Calling Va "legal" Home-Based Bakers

Business By formerbuckeye Updated 2 Jun 2013 , 8:58pm by fishykat6

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Jessica1817 Posted 10 Oct 2007 , 3:56am
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I was just inspected early Aug in Virginia Beach and it was SOO much easier than I had stressed myself out to be! He was at my house maybe 30 minutes--reviewed my paperwork with me, opened the oven, looked in every cabinet with a flashlight, checked the bathroom, checked for running cold and hot water, asked how I sanitized, made sure ingredients were kept separate in the fridge (mine are in a rubbermade basket), and that all equipment/ingredients were kept separate in my cabinet/pantry. Of course, I tried to make sure everything was spotless, but he never saw that the bottom of my trash can was scrubbed or that my blinds had been washed! Good luck and let us know how it goes--you'll do great and will be so excited when its all done thumbs_up.gif

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imanah Posted 10 Oct 2007 , 4:19am
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Good luck with your inspection

Just make sure

1. Your supplies are seperate & labeled away from your home stuff. For certain drawers in my kitchen I took a peice of scotch tape and wrote over it with my business name.

2. Make sure you have the chlorine strips that can be purchased at a restaurant supply store.

3. I also marked my sink at the three gallon mark so I know how much sanitizer I need to add. (They like organization and thinking ahead)

4. Nothing on floor in pantry

5. Probe thermometer that can hold temperature. i.e. when making merengue buttercream

hmmmmmm...trying to think

6. Non latex gloves...just in case

7. Keep your hair back if it is long, better yet up. I'm sure they would mention it should be tied back if you are working.

8. MOST IMPORTANT RELAX!!!! YOU MADE IT THIS FAR CONGRATS!!!!!

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sassycleo Posted 10 Oct 2007 , 3:47pm
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WooooHooooooo Ok so happy here, I passed, I passed, I passed *does the happy dance*. Ok so now I just have to go get the business license. My inspector was WAY nice. He actually made a comment to me that he'd never seen a packet come to him as complete as mine was and that he was impressed. He went over the info with me and did a quick (and I do mean QUick) check of the kitchen. He said he was impressed with how I had everything, and impressed with the organization. At one point I actually felt he was talking because he had to stretch out the time ...lol

Thanks for all of your support and suggestions, it really does mean a great deal to me!

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terrig007 Posted 13 Oct 2007 , 9:49pm
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I was glad to see this! We will be moving in December to Manassas (probably or Fairfax) and have just received my packet today. We are planning on looking for a house with a walkout basement with a separate entrance for my kitchen. But is it possible to do this out of your regular kitchen and did you need professional equipment. Also, do you have to type out every recipe and what if it includes alcohol how do you store it? The reason I'm asking is that I have a couple of recipes with cheesecake filling and amaretto alcohol in it. thanks,
terri

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Jessica1817 Posted 14 Oct 2007 , 1:57am
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In VA you can do it out of your household kitchen as long as your supplies are kept separate. I have separate shelves in my pantry for pans and utensils and a separate cabinet for ingredients. In my fridge I have a plastic basket to keep the milk, eggs, butter, etc, kept separate from household items. Not sure about storing cheesecakes, but I keep my completed cakes in cake boxes on my dining room table adjacent to my kitchen, and the inspector said that was fine. You do have to type out recipes, along with directions and ingredient labels. The paperwork took the longest, but the inspection was pretty easy. Good luck!!!

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terrig007 Posted 14 Oct 2007 , 12:30pm
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Thank you Jessica! icon_smile.gif Your info helped a lot because the paperwork I received yesterday was a bit confusing regarding whether or not you needed a separate kitchen & entrance. I have started typing the recipes and directions, guess you have to do it for every cake so that will keep me busy for awhile. Have a great day & thank you again!

