Ohio Bakers, I Found Something Useful!!
Business By Mandica12182 Updated 7 May 2008 , 2:59am by MichelleM77
Anyone in Ohio that has questions or concerns regarding cottage food laws...I found a link to a PDF file that has all the info on it.
I found it very useful and thought maybe someone else would too...I plan on having a copy of this in my portfolio so that I can prove that I am "Legally" selling my product if someone where to actually ask!
It also tells you what your label needs to say.
http://www.ohioagriculture.gov/pubs/divs/food/curr/hcomm/documents/cottagefoodoperation-factsheet12-12-05UPDATE_000.pdf
Thanks Mandica12182 for sharing this. I wondering if you or anyone else knows the difference between a tax ID and business ID number? Since, I am currently thinking about operating as sole proprietorship with no employees, the Ohio Dept. of Taxation told me I would not need a tax id or vendor number. The reason is that in Ohio we do not pay taxes on food. However, I was wondering what would I use if I wanted to buy wholesale goods, for instance from ck products or other places that ask for âTax number/Vendor licenseâ?
If you want to buy from a place like that hten, yes you'd have to be licensed and inspected as a business...it sucks!!
I am going to file for a tax id # I think...I know I will have to file my income and expenses at the end of the year anyways sooo...might as well make it legit!!
Thanks soooo much for that clarification! Another question, if I reserve a business name with the Sec. of State will I still be able to operate under the cottage operation law or will I have to get licensed and inspected? I am not sure about that one...there is a lady on here that is very saavy of the rules in OHIO...can't remember her name now. Maybe she'll read this!!
Just an FYI,
Ohio doesn't charge tax on food, put you must collect tax on delivery fees, rental fees, if you sell a monagram that's not edible (crystal monagrams) ect. Also, the tax you collect needs to be for the county that you deliver your cake to. It sucks, but it's the law. Last Ohio sales tax I had to send in was for $1.74!!!! and the stamp was 41 cents!
HTH
For once I can help someone with a question! Yaaay!
DMCCLEND, you should still register your name with the secretary of state's office. One way or another you will be asked if you are registered with the SOS. Often times, having your name registered is the beginning step of becoming "legitimate". It also protects you from having someone else register or use your name or a name too similar.
One prob with tax id or vendors license, I got one to begin with and then the state was sending me a "bill" for the amount of tax money they thought I owed them!!! It took a few phone calls but I actually talked to a nice guy at the dept of taxation and explained my situation, he then explained that I didn't need any thing but my SS#, cancelled my vendors license and then cancelled out my tax bill for me.
Everytime I've filed taxes I just added my sales on a schedule C and itemized my deductions only using my SS#
Barb
Thanks MrsSid for the great advice!
CherryLane and Barbaranoel so how do you collect tax on delivery charges and for other non-edible items that we may place on a cake for example, like the plastic figurines for kidsâ cakes without a tax Id? How often do you have to send taxes to the government? Or is all the taxes that we should have collected figured out at the end of the year and put on the Schedule C since I do not have a Id?
Thanks,
Danyelle
I charge the costomer the tax and every six monthi I have to send it in. I do have a tax ID and they send me the forms to fill out and return with the tax I have collected.
I am licened and inspected home baker, not just a Cottage bakery, but it's my understanding that the goverment still wants their money and you should still be collecting the tax.
HTH
alright i'm not sure if i'm just not understanding, but if you ARE a cottage food production, do you need to contact anyone? does anyone need to come out to your home? it seems like no one needs to but i just want to make sure i'm not wrong...
Under the cottage rule you do not need to be inspected. However, you can not sell anything that needs to be refigerated. Such as cheesecakes, whip cream iceing, etc.
Once you go one step further and become a licened home bakery you can now sell things that do need to be refigerated. Cheesecakes etc.
HTH
Thanks Mandica12182 for sharing this. I wondering if you or anyone else knows the difference between a tax ID and business ID number? Since, I am currently thinking about operating as sole proprietorship with no employees, the Ohio Dept. of Taxation told me I would not need a tax id or vendor number. The reason is that in Ohio we do not pay taxes on food. However, I was wondering what would I use if I wanted to buy wholesale goods, for instance from ck products or other places that ask for âTax number/Vendor licenseâ?
I am a licensed home baker and am able to buy from CK because I have filed with the Federal Dept of Taxation and have been supplied an EIN # This is a number that works for me IN PLACE OF my SS#. This helps to keep my business and personal finances seperated. I do not collect tax on any of the items, so I don't need a vendor's license. I sell and I file Federal and State at the end of the year with my hubby with a Schedule C for my business- which you HAVE to HAVE to file federal taxes if you are a legit business. I am also an LLC (single owner is how I think they officially label it).
OH...and Mandica...I think that BlakesCakes (more affectionately referred to as Ramona or Rae from the greater Cleveland area) is the expert in Ohio rules and regs....I call her the great Schwami!!!!
