David Crabill
@david
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Yes, you just report it on your quarterly estimated and yearly taxes.
How do they know if you go over? They probably won’t. But, once you go over, you’re no longer operating legally, so if you got sued, you wouldn’t have any legal ground to stand on. The laws are there to protect you — once you leave their umbrella, you’re no longer covered.
Glad to hear your business is going well! And don’t worry about sending more questions.
Thanks so much for the info about that phone number now being invalid! I’ll remove it.
The list of requirements you’d need to go through sounds about right. For a tiny business, it’s not really worth it. The statement that most home food businesses don’t operate under the law also sounds right. And considering that you’re not willing to operate illegally, I think your solution is a great one!
Although direct sales only require a Class A registration, that assumes that the direct sales will not occur in a retail facility, from what I’ve gathered. I guess the first question you need to address is whether your store is allowed to sell food items? There are specific requirements of what and how a retail facility may sell food, and you’ll need to speak directly to your health dept to learn about those requirements. In the end, you may need to get a Class B permit to allow the store to sell your CFO products — even though you own it.
For a business this unique, you really need to speak with the health dept directly. Although there’s no substitute for that, I will clarify that the cottage food law in CA only allows dry coffee beans, not prepared coffee as you’re suggesting. The cottage food law also only allows your products to be made in your home kitchen, and nowhere else. For those reasons, you definitely wouldn’t fall under the CA cottage food law.
This sounds more like a mobile food unit. It’s probably doable, but I’m not sure what you need to do.
The regular cottage food law, which only allows sales at farmers markets, probably is allowed in Cook County. The law for home kitchen operations, which allows sales from home, probably isn’t. I don’t know for sure, and you will need to call their health dept.
The $5,000 limit only pertains to those operating under the cottage food law (only making at home and selling at events/farmers markets). If you’re not using that law, then you need to get a commercial license and use a commercial kitchen, and you will need to go through the setup process with the health dept before you do any sales. http://forrager.com/faq/#commercial
You will need to use a commercial kitchen to start your business. http://forrager.com/faq/#commercial
Sales tax and yearly income tax are entirely separate. Sales tax greatly depends on where you live and what the requirements are for your city, county, and the state of Florida. Everyone has to pay income tax, regardless of how much it is. If you make enough, you’ll need to pay estimated taxes throughout the year, similar to a self-employed independent contractor.
I’m pretty sure the statement has to be on the primary label. Only certain items, like ingredients, can go on the secondary label based on federal regulations. You should call your health dept and see what they’ll allow you to do.
By definition, a business intends to make a profit. That’s why the IRS will classify you as a hobby if you take a loss for too many years in a row. It is for that reason that I don’t think your gifts or donations could be deducted as a “loss” for your business. If you take the sales you’ve made and deduct the variable expenses for ingredients/packaging, are you still operating at a loss? Only those sales/products constitute your business, and you can deduct large equipment expenses over time. In most places, to be operating as any kind of business requires you to get a business license, regardless of whether there is a need to collect sales tax.
By the way, I know that there are ways for businesses to make charitable donations and take deductions on their taxes from those — so your donations wouldn’t be out of the equation in your business — but I’m totally ignorant about how that all works.
It’s good to hear that the person thought you needed an inspection. I’ve been picking up pieces about VA from various people. I think that home food production used to be allowed before the cottage food law came into play, and although those rules still are used, depts may not be familiar with the new law that introduces many more restrictions, but requires less/no interaction with them to start a business.
Did you contact Heath Gerber at the ag dept (he’s listed on the law page here). If he doesn’t know about the cottage food law, then I’d really like to know that!