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sassycleo Posted 15 Oct 2007 , 11:03pm
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The packet they send you for Virginia is very lacking in it's direction. I have learned from experience that before you can get your business license you have to pass your inspection. I would think it would be the other way around but it's not. Once you have your packet you will need to type out every single recipe. For me it was a lot of work because I have 21 different types of cakes I offer. You need to type out recipes for each and every filling even if you use your icing as a filling it's got to have it's own recipe and then repeat for your icings. You will need to provide a detailed list of where you buy all of your supplies. You also have to weigh out everything and I do mean everything. You need to provide your measurements for every single recipe. Provide ounces and then grams. This information has to be on your labels. Yes you have to do labels and the inspector and I discussed it it's not required however he HIGHLY suggested that a note be put on the label for allergins such milk, egg, wheat and if you use cake release soy.

Your also going to have to sit down and think about how you work in the kitchen. You have to provide a detailed work flow from raw product to the finished and then how it is stored and given to the customer. It is a long process paperwork wise I personally thought I might never finish up. I just recently went through my inspection so it's freshly in my mind if you have any questions feel free to send me a message.

Alicia

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jenbakescakes Posted 27 Oct 2007 , 12:54am
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About the labels, I talked to a man that works in the weights and measures dept. and he told me because I do "contract sales", meaning a customer comes to me and I do a cake especially for them, I don't need to worry about listing the weight on the label. If however, I sold my cakes at like a farmers market or a local store, I would have to do it.

Also, I was wondering what your process is for sanitizing in a two basin sink? Just want to make sure all my ducks are in a row! I submitted my packet and am waiting for the inspector to call. I think I am stressing myself out more than I need to for this inspection. From the way you all talk, it doesn't sound that bad! Did they watch you bake anything, or just checked around and made sure everything looked ok?

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jenbakescakes Posted 27 Oct 2007 , 1:38am
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Also, does anyone know if in VA we have to collect sales tax? I have read on here in other states they have to collect sales tax on cake orders and then remit to the state either every quarter or month.

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sassycleo Posted 28 Oct 2007 , 3:35pm
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Jen - According to the inspector from the dept of agriculture the weight is a requirement on the label. they are the people who pass or fail you and if they want it on there then so be it is my attitude - it really isn't a hard thing to do.

Yes in the state of Virginia, food is taxed. There for if you go for you business license and you are a legit business you must charge sales tax. i told the girl i didn't want to and was told I had to. Virginia taxes food at 2.5%

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CoutureCakeCreations Posted 7 May 2008 , 7:29pm
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OK All YOU CENTRAL VIRGINIANS

I have taken the initiative to start a cake club in the Central Virginia Area. It is still in its initial stages. I wanted to come to CC to see if there may be any interested parties.

The cake club will be called Confectionary Artist of Central Virginia.

Purpose: Confectionary Artist of Central Virginia is a nonprofit organization which brings together people interested in the art of cake decorating and related fields for the exchange of information and ideas. The club will actively promote the hobby through the sponsoring of cake shows and demonstrations.

I am already in communication with Kim Morrision of PA. She has agreed to come to Virginia and teach a class on Stringwork.
These types of classes will be offered exclusively to club members in good standing. Dues will be $30 per year. Each meeting will have a cost of $2 for members and $4 for non members.
Should you have any questions, you may pm me or email me at [email protected]

Thanks,

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costumeczar Posted 7 May 2008 , 11:55pm
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We've tried to do a couple of different cake clubs and they never seem to get off the ground because of scheduling conflicts, but keep us posted.

I've never had any inspector say anything about labelling, and I've been in business in Richmond for 10 years. I think the PP who said that you only need to label for resale is right. If you have to label everything with the weights of your ingredients on it then you'll also be giving away your recipes, which you label "trade secret" when you turn them in. In my experience, when it comes to what information they tell you that you'll need, it depends on which inspector you get. I only do wedding cakes, though, so I don't label anything.

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GateauGirl Posted 12 Jun 2008 , 1:32am
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As for the cake club, count me in! I'll email you separately, Melissa. Thanks!

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costumeczar Posted 12 Jun 2008 , 1:46am
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Here's an update on the labelling thing---I spoke to someone in the Agriculture Dept and she said that if your'e the person who baked the cake and you're delivering and setting it up, then there's an exemption for the labelling and you don't have to do it. She said that it's good idea to write down any allergens that are in the cakes and give it to someone at the reception site to cover yourself, but it isn't required AS LONG AS you're the one doing the deliveries. I had my annual inspection yesterday, and the inspector said that the time that problems arise with this is if people have other people delivering things for them, and the people delivering can't answer questions about the ingredients. So as long as you're the only person who's handling the merchandise, you don't HAVE to label, but it doesn't hurt to list allergens just to alert people if they choose to check. That's more a liability thing to cover yourself as well.

