Cottage Foods
Cottage Foods
Cottage Foods
University of California
Cottage Foods

Miscellaneous Regulatory/Business Considerations

Miscellaneous Regulatory/Business Considerations

Business Bank Account

Despite the extra expense, it is highly recommended that you get a separate business checking account for your CFO. This will force you to separate your CFO expenses and revenues from your personal account, which will help you better assess your profitability.

Seller’s Permit

As a CFO, you will not need a State of California Seller’s Permit, because you will not be selling “tangible personal property that is ordinarily subject to sales tax”.

Sales Tax

Depending on where you sell your products, you may need to charge sales tax. Sales tax applies to food that is consumed at your facilities, or sold for consumption where admission is charged, such as at a concert or county fair.

Business Personal Property Tax

Your County Assessor may ask you to file a Business Personal Property Tax statement and pay business personal property taxes every year. The statement must list the costs of all supplies and equipment, but not your Cottage Food inventory.

LLC Tax

If your CFO is structured as an LLC, the $800 annual tax must be paid by the 4th month of starting your business. If your business is operating on a January-December calendar, the payment is due by April 15th.

Income Taxes

If your CFO is structured as a sole proprietorship or LLC, you will file your Federal income tax return for the CFO as Schedule C on your personal tax return. The net income or loss from your CFO will end up being combined with your other income to determine your tax liability.

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