Cottage food laws let you make and sell certain low-risk, shelf-stable foods from your home kitchen without renting a commercial space or holding a full food manufacturer’s license. Every state and the District of Columbia has some version of these laws, and the details vary a lot from one state to the next. The rules cover what you can sell, where you can sell it, how much you can earn in a year, and what your label has to say. Get those details right before your first sale, because small violations can end your operation.
What You Can and Can’t Sell
The core idea is the same in every state: you can sell foods that don’t need refrigeration to stay safe. Regulators call these “non-potentially hazardous” or “non-time/temperature control for safety” foods. In practice that means baked goods like cookies, breads, and muffins, along with dry goods like granola, roasted nuts, candy, fruit jams, honey, and dried herbs. The thread running through the list is low moisture, often paired with high sugar or high acid, which keeps bacteria, yeast, and mold from growing.1Food and Drug Administration. Water Activity (aw) in Foods
Acidified foods like pickles, salsas, and hot sauces sit in a gray area. Many states ban them from cottage food operations entirely because getting the pH wrong can be deadly.2Food and Drug Administration. Guide to Inspections of Low Acid Canned Food 2 States that do allow them often require lab testing of each recipe or a process authority review.
Products that need refrigeration are off-limits everywhere. Cheesecakes, custard pies, cream-filled pastries, raw milk, fresh meat, and anything with significant protein and moisture create ideal conditions for rapid bacterial growth. Some states also restrict cream cheese frosting, cut fresh fruit, or anything containing cannabis or alcohol. Each state publishes a specific list of allowed and prohibited items, and that list is the final word for your kitchen.
Where You Can Sell and How Much You Can Earn
Most cottage food laws require direct-to-consumer sales. Farmers’ markets, roadside stands, craft fairs, and personal delivery to someone who placed an order are the standard channels. Some states also allow online ordering as long as you hand-deliver or the buyer picks up in person. Selling through a third party like a restaurant, grocery store, or coffee shop is prohibited in many states, though a growing number allow limited wholesale under a higher-tier permit with extra requirements.
Almost every state sets an annual revenue cap, and the range is enormous. Some states cap you as low as a few thousand dollars per year, while others allow up to $250,000 in annual gross sales. A handful have eliminated caps entirely. The trend has been upward: Texas raised its cap to $150,000 and Nevada moved to $100,000. If you hit your state’s ceiling, you’ll need to move into a licensed commercial kitchen to keep growing.
One hard boundary applies everywhere: cottage food laws are state laws, and they don’t protect you across state lines. Selling into another state triggers federal interstate commerce oversight, and the FDA requires a manufactured food establishment license for products in interstate commerce, which cannot be issued for a domestic kitchen. If you sell online, keep your customers within your own state and make sure your delivery method doesn’t cross a state border.
What Your Label Must Say
Federal food labeling law and your state’s cottage food statute both shape the label. At minimum, every product needs the common name of the food, a full ingredient list in descending order by weight, the producer’s name and address, and the net weight or volume.3Office of the Law Revision Counsel. 21 USC 343 – Misbranded Food Most states also require the date the product was made and a lot number or batch identifier for traceability.
Allergen Declarations
Federal law requires you to clearly identify any of the nine major food allergens present in your product: milk, eggs, fish, shellfish, tree nuts, peanuts, wheat, soybeans, and sesame, which was added by the FASTER Act effective January 1, 2023.4FoodSafety.gov. The Food Allergy Safety, Treatment, Education, and Research Act of 2021 You can declare them either with a “Contains:” statement right after the ingredient list or by naming the allergen source in parentheses within the ingredient list.5Food and Drug Administration. Food Allergen Labeling and Consumer Protection Act of 2004 This isn’t optional, and an allergic reaction from mislabeled food is one of the fastest routes to a lawsuit.
The Home Kitchen Disclaimer
Every state requires some form of disclaimer telling the buyer the food was made in a home kitchen that hasn’t been inspected by a health department. The wording varies. Some states require a short phrase like “Made in a Home Kitchen” in a specified font size; others require longer statements explaining the product isn’t subject to routine inspection. Whatever your state requires, it must appear prominently on the primary label, not in fine print on the back.