If, however, you're selling packaged goods to wholesalers or at farmer's markets or anywhere like that, you have to do food labels. That will cover any questions about ingredients that you wouldn't be there to answer.

I wanted to add that I have the specific names of people at the Department of Agr. who can answer questions, but I don't want to just post them here. If you want to pm me I can give you the inspector's email...He said to feel free to tell people to email him if they had questions. (Poor guy, I don't think he knew what he was in for! icon_twisted.gif )

Another thing that he told me is that in a few months Virginia is going to go to the voluntary inspection system, where you don't need to get an inspection, but if you choose not to you have to clearly state to your customers and put on your products that it comes from a non-inspected kitchen. Personally, I think that's a really bad idea because who knows what conditions people will be cooking in if they're not inspected (the inspector wasn't too happy about it either.) He told me the story of a woman who had to have four samples taken until there was no dog hair found in her baked goods icon_eek.gif, so without inspections she'd still be selling that fur! I figure that it's good for advertising for those of us who have been inspected, that we can say that we've been approved and inspected. It's such an easy process I don't see why you wouldn't have the inspection done...Anyway, we'll be getting letters about that in the next month or so, so keep an eye out for them.

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cohen1 Posted 12 Jun 2008 , 2:12am
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saving

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maude Posted 21 Jun 2008 , 1:11am
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I would be interested in the cake club also. Formerbuckeye I am also a neighbor of yours, Petersburg, I am interested in getting home inspection as well but haven't taken any action yet. I just recently got back into cake decorating and trying to learn the new techniques.

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jenbakescakes Posted 15 Jul 2008 , 8:21pm
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I just got off the phone from the Va Dept of Tax and they said that I am supposed to be charging 5% Sales Tax because I am considered a caterer. Even though I'm not and I only do cakes, the state still classifies me as a caterer. So for anyone out there figuring their tax at 2.5%, apparently that is wrong! Luckily I found out now that I only had 2 orders and not in 6 months when I've had a lot more.

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costumeczar Posted 15 Jul 2008 , 8:48pm
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I was just about to post this, too...It's 5%, not 2.5% for prepared foods. The 2.5% came a few years ago when they were reducing the sales tax rates for certain things, but prepared foods are still taxed at the 5%. If you buy the ingredients you pay 2.5%, but we have to charge our customers 5% when we collect the tax from them. When you pay your sales tax you fill out the form that asks if you had any food sales, and that should be 0 because our product isn't the raw ingredients, so technically doesn't fall under the food category rate.

They do give you a 2.5% discount (dealer's discount) that reduces the amount that you pay to the state to pay you back for the sales tax that you paid for the raw ingredients, but I'll bet it still ends up in the state's favor somehow!

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Jessica1817 Posted 16 Jul 2008 , 2:25am
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Okay, I went round and round with them about this last summer. They finally concluded (several phone calls later) that because I am a home baker for cakes, not preparing foods on site, that I am not considered a caterer and thus qualifying for the 2 1/2 %. This is what I have been filing, and haven't heard otherwise (including 2007 tax return). I have the guy's name I spoke to around here, but I am definitely going to call and double check--I'd hate to be audited and have been wrong all this time icon_cry.gif

