Sales Tax: Do You Have to Collect It?

Sales tax rules for baked goods are state-specific and surprisingly varied. Many states exempt most baked goods sold directly to consumers — but “most” is not “all,” and exemptions depend on the type of product and how it’s sold.

How to find out:

1. Go to your state’s department of revenue or taxation website
2. Search for “food sales tax” or “baked goods sales tax exemption”
3. Look specifically for how your state treats cottage food / home-produced baked goods sold direct to consumer
4. If unclear, call the department of revenue directly and ask

If your state requires you to collect sales tax, you need to:

• Register for a Sales Tax Permit (free in most states) before you collect your first dollar
• Collect the correct rate at the point of sale
• File and remit sales tax returns on the schedule your state requires (monthly, quarterly, or annually)

Note your state’s rules in Tab 6 of your binder and check annually — these rules change.

DUNS Number: Build Business Credit Before You Need It

A DUNS (Data Universal Numbering System) number is a free identifier issued by Dun & Bradstreet, the leading business credit bureau. It’s how your business builds a credit history separate from your personal credit score.

Why this matters: when you apply for a business credit card, a business loan, or a line of credit — lenders and suppliers check your business credit score, not just your personal one. Starting that history early means it’s there when you need it.

How to get one:

• Go to dnb.com and search “Get a D-U-N-S Number”
• The process is free. D&B may try to upsell you on paid services — you don’t need them
• Allow 30 days for processing — apply before you need it

Business Credit Card Strategy

After your business bank account has been open for 90+ days, apply for a business credit card. Use it for all business purchases and pay it in full every month. This builds your business credit profile, earns rewards or cash back, and creates another clean separation of business expenses.

Starting options:

• Chase Ink Business Cash — no annual fee, cash back on business purchases
• American Express Blue Business Cash — 2% cash back, no annual fee
• Capital One Spark Cash Select — 1.5% unlimited cash back, no annual fee

Do not carry a balance. The interest eliminates any benefit from rewards.