I wanted to add that my inspector says that (contratry to the website) I DO NOT have to label my cakes because I personally am handing off the item to the end buyer. It is at this time they can ask me and I can tell them a complete list of ingredients contained within the cake. However, if you are selling to a middle man (ie the corner grocery store), they would have to be labeled because it would be in a self serve area and no one would be around (or knowlegeable enough) to know its contents.
"I wanted to add that my inspector says that (contratry to the website) I DO NOT have to label my cakes because I personally am handing off the item to the end buyer. It is at this time they can ask me and I can tell them a complete list of ingredients contained within the cake. However, if you are selling to a middle man (ie the corner grocery store), they would have to be labeled because it would be in a self serve area and no one would be around (or knowlegeable enough) to know its contents."
This is also what my inspector told me. If I am personnally handing it to them I do not need to do the label.
Wow, good info about the not labeling!! That's great!!
I knew about filing the schedule C at the end if the year, I am keeping all my receipts when I buy anything cake related...and keeping all my invoices to show my income. Is there anything else I need to have to file my taxes??
Your mileage to buy your supplies, deliver cakes etc. It's 50.5 cents per mile for 2009!
msauer,
your info was great! if i may ask, exactly how did you go about contacting the federal govt for your EIN number? also, you mentioned filing a schedule C with your husband. i want to be clear, so both my husband and i file jointly. IF i want to include my cake profit, i simply attach a schedule C and list my profit and expenses? is that how i keep my personal and my business separate even though we file jointly? i'm so afraid of messing up, getting audited, going to jail...sigh...
My BIL who is a CPA (and former tax attorney) keeps me kinda straight on this stuff, so this is what I did:
Go to www.irs.gov
At the top of the page click on the link (second in from left) named "BUSINESSES".
This will bring up a list of options for you. You can read through the details on "STARTING A BUSINESS" or go straight to the link for "EMPLOYER ID #'S". That will take you to the next page that has a list in the middle of the page to "apply for an EIN on line". You fill out the form on line, print a page out and then mail it in to the IRS with the fee to Philadelphia. PA
As far as your questions on your schedule "C", you are correct. Your hubby has a W-2 to show how his money is earned. The schedule C takes the place of a W-2 for you. You will be required to provide your EIN# on the Schedule C when filing- so yes...it will stay separate. I've done it for two years now and they haven't come after me yet!!!! (We use TaxCut program and do it ourselves, so there is very little chance of us messing up too badly 
)
Whoaaa--I officially turn in my turban as the Schwami ! 
MSauer has gone way deeper into this process than I have and she's giving good, solid advice here.
I don't go much further than declaring myself a Cottage Producer because I do all of my cakes, etc. for non-profits or donations to non-profits. I'm in the "business" of giving cakes away as long as the recipients are willing to reciprocate and give to others--a basic "pay-it-forward" chain. Can you imagine how baffled the state & Feds would be by that concept????????? The red tape would strangle a mammoth--so I stay out of the fray all together.
We're very lucky to live in OH--very few states allow home baking at all.
Keep up the good work & Happy Decorating!
The Retired Schwami,
Rae
"I wanted to add that my inspector says that (contratry to the website) I DO NOT have to label my cakes because I personally am handing off the item to the end buyer. It is at this time they can ask me and I can tell them a complete list of ingredients contained within the cake. However, if you are selling to a middle man (ie the corner grocery store), they would have to be labeled because it would be in a self serve area and no one would be around (or knowlegeable enough) to know its contents."
This is also what my inspector told me. If I am personnally handing it to them I do not need to do the label.
I got it in writing from an inspector that the above is not correct. I suggest you do the same because saying that you heard it from someone won't hold as much weight as having it in writing. It's also on the Ohio DOA website that you DO have to label under cottage laws.
According to the last page of my in home inspection report (which is signed and dated by my inspector) says:
"All self serve food products to include a label having the following information...."
I don't do self serve so he says it doesn't apply to me. I questioned my inspector about this several times because I wanted to be sure.
This is when he provided the examples (i.e.- selling to the corner market would be self serve. He went on to say that if I sell to a restaurant, I give the restaurant a list of ingredients the first time I make the product- not every single time I deliver that same cake). (Yes...I am anal and took notes!!! )
My guess is that maybe my local Dept. of Agriculture office may handle things a bit differently??? Not sure. Maybe some parts of the state are a little more strict than others?
There is also a question #48 on the survey that says "Does labeling comply with 21 CFR, Part 101?" My inspector chose the "Not observed"- so my defense would be if I'm REQUIRED TO BE LABELING, then why didn't he insist seeing an example during the inspection? Why would he have approved me on the spot if I were lacking the requirements?
I'm fairly confident that I'm covered.
msauer, you aren't following the cottage laws if your house was inspected. you follow different laws/rules and you don't have to label then. that's where the confusion came from. 
Yep, guess I was. Don't get your panties in a ruffle.
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