Taxes for home food production?

Mark Stambler, Home Food Act activist, said taxation goes against Food Act.

Mark Stambler, Home Food Act activist, said taxation goes against Food Act.

Legalized at last – those who want to make food in their home kitchens and sell it. That’s what the new Cottage Food Act did for Californians this year, but now some interested in home food sales face the possibility of being taxed like a business.

Inyo Assessor Tom Lanshaw said, “My job is to discover all business personal property that is taxable.” That news raised the question of the Southern Inyo Hospital parcel tax – at least $500 per year plus Inyo County Business Property Tax. Suddenly, the prospect of home food sales did not look so good to some.

Mark Stambler, cottage food activist said of the possible taxation, “I think that goes against the interest of the Cottage Food Act. It was envisioned as a way to lower the barriers to the food industry.” Stambler said the idea was to “keep all permit fees and assessments at the lowest possible level so anyone could use the act to enhance their economic standing.”

In hard times, legislators reasoned that the Food Act would give a lot of people a way to supplement their income. Stambler said, “We never thought this would cost more than $100 to get involved.” Stambler, who is a well-known home-bread baker in Los Angeles, said the whole idea was for people to get started on a small scale and then once successful, start a commercial business.

Inyo County Assessor Lanshaw said he has until January 1 of 2014 to figure out what to do about taxes. He said he has not heard anything about ignoring the Cottage Food enterprises. Said Lanshaw, “If you’re in business, you’re in business.” Declaring the Home Food people official businesses will also put them on the tax roll, and that’s why Southern Inyo people might face the hospital tax. Lanshaw said his office does assess other home businesses like cosmetic sales.

Lanshaw did say it’s up to Southern Inyo Hospital what they do about taxing the Cottage Food Industry. Some citizens, interested in home food sales, went to the Hospital Board and asked not to be taxed. Citizens say there were 100 people at Cottage Food Act workshops and many who want to get going but taxes may prohibit them.

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36 Responses to Taxes for home food production?

  1. Alisha McMurtrie April 5, 2013 at 2:47 pm #

    You need to understand that this parcel tax is a voter approved Measure, approved by over a 2/3 majority of the District’s votes as required. The Measure was simply written and in the voter pamphlet. It clearly stated a $500.00 parcel tax on every parcel where a commercial business is located, commercial business is conducted or commercial improvements are located. In the Measure, Commercial business is defined as every business, trade, profession, calling, occupation, vocation, exhibition, show and enterprise of every kind. The County’s role in this Measure is the collection of the imposed charge by the Hospital District in conjunction with the collection of all other property taxes. The Assessor is the resource for property information. The Auditor-Controller receives the levy from the District and enrolls it, my office bills and collects it. The Auditor-Controller’s office then distributes the funds back to the District. We have no legal authority other than these processes associated with this Measure. There are many home-based businesses who have been paying this tax since it passed. So many have commented, not in this thread, on how voter approved taxes are not used for what they were intended for. In this case, the content of the Measure was clear, but now there is a call for discretionary application. If you want the parameters of the Measure altered there is a legal way to accomplish that, you just need to follow that path. Also, remain aware that so many laws come on the books from the Feds and the State that are not clearly defined and while their intent was noble, the execution may not be so easy.

    • Outsider April 5, 2013 at 6:40 pm #

      “You need to understand”??? How condescending.

    • Jane April 8, 2013 at 1:03 pm #

      The Content of the state mandated Cottage Food Act is also clear, and it runs contrary to what you state is the intent of the hospital tax.

      • Alisha McMurtrie April 11, 2013 at 3:51 pm #

        It is the fact that it is contrary that is the underlying source of the issue. The Act does not cancel or modify all other previously approved taxes. Which goes back to determining what is the legal process to make any changes if that is what the residents of the District want. Also, be aware there is a financial burden to those actions. Not only to a struggling hospital district, but there is a cost to placing a Measure on the ballot.

        Outsider, please accept my apologies, you are correct, no one is required to understand the legal processes.

  2. ferdinand lopez April 5, 2013 at 1:37 pm #

    congratulations,don.keep your fingers crossed and your health insurance paid

  3. Jane April 5, 2013 at 10:48 am #

    Southern Inyo County desperately needs economic development. It seems to me that both the Assessor and the Southern Inyo Hospital Board should do everything within their power to support microenterprise initiatives, as they could lead to actual businesses that would pay business taxes and business parcel taxes, once they become viable. Assessing a business parcel tax on these residences would squelch these types of initiatives altogether, acting not only against the the Cottage Food Act, but also against the bigger picture economic interests of our County and the Hospital.