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giraffe11 Posted 16 Jul 2008 , 3:04am
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I think this is just another example of failings in the bureacracy of the state (and I work for the state of VA, so I guess I can complain about the inadequacies! icon_wink.gif ) I think they told you incorrectly though, b/c as it has been explained to me many times....... prepared food and convenience food is sold with the 5% tax....even if you don't prepare it on site. Raw and unprepared foods from the grocery are taxed at 2.5%
This makes some sense, really. Often a caterer doesn't prepare any of their food onsite either. For example, we have a woman that prepares all of our lunch meeting food (sandwiches, usually) at her home (often including cakes and cookies, for that matter) and then drops it all off to us in the lobby. We take it upstairs and set it out and serve it ourselves, so really she hasn't done anything more than make it ahead of time, at her home, and then come drop it off.....same as you or I would do with a cake or dessert. Yet we are taxed at the 5% prepared food rate......actually the 9 1/2% prepared food rate that is the current rate in Richmond City.
Actually, one gruff state employee told me "If the bakery is charging 9 1/2% tax on a wedding cake that they make, what makes you think your wedding cake would be taxed any differently?" Hmmmm.......
Clearly there is a lot of confusion among the state employees that are supposed to know the rules, as they are all telling all of us different things.
I guess I would just keep the date and name of the person you talked to, so that at least you have some documentation to offer if they ever try to question what you are doing.
Be careful though and don't assume that acceptance of your tax return is a guarantee of being "correct". The state charged me an extra $270.00 in taxes this year, because of an accidental computing error on my 2003 taxes that they just got around to finding.......
Good luck to everyone trying to figure this out!
Heather

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jenbakescakes Posted 16 Jul 2008 , 2:30pm
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I was on the phone with the Dept of Tax for literally one hour and 90% of that time was on hold because the person was checking out what rate I was actually supposed to be at. So yes, they need to make things a little better explained. I also asked about whether or not I can be considered tax exempt for my ingredients so they are not taxed twice and she said yes, so I will definately get that rolling! And finally I asked about deposits, whether you have to count them in the month you got them or the month when you receive the final payment. She said you count it in the month of the final payment. I know this doesn't have anything to do with what we're talking about but figured it might help someone who is unsure like I was! thumbs_up.gif

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costumeczar Posted 16 Jul 2008 , 2:47pm
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Ai-yi-yi...I'm not sure that's right about the deposits, that would be an IRS question. I'm going to ask my accountant friend if she knows the answer tonight and I'll post what she says.

And the tax rate is 5%, I remember when they were changing the food sales tax rate and it was very explicit that prepared foods and catering would still be 5%, but they were decreasing the tax on raw ingredients. I remember the discussion because I was mad that I'd still be taxed at the higher rate! icon_mad.gif

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costumeczar Posted 16 Jul 2008 , 2:59pm
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Okay, IRS publication 538 says that if you use the cash method of accounting you have to report income when it's made available to you, so I assume that means that deposits count as income when you receive them. Go to www.irs.gov and go the the small business section, or directly to publication 538. There are different rules for different accounting methods, but I've always used cash because I have no inventory. Maybe it depends on whether the deposit is non-refundable or not, too! I'll ask my friend tonight, she has no idea what's in store for her, hee hee!

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costumeczar Posted 16 Jul 2008 , 11:22pm
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Okay...My accountant friend said that if you use the cash method of accounting, you count deposits in the month that you receive them, just like any other form of income. If the money is availble to you and in your possession, then it's income for when you received it. The balances would be in the month that you receive those. She mentioned something about the accrual system being similar for the deposits, but I didn't get into that with her.

She did say that the most important thing for the IRS is that once you choose a system for your accounting, you should stick with it year to year. They don't like it when you change systems without a reason for changing. I use the cash method because I don't have inventory, and it's easier to deal with in general.

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jenbakescakes Posted 17 Jul 2008 , 1:37am
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Thanks costumeczar! Between all of us we might get this figured out eventually! Nice how when we do get it down pat we will know more than 90% of the people that work for the state! icon_rolleyes.gif

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sassycleo Posted 21 Jul 2008 , 6:54pm
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Ok according to the tax sight in regards to the sales and use tax here is the following information. It can be read literally either way. We are Bakeries not Caterers for the simple fact that VA doesn't allow licensing of home caterer's.

Retailer Classifications

The reduced sales tax rate will apply to foods that are deemed eligible under the federal food stamp definition without regard to the nature of the retailer making the sale of the food or whether the retailer participates in the federal food stamp program administered by the USDA.

Generally, the following retailers should charge the reduced sales tax rate on sales of eligible food and beverages: bakeries, cafes, cafeterias, convenience stores, delicatessens, department stores, diners, doughnut and pastry shops, drug and sundry stores, farmer's markets, grocery stores, ice cream shops, lunch counters, mail order companies, supermarkets, sandwich shops, snack bars, specialty meat and produce stores, video stores, and weight reduction establishments.

