The North Carolina Department of Revenue announced that, effective January 1, 2009, there will be a new exemption from State sales and use tax for bakery items which are sold without eating utensils by an artisan bakery. These items include buns, rolls, biscuits, bagels, bread, pastries, tarts, tortillas, cookies, donuts, Danish, cakes, croissants, tortes, pies, and muffins. Eating utensils include napkins, plates, knives, spoons, napkins, cups, and straws. The bakery items will still be subject to the 2% local rate of tax imposed on qualifying food products. North Carolina statute exempts sales of food from the State sales and use tax except for the following: dietary supplements, vending machine food, prepared food, soft drinks, and candy. These particular items are subject to the general State and applicable local rates. An “artisan bakery” is one that derives over eighty percent of its gross receipts from the sale of bakery items and its annual gross receipts, combined with the gross receipts of all related persons, do not exceed $1,800,000. (Important Notice: Sales of Baked Goods by Artisan Bakeries, North Caroline Department of Revenue, November 2008)