  4. Don April 4, 2013 at 8:20 pm #

    To Ferdinand,
    I have gone to many Senior and Historical Society pot luck lunches and dinners over the years and have never been disappointed… These pot lucks were cooked by friends within their homes and so far it as always been a wonderful dinning experience… Don…

  5. Just be fair April 4, 2013 at 5:51 pm #

    When the voters passed the So. Inyo Hospital tax, the law didn’t say that they would tax home based business at the same rate as standing/Main Street business. We all have to pay this fee/tax on our parcels and every home on the property. For most this is $150. Had I known that the So. Inyo Hospital Board was going to find a loop hole to charge home based internet business, makeup consultants (Avon and Mary Kay), food sellers etc. the $500 business fee/tax I would not have voted to help the hospital. It is hard enough to start a small business with all the fees, licenses, recordings and Board of Equalizations cost without the added burden of the So. Inyo Hospital fee.

    • Trouble April 4, 2013 at 9:35 pm #

      Wow, I missed the part about the extra $500 bucks.Sorry. Maybe the hospital should or could agree to a small percentage instead. At least for the first few years????

  6. Trouble April 4, 2013 at 2:22 pm #

    After thinking about this , I think every one should have to pay taxes. Is it really fair to the mom and pop stores to have to compete with people that don’t? Besides there are good tax right offs for new businesses.

    • Bonnie April 5, 2013 at 12:13 pm #

      It’s unfortunate that no is mentioning that Cottage Food producers in California have an income limit on what they are allowed to earn. Are there any other small businesses that have an income cap? I sure haven’t heard of any.

      So even if they are taxed, it certainly should not be at the same rate as other businesses.

      • Reality Check April 6, 2013 at 11:05 am #

        The income cap is to make sure that Big Brother gets their cut!

        Spread the wealth.

  7. ferdinand lopez April 4, 2013 at 1:12 pm #

    i wouldnt buy or eat anything made in someones house,garage,backyard,whatever, do they have cats and dogs?roaches,do they have a clean environment to produce these products?thanks,but no thanks

    • Benett Kessler April 4, 2013 at 1:20 pm #

      FYI from Sustainable Economics Law Center: It depends on whether you will conduct direct or indirect sales for the most part. Cottage food operations with a Class A permit that conduct direct sales only (see “Do I have to get a permit from the health department?” for more info) will not have their kitchens inspected unless their local health department has a specific reason to suspect that their cottage food operation is violating the law. Cottage food operations with a Class B permit that conduct sales indirectly (and can also conduct direct sales) will have their kitchens inspected annually. This is why the Class B permit is more expensive. As with Class A, Class B Cottage Food Operations may need to have a kitchen inspection if the local department of environmental health has a specific reason to suspect a violation of law has occurred, in addition to the routine annual inspection.


    • Big AL April 4, 2013 at 9:01 pm #

      Yeah I hear ya … sometimes you wonder .. about the environment that people are working in .. when they produce stuff out of their house, but then it is like anything else .. even restaurants, some are good, some are bad with regard to cleanliness.

      But, they … the restaurants are regulated, even though the regulation fails at times. The counties could not even begin to keep up with regulating and over seeing home producers, I feel.

  8. Ken Warner April 4, 2013 at 8:42 am #

    …and not one word of concern about the food produced in “homes”. I’ve visited some homes that I would not even want to sit down in let alone eat in. Yet anyone can produce food and sell it out of the trunk of his car.

    I don’t know… I don’t even like to eat in restaurants. Perhaps I’m over cautious.

    • Mark April 4, 2013 at 12:16 pm #

      I can see this as a boon to the illegals. I would never by anthing from a street vendor of this type.

  9. Trouble April 4, 2013 at 7:21 am #

    I am a little confused here. I had great a great tax return when I started my own company. I was also working a full time job at the time.

    • Desert Tortoise April 5, 2013 at 12:51 pm #

      You need to hire a new accountant then. The wonders of accounting never fail to amaze me Tax law strongly favor those who own businesses..

  10. sierragrl April 3, 2013 at 6:27 pm #

    Interesting, a parcel tax implies a tax related to real estate. How can a business be considered a parcel? If he is referring to the home they live in and use for the business, that would appear to be double taxation…if they’re already paying the $500 parcel tax, why would they have to pay it twice for the same property?