Exceptions

Some vendors are presumed sellers of food for immediate consumption and may not impose the reduced sales tax rate on sales of eligible foods. These include caterers, concession vendors, entertainment facilities (theme parks, sports arenas, stadiums), fair and carnival vendors, gift shops, hamburger and hot dogs stands, honor snack vendors, ice cream stands and trucks, mobile food vendors, movie theaters, newsstands, and vending machine vendors.


So because this has come up, I called the Dept of Taxation to find out what the deal was. If I remember correctly on my business license I'm listed as a Home Bakery. She said it's all up to the individual interpretation of the person who would be doing the audit (if you were to be audited). She said what I should do is write in and request a ruling to get some clarification. They will decide at that point if it is the 2.5% or 5%. She said she could understand why we would get the impression it is supposed to be done at 2.5% according to this Bulletin.

I'm going to request a ruling. She said it's going to take them some time because they are going to have to do some research. But I would like to know officially what I am supposed to be charging. Right now I've only done the 2.5% because I'm a bakery, not a caterer.

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costumeczar Posted 21 Jul 2008 , 7:08pm
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My business license says "reatil cakes," not home bakery. Maybe it's up to the person who fills them out to decide what random assignment to give you! icon_wink.gif

I'd still charge the 5% unless you can get something in writing, because if you're delivering a cake that's intended to be eaten then, I'd assume that it would fall under the "immediate comsumption" exception. I'm also paranoid that I'm going to get audited, so I'd rather charge the 5% now and not get slammed in case the person who ends up auditing me decides that I've been doing it wrong!

I suspect that the bakery listing in the list of reduced rate venues was because grocery stores with bakeries lobbied for the reduced rate on their bakery products along with the reduced rate for the rest of their food items. I'd guess that if you don't have a storefront they'll end up saying that we're producing "immediate consumption" foods.

However, if you get something in writing that says otherwise let me know so that I can get a copy!

On an aside, I once called them to ask if I should be charging a sales tax on delivery fees, and their answer was that it was "up to me." icon_confused.gificon_confused.gif Since when does the state leave anything left up to us? I charge tax on everything just to cover my own butt!

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sassycleo Posted 21 Jul 2008 , 7:15pm
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Yeah you bring up a good point on the delivery fee issue. I was wondering the same thing. That is a real gray area. Guess next time I get pizza delivered I'll check and see if the tax is on the price or price with delivery .. icon_smile.gif

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GateauGirl Posted 21 Jul 2008 , 7:58pm
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Wondering just how long it's supposed to take to get your health inspection packet in the mail here in central VA...Costumeczar, I am trying to figure out how to pm you to ask for the email of the inspector you mentioned, but for the life of me I can't see how to pm on this site!! Can anyone help?

I'm kind of impatient for the packet since I called & spoke to someone in the Dept. of Ag. a week ago, then called back when I didn't receive a packet about 4 days later, and they put me in touch with a different rep who said it wasn't "a high priority" for her to send out packets but that she'd do it when she got around to it. So beware, those of you who call and speak with a person named Emma at the Dept. of Ag! I called right back & asked to speak to another person who told me she'd send a packet to me "right away". Mail within Richmond should take about 2 days tops, and it has now been 2 and I still have no packet.

Did anyone else have trouble just getting this info in the mail??? I am about to drive down there and speak to someone personally. Do they want us not to be legal or what??

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sassycleo Posted 21 Jul 2008 , 8:04pm
post #60 of 87

ok RELAX

Emma is actually really nice. It takes a little while for the packets to get sent out as well as for them to receive them once you send them back.

They are not in Richmond so it is longer then a day or so especially with snail mail. Everything is done through the office so unfortunately the inspector isn't going to drop by with the packet.

Give it another day or so and if you don't see it just call them again and tell them you need a packet sent out to you.

Relax you've got time icon_smile.gif It's going to take you a bit of time to go through the whole thing and gather all the info they want so be forwarned...lol

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