbs_up.gifLoving it!

-K8memphis Posted 9 Mar 2013 , 12:49am
post #78 of 81

as a matter of fact--regarding all the other government agencies needing to agree with the irs assessment

 

(that hobbyists can make some money and not be a business)

 

in my county if you make less than $3000 a year you do not need a business license

 

i'm not saying the state & local tax peeps & (for baking) the health dept won't getcha but i'm just saying

 

that could be interpreted as in my county you're not considered a business (not a license worthy business) if you don't exceed $3000 a year

 

i doubt that that's unique to shelby county tn--may not be true everywhere but interesting huh

jason_kraft Posted 9 Mar 2013 , 1:19am
post #79 of 81

A

Original message sent by -K8memphis

as a matter of fact--regarding all the other government agencies needing to agree with the irs assessment

(that hobbyists [I]can[/I] make [I]some[/I] money and [I]not[/I] be a business)

in my county if you make less than $3000 a year you do not need a business license

i'm not saying the state & local tax peeps & (for baking) the health dept won't getcha but i'm just saying

It's not uncommon for cities or counties to exempt businesses grossing under a very low threshold from getting a business license. However getting a business license is probably one of the easiest steps in the process, and the criteria used (gross sales) is different from the criteria used by the IRS (profitability over time) and health depts (interaction with the public).

For example, if you operate a very small scale business in Shelby County TN, gross $2500/year, make a profit every year, and advertise to the general public, you would be considered a business by the IRS (which is what you want) and by the health dept (which is more of a headache) even though no business license would be required.

-K8memphis Posted 9 Mar 2013 , 1:33am
post #80 of 81

i'm just saying there's wiggle room to not be a business and make small potatoes randomly

 

still be aboveboard and declare everything to every agency that requires it

 

but advertising & stuff--that's for businesses

Annabakescakes Posted 9 Mar 2013 , 2:03am
post #81 of 81

beating a dead horse

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