Oklahoma Home Bakery Act: Separating Fact from Fiction Rodney B. Holcomb Professor, Agricultural Economics Robert M. Kerr Food & Ag Products Center Oklahoma State University

The Basics, what is allowed “Prepared foods” Must be baked Can be sold from the “home food establishment” Are intended to be bakery goods such as breads, pies, scones, cookies, cakes, brownies, bagels, donuts, tortillas, muffins, tarts, granola, etc. Are not allowed to contain fresh fruit or meat No lard

Sales of “prepared foods” (or resale) can occur ONLY at the following places: On site of the “home food establishment” of where it was made Farmer’s markets If a “home food establishment” plans to sell at a farmers market, they must obtain a “Sales Tax Permit.” These are required at farmers markets. By phone or internet with delivery ONLY occurring within the state of Oklahoma Cooperatives Membership based buying clubs

Labeling Requirements Any “prepared food” sold by a “home food establishment” must have a label affixed, when possible, to the product containing the following information: Name and address of the home food establishment; Name of prepared item; The statement: “Made in a home food establishment that is not licensed by the State Department of Health” in at least a 10-point font, in a color that provides clear contrast to the background of the label. If not possible, a free-standing label can be placed by the product or on the receipt.

The Big Questions Direct Costs: Indirect Costs: Do you know your ingredients costs? And accounting for shrink/loss How are you accounting for labor costs? What about the incidental costs of production? Packaging, labels, transportation, etc. Indirect Costs: Are you accounting for fixed overhead costs? Space, utilities, equipment, depreciation, maintenance What other “business” expenses do you have? Marketing, bookkeeping, insurance, taxes, etc.

Indirect Costs: The Things Most People Forget Recordkeeping Receipts, invoices, billing, accounting Taxes Sales taxes Income taxes Marketing “Build a better mousetrap…” or “Bake a better cake…” is just NOT TRUE! Marketing costs time and money Insurance Product Liability Insurance?

For Financial Analysis… Several downloadable spreadsheet and software options available*, such as… http://moneysavingmom.com/2011/02/free-downloadable-recipe-cost-calculator-spreadsheet.html http://www.thefreshloaf.com/node/11875/recipe-pagebaker039s-percentage-spreadsheet BakeCalc (www.bakecalc.com), online calculator, invoices Cake Boss (www.cakeboss.com), $149 Internet searches, social media (e.g. Pinterest), etc. *OSU does not endorse any existing free or for-pay bakery template, nor are the examples above recommended over any other free or for-pay template or software. (Note: All links above were active when accessed on 3/20/18.)

But Remember… There’s a fine line between “business” and “hobby” The Home Bakery Act does not exempt you from liability The Home Bakery Act does not exempt you from paying sales and income taxes The Home Bakery Act licensing exemptions only apply if annual GROSS sales are LESS THAN $20,000 “The Oklahoma Department of Agriculture, Food, and Forestry may, upon a consumer complaint, request written documentation to verify the gross annual sales of a home food establishment.”

FAPC Home Baker Training Thursday, April 12 OSU-Stillwater, 120 Food & Ag Products Center Wednesday, June 13 OSU-Tulsa Conference Center, B.S. Roberts Conference Room Tuesday, June 20 OSU-OKC Student Center, Conf. Room North See http://fapc.biz/workshops/home-baker-training for details and registration.

Questions?