You can sell cookies from your home in all 50 states and Washington, D.C. under what are commonly called cottage food laws.1Association of State and Territorial Health Officials. Do Cottage Foods Really Come from a Cottage? These laws let you bake in your regular home kitchen and sell to the public without renting a commercial space, as long as you stay inside a set of limits on what you make, how you label it, where you sell, and how much you earn. The specifics vary by state, and a few of the rules trip up nearly every new baker.
Which Cookies You Can Legally Sell
Cottage food laws only cover foods that don’t need refrigeration to stay safe. The FDA draws that line at a water activity of 0.85 or lower, a level at which harmful bacteria can’t grow at room temperature.2Food and Drug Administration. Water Activity (aw) in Foods Most traditional cookies clear that bar easily thanks to their high sugar and low moisture content.
Chocolate chip, sugar cookies, shortbread, snickerdoodles, biscotti, and gingerbread are fair game in virtually every state. What causes problems is anything that spoils without refrigeration: custard fillings, cream cheese frosting, whipped cream, or fresh fruit toppings. Recipes calling for those ingredients push you into commercial-kitchen territory. Butter baked into the cookie is fine. Royal icing and sprinkles are fine.
One ingredient is off-limits everywhere regardless of your state’s rules: CBD. Federal law prohibits adding CBD or THC to any food product, and the FDA has not approved an exception for baked goods.3Food and Drug Administration. FDA Regulation of Cannabis and Cannabis-Derived Products, Including Cannabidiol (CBD) Legal hemp does not mean legal hemp-derived edibles.
Permits, Training, and Registration
What you need before your first sale depends heavily on where you live. Some states have no registration requirement at all. Kansas and a handful of others require no permit, license, or training. Other states ask you to fill out a simple online form with the state department of agriculture or the local health department. A few require an in-person home inspection before you can start selling.
Where a fee applies, expect anywhere from nothing to about $150 annually. Some states set a single statewide fee; others let county health departments set their own, so the cost can vary within one state. Renewal usually means resubmitting your application and any required documentation.
Many states also require a basic food handler’s certificate. That typically means a short online course covering safe food temperatures and cross-contamination, with costs from under $10 to more than $100 depending on the provider. Your state’s department of agriculture or department of health website will spell out what applies to you.
Where inspections happen, inspectors look for basic sanitation: a clean workspace, proper handwashing setup, and no pets in the food-prep area while you’re baking. It’s a far lighter check than a restaurant would face.
How to Label Your Cookies
Every package you sell needs a label, and the requirements are more specific than most new bakers expect. Wording varies by state, but the core elements are consistent across cottage food programs:
- The product name, such as “Chocolate Chip Cookies.”
- An ingredient list, in order from most to least by weight.
- An allergen disclosure covering any of the nine major allergens: milk, eggs, fish, shellfish, tree nuts, peanuts, wheat, soybeans, and sesame. Sesame became the ninth major allergen in January 2023 under the FASTER Act and is the one home bakers most often overlook.4Office of the Law Revision Counsel. 21 USC 343 – Misbranded Food5Food and Drug Administration. The FASTER Act – Sesame Is the Ninth Major Food Allergen
- A home-kitchen disclaimer stating the product was made in a kitchen not inspected by a health department. The exact phrasing your state requires may differ.
- Your name and home address as the operator.
- The net weight or volume.
Read your own ingredient list carefully. Butter is milk. Flour is wheat. Tahini is sesame. List every allergen clearly, either in a “Contains” statement after the ingredient list or in parentheses inside it. Getting allergen labeling wrong is the fastest way to hurt a customer and create real legal exposure.
You generally don’t need a Nutrition Facts panel. Federal regulations exempt food sold by businesses with annual gross sales under $500,000 that make no nutrition claims on the label, and nearly every cottage food operation falls under that threshold.6eCFR. 21 CFR 101.9 – Nutrition Labeling of Food
Where You Can Sell
Cottage food laws limit your sales channels. Approved venues typically include farmers’ markets, bake sales, craft fairs, and direct sales from your home. Some states also allow delivery to a customer’s home inside the state, and a growing number permit online or phone orders followed by pickup or local delivery.
Selling across state lines is off-limits. The moment your cookies cross a state border, they fall under federal food safety regulations overseen by the FDA, and cottage food exemptions don’t apply at the federal level.7Food and Drug Administration. How to Start a Food Business8Association of State and Territorial Health Officials. Health Agencies Keeping Cottage Foods Safe
Wholesale is also restricted in most states. You generally cannot sell to grocery stores, restaurants, or other retailers for resale. The whole framework is built around direct sales where the buyer knows they’re buying a home-kitchen product.
Revenue Caps
Many states cap what you can earn from cottage food sales in a year. The floor sits around $5,000 to $10,000 in a few states, while others allow up to $150,000 in annual gross sales. Over a dozen states impose no cap at all. If you exceed your state’s limit, you’ll typically need to move into a licensed commercial kitchen to keep operating.
The cap almost always applies to gross revenue, not profit. Ingredient costs, packaging, and other expenses don’t reduce the number that counts. Track sales carefully throughout the year, and if you’re approaching the cap, plan the commercial kitchen transition before you hit it rather than after.
Taxes You’ll Owe
A cottage food permit doesn’t exempt you from taxes. The IRS treats cookie income as self-employment income, reported on Schedule C of your personal return.9Internal Revenue Service. About Schedule C (Form 1040), Profit or Loss from Business If your net profit exceeds $400 in a year, you also owe self-employment tax, which covers Social Security and Medicare at a combined 15.3%.10Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes) That surprises many new home bakers because there’s no employer paying half.
Sales tax is a separate question and depends on your state. Some states exempt cottage foods, some require you to collect and remit, and a few have no sales tax at all. Contact your state’s department of revenue before you start selling. Back taxes and penalties can easily exceed what you earned.
Insurance You Probably Don’t Have
Your homeowners or renters policy almost certainly won’t cover a claim tied to your cookie business. Standard residential policies contain a business pursuits exclusion that voids coverage for injuries or property damage arising from any activity you do for profit. If a customer has an allergic reaction or claims food poisoning, your personal policy will likely deny the claim.
Product liability insurance built for cottage food operations fills that gap, covering legal defense and settlements. Policies for small home food businesses start around $25 to $30 per month. Some farmers’ markets require proof of liability coverage before they’ll assign you a table, so it may not really be optional.
Zoning, HOA, and Lease Rules
A state cottage food permit doesn’t override local rules or private agreements. Local zoning ordinances may require a separate home occupation permit, sometimes involving notice to neighbors or limits on signage and customer traffic. Check with your city or county before you invest in packaging.
If you live in an HOA neighborhood, read your CC&Rs. Many HOAs prohibit home-based businesses, particularly those that generate foot traffic or deliveries. Violations can bring fines or liens, and your state permit won’t override a private covenant you agreed to when you bought the home.
Renters face the same issue in a different form. Your lease may restrict commercial activity, and a landlord’s written permission is often required before a city will issue a home occupation permit. A short conversation and a lease review before you buy supplies can save you an expensive surprise.