  11. Tired of Taxes April 3, 2013 at 2:28 pm #

    No good deed goes unpunished in Inyo County.

    • Angry Boomers abound April 3, 2013 at 3:45 pm #

      I’ve always worked hard, paid my bills, given to charitable causes and beggars on the street, put money away for a rainy day … and have no problem whatsoever paying my taxes.

      Apparently, there are those who thought they could get by on social security, realize they cannot, and are today mad at the world and those like me.

      • Big AL April 3, 2013 at 6:36 pm #

        Yeah Dr. I hear ya .. but that is only a fraction of the baby boomers, I am at the tale end of the boomer span. I am not angry at the world or people like you, yes apparently there are those who are, and for some .. yes they are. Takes all kinds though.

        I think for the most part, it isn’t really hate or anything as much as it is frustration that some feel .. at some things or .. a lot of things, who knows?

        I feel bad for those who didn’t plan, and I have been told I shouldn’t be, they made their own nest and didn’t feather it well enough, but I do.

        And yeah some have thought social security would get them by, and some didn’t act when the first warnings came out about the failings of the system from being over used and not having some pay into it, they should have took steps to help themselves, feather the nest a lil bit, and for some, well they just couldn’t do it, because they were not making enough to have extra to put away.

        Even though my dad always told me .. pay yourself first! .. then pay everything else, even if it was $20.00. Some have a hard time doing that, and then sometimes stuff (life) happens, and you lose the nest egg and the feathering. All kinds of places people are at in this equation.

        But I have something that will make you laugh, totally unrelated. Today I was up to Bridgeport for work, coming back, I saw that the last house on the creek (coming south)in the lil canyon just north of the Bodie road, that was for sale, had a (sale pending panel) on the real estate sign.

        LOL as I went by, the gate had a (Rush Limbaugh pl.) street name sign on it, hehe I thought of you, next time you’re going by, you can discreetly remove for them .. hehe. They obviously are misguided.

        • Big AL April 3, 2013 at 7:05 pm #

          I’ve always paid my taxes as well, I might be annoyed at some of it, i understand you have to have taxes to pay for stuff that the government provides.

          I get that, but as I said I get annoyed by how .. such as in this case. They allow something, for people to try to supplement taxes, so they say with that cover story.

          It sounds real good and philanthropic, but then .. here comes the tax on it, not just a sales tax on items produced and sold, but I tax to do business, and possibly, a licensing fee as well?

          It reminds me of the old Les Emmerson song “Signs” … signs signs .. everywhere are signs .. do this, don’t do that, .. their cluttering up my mind …

          It is getting to be that way with taxes .. but then .. we have to pay for the monster budget that our govt. can not seem to control even in the slightest.

          So where’s the answer? stop taxes, stop paying taxes, stop bring up new taxes for everything under the sun?

          Stop spending, stop services, limit services, limit spending even?

          So I would say, somewhere in the second category, of spending, and .. somewhere in the first category of taxes, seems legit.

          We can’t do away with taxes, and choose not to pay taxes, that is just isn’t an option, especially if the govt. is going to spend it like there’s not tomorrow.

          We all have some responsibility in this big messed up sack of junk.

        • Boomers and public prayer April 3, 2013 at 8:38 pm #

        • How the right impresses April 4, 2013 at 5:40 am #


      • Desert Tortoise April 3, 2013 at 7:50 pm #

        Angry, taxes are for someone else to pay. You know, the “other guy”. Keep that straight and everything will be fine around here.

      • upthecreek April 3, 2013 at 9:07 pm #

        shut up and pay your taxes like GOOD SHEEPLE…

      • Angry Boomer April 4, 2013 at 10:28 am #

        I admit to being an angry boomer, I’ll explain why I’m angry too. You see it was always my dream to retire in Mammoth and things were moving along just fine until the MLLA lawsuit began to fester and the stop the bleeding measures to the tune of 50 million plus was settled on. The powers to be decided to settle the debt on the backs of public workers via cuts in services.

        I was privy to the fact that the wages and benefits of town employees were more than then the new town leaders would like to pay in this down economic environment. Dave W. never saw it coming until he stated some opposition to the plan to far along in the process and the ax fell is what I was told.

        When you’ve paid under the table low wages to undereducated or third world workers for so long, everyone becomes disposable. The plan was hatched to cut the higher paid employees off the town payroll and bring lower waged no benefit temporary workers as replacements. Some politicians and their lackeys went as far as posting as alias on this blog disparaging public safety employee wages and retirement benefits to spin their agendas.

