Sales tax guides for food businesses
Plain-language answers for caterers, personal chefs, bakers, and meal-prep businesses. Not tax advice; your state's Department of Revenue and your accountant are the final word.
Start here: the three-part invoice series
- How to Show Sales Tax on a Catering Invoice with a Deposit and a Service Charge
On a catering invoice, three line types follow three different tax rules in most states: the food and goods are taxable; a mandatory service charge is…
- Catering in One City, Serving in Another: Which Sales Tax Rate Goes on the Invoice
In most states, the sales tax rate on a catering invoice follows the event, where the food is served, not the kitchen where you cooked it. Roughly 37 states…
- The Event Address, the Billing Address, and the Kitchen: What Actually Sets a Caterer's Sales Tax Rate
A catering job involves up to three addresses, your kitchen, the client's billing address, and the event venue, and in most states only one of them sets the…
The questions every food business hits
- Are Meal-Prep Meals Taxable? The Prepared-Food Question for Meal-Prep Businesses.
In most states, yes. Meals your business cooked and assembled are usually taxable "prepared food" even when they leave your kitchen cold, because the most…
- Can Cottage Food Be Sold Wholesale? In Most States, No. Here Are the Exceptions.
In most states, no. Cottage food laws are direct-to-consumer laws: you may sell to the person who will eat the food, and you may not sell to a shop, cafe, or…
- Do Personal Chefs Charge Sales Tax? The Question With No Settled Answer, State by State.
There is no settled national answer, and anyone who gives you one without naming your state is guessing. Whether a personal chef charges sales tax depends on…
- Is a Mandatory Service Charge Taxable? What Caterers and Chefs Get Wrong About Tips
In most states, a voluntary tip is not subject to sales tax and a mandatory service charge is. The word on the invoice does not decide it; who controls the…
- Does Itemizing Labor and Delivery Separately Change What Is Taxable?
Sometimes. In some states, separately stating a charge on the invoice genuinely changes whether it is taxed: certain separately stated services and delivery…
- I Never Collected Sales Tax. Do I Owe It Out of Pocket, and How Far Back Can They Look?
If sales tax was due on your sales and you did not collect it, the debt is yours, not your customers': states hold the seller responsible for the tax whether…
- Why the Same Cookies Are Taxed Differently: The Utensil and On-Premises Rules, State by State
In many states, bakery items are exempt from sales tax as grocery-type food, until something about how you sell them flips the exemption. The flip is usually…
- Sales Tax Is Not Income Tax: What a Food Business Files, to Whom, and When
Sales tax and income tax are two different taxes, owed to different governments, on different amounts, on different schedules. Sales tax is a state and local…
State by state: cottage food and catering
- Do I Charge Sales Tax on Cottage Food or Catering in California?
California cottage food operations come in two classes. Class A sells directly to consumers only. Class B can also sell indirectly, through permitted…
- Do I Charge Sales Tax on Cottage Food or Catering in Colorado?
Colorado's Department of Revenue lists "food purchased for human consumption at home" among the purchases exempt from state sales tax, while candy and soft…
- Do I Charge Sales Tax on Cottage Food or Catering in Florida?
A Florida baker on CakeCentral put the confusion perfectly: "if I buy baked goods to go at Panera's there is not tax, if I get them to eat there, I pay…
- Do I Charge Sales Tax on Cottage Food or Catering in Missouri?
Missouri's cottage law (RSMo 196.298) lets home producers sell baked goods, jams, jellies, and dried herbs directly to consumers, with no permit, no…
- Do I Charge Sales Tax on Cottage Food or Catering in New York?
New York's cottage food program runs through the Department of Agriculture and Markets as the Home Processor registration: shelf-stable items like breads…
- Do I Charge Sales Tax on Cottage Food or Catering in Pennsylvania?
Pennsylvania's food rule turns on what kind of seller you are. An "eating establishment" is a business that "advertises or holds itself out to the public as…
- Do I Charge Sales Tax on Cottage Food or Catering in Texas?
Texas defines bakery items broadly: "bread, rolls, buns, biscuits, bagels, croissants, pastries, doughnuts, Danish pastries, cakes, tortes, pies, tarts…
- Do I Charge Sales Tax on Cottage Food or Catering in Washington?
Washington's cottage food law (RCW 69.22) requires a permit from the state Department of Agriculture, including an application and a kitchen inspection…
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