I dunno, seriously there is way too much red tape with little sale operations like this and this story is an example of how stupid it has gotten. Every year my workplace has an employee craft fair where employees who make stuff on the side sell their wares. Well, the state got involved this year demanding sales tax be charged and the people selling have permits. I know its regulations but they're stupid ones. Out in my area you need a permit to do a yard sale. Back when, you wanted to do a yard sale you just did it.
Around here, a church can't even have a fundraising dinner without inspections and permits from the health department. The end result is they either don't have dinners, or they have to rent a hall that takes a few hundred dollars right off the top of what they raise.
Same thing if your organization wants to have a booth selling baked goods at a community festival. And the real kicker there is you're required to have such facilities as running water in a booth you're setting up in the middle of the street for a few hours, to sell packaged food.
A few years ago, health officials just started targeting small fundraisers in the most heavy-handed and excessive manner possible - shutting down bake sales and the like. Absolutely ridiculous.