        The big revenue generator in town is the TOT, they began an enforcement program by the town mostly against second home owners from what I’ve seen. I know of locals, friends of politician and a politician that have illegally rented and never remitted a dime in TOT. To now sit in judgement on the appeals of TOT violators as a member of the town council is as hypocritical as one can get.

        Speaking of single family rentals, I don’t have a dog in this fight.I have suggested it be placed on the ballot, only be told that second home owners wouldn’t have a vote. I reminded the councilman in question they never had a say in any of the tax measures either. I only now that this one town council man is extremely interested in renting his upside down house. I urged him to be upfront and honest with all involved and let the chips fall where they may. To deal with facts, his honest motives in a transparent manner. Instead of coming clean we had to listen to the sob story of the more appeals for illegal rentals coming before council instead of his real motive that probably has quite a bit of support from some other second home owners like himself. Playing politics covertly with peoples quality of life issues may be the way to make a profit, but it’s no way to run a government by the people and for the people.

        The next canard is the need to subsidize air and marketing services with additional taxes. Everyone knows the politicians were led down the path to purchase and development at the airport by MMSA interest. The mountain started the subsidizes and is slowly passing this and the marketing cost over to the taxpayers with the help of this town council. They come up with a business embezzlement district to raise both sales taxes and tot taxes on the paying public. Here my problem with that, I have been privy to the fact that some businesses underreport their gross sales, payroll taxes and even beat the landlord out of some of his net based rent. This BED TAX is just another avenue for embezzlement by some of the same people who are imposing the tax on us. I am not about to let a business I’ve known to have used illegal methods of collecting and not remitting taxes pocket another tax dollar off of me or anyone else for that matter. None of you will be getting any of my business if there is a viable alternative, everyone I know will know the score too.

        This hasn’t been my experience with the entire business community in general, a lot of good honest people have earned my respect. It’s the handful of scoundrels that will never have enough money and keep coming up with these pathological schemes of greed that the taxpayers eventually pick up the bill. Can you say marketing, tourism transportation and airline subsidizes to name a few!

        I laugh every time I here guest experience by some of these council/ tourism people, If you treat your low wage working locals,second home owners and public employees so poorly, you don’t think that your guest will notice the fly in the ointment? I feel like I live among a den of thieves, both the old and the new breed of carpet baggers stick out like a sore thumb.s

        I sincerely hope Mr McCoy tells them to stick their street name where the sun don’t shine!

        • Big AL April 4, 2013 at 8:49 pm #

          Right on .. I totally hear ya!

      • Mark April 4, 2013 at 12:15 pm #

        We all can’t work in the public sector. Who would pay the taxes that would employ everyone in the public sector?

        Keep bragging and some angry boomer just might take their anger out on you.

        If you’ve got it good I suggest enjoying it and keeping it to yourself. Talk like yours in a bar would lead to a fat lip.

        • sierragrl April 4, 2013 at 8:23 pm #

          why would boomers be angry? they’ve had the best lives timing wise of any generation in american history! Easy to find jobs and cheap real estate that escalated unbelievably. It’s a close second for the generation before them. They started out with really rough lives, but have had the biggest jump in standard of living ever seen…compare that with gen x’s and whatever they’re calling the ones behind them who’ve actually had a lower standard of living then the previous two generations…an angry boomer equals a loser…..anyone who couldn’t make it in the boomer gen wasn’t trying!!!

          • Desert Tortoise April 5, 2013 at 12:48 pm #

            Point well taken. What bugs me is that too many boomers, not all certainly, but a proportion, seem to begrudge any success by the succeeding generations. Seeing as how their comfort in old age hinges on the economic success of the up and coming generations, one would think that they would be expecially attentive to the educational excellence and financial success of the generation who’s taxes will finance their old age. Instead too many boomers seem intent on leaving scorched earth behind them.

        • Big AL April 4, 2013 at 8:56 pm #

          So Mark .. you think people who work in public sector don’t pay taxes? That’s what I thought?

          Truth there, there as a***oles in every run …. A run being a chain rail being kinked because the cross bar connecter was crimped on the wrong side of the link.

          His views speak truth, he did not claim everyone in the business community to be that way, but there are those who try to do people for every cent they can … we see it all the time!

          Usually those that squall about it when someone points it out wrongs such as this… are some who are in the thick of it.

          • Mark April 5, 2013 at 8:10 am #

            Big Al – The problem with everyone working in the public sector is their employer doesn’t pay any taxes.


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