Nutrition Facts Panels
Most home producers don’t need a Nutrition Facts panel. Under federal regulations, businesses with fewer than 100 full-time equivalent employees that sell fewer than 100,000 units of a given product per year qualify for a small business exemption, and businesses with fewer than 10 employees selling fewer than 10,000 units per year don’t even need to file a notice with the FDA to claim it.6eCFR. 21 CFR 101.9 – Nutrition Labeling of Food Virtually every home operation falls well within these thresholds. If you voluntarily include nutrition information, it has to be accurate and follow the standard format.
Registering Your Operation
The registration process ranges from minimal paperwork to a multi-step application, depending on your state. Some states use a self-certification model where you fill out a form and start selling. Others require a food handler’s certificate, a completed food safety course, recipe review for each product, sample labels, and a description of your kitchen setup. A few states require well water testing if your home isn’t on a municipal supply.
Fees range from nothing to a few hundred dollars for an annual registration. Applications typically go to your local or county health department, though some states run the program through the state department of agriculture. Processing times run from immediate approval to several weeks.
Most states explicitly exempt cottage food kitchens from routine health department inspections, and that exemption is a big part of what makes these laws workable for small producers. States generally reserve the right to inspect if a consumer complaint or foodborne illness investigation triggers one. Some also require that pets stay out of the kitchen during production and that food-contact surfaces be in good condition. Once issued, your registration number or permit usually has to be displayed at your point of sale or on your labeling.
Insurance Your Homeowners Policy Won’t Cover
This is where cottage food producers often get blindsided. Your homeowners or renters insurance almost certainly excludes business activities. Standard policies contain specific exclusions for commercial use of the home, and an insurer can deny a claim for property damage, personal injury, or liability tied to your food business. Even a small kitchen fire during a production batch could produce a denied claim if the insurer determines the loss arose from commercial activity.
Product liability is the bigger exposure. A single allergic reaction or foodborne illness claim can generate tens of thousands of dollars in legal costs even if you win, and cross-contamination errors on allergen-free orders carry especially high stakes. Most cottage food laws don’t require insurance for direct-to-consumer sales, but many farmers’ markets require vendors to show proof of at least $1 million in general liability coverage. A dedicated product liability policy for a home food operation typically runs a few hundred dollars per year.
Talk to your homeowners insurance agent before your first sale. Some insurers offer a home business endorsement that extends limited coverage, though those endorsements often have low limits and may specifically exclude food production. A standalone commercial general liability policy with product liability and “completed operations” coverage, which protects you after the food leaves your kitchen, is the more reliable option.
Taxes on Cottage Food Income
Cottage food income is taxable. The IRS treats the operation as self-employment income, reported on Schedule C of your federal return.7Internal Revenue Service. Instructions for Schedule C (Form 1040) If your net earnings exceed $400 in a year, you also owe self-employment tax at 15.3%, covering Social Security and Medicare.8Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes) That threshold is low enough that most producers who work even a few farmers’ markets per season will cross it.
You can deduct legitimate business expenses against your revenue. Ingredients, packaging, labels, booth fees, mileage to and from sales events, and food safety course costs all count. You can also claim a deduction for business use of your home kitchen. The simplified method lets you deduct $5 per square foot of space used regularly and exclusively for the business, up to 300 square feet.7Internal Revenue Service. Instructions for Schedule C (Form 1040) Keep receipts. A shoebox of farmers’ market cash with no paper trail is an audit problem waiting to happen, and clean records also tell you whether the operation is actually profitable after expenses.
You may also need to collect state or local sales tax. Some states exempt cottage food products; others treat them like any retail food sale. Check with your state’s department of revenue before your first sale.
Mistakes That Shut Operations Down
The most common violation is selling a product that isn’t on your state’s approved list. Producers who experiment sometimes drift into prohibited categories without realizing it. Adding cream cheese frosting to a cupcake, for example, can push a legal baked good into the “requires refrigeration” category. Check your state’s list before adding anything new to your lineup.
Exceeding the annual revenue cap is the second most common problem, and it tends to catch successful sellers who don’t track their running total. Once you cross the threshold, your cottage food exemption no longer applies, and every sale after that point is technically unlicensed food production. Enforcement varies by state and can include cease-and-desist orders, fines, and revocation of your registration.
Shipping across state lines, selling through unauthorized channels, and missing required label elements round out the list. None of these are hard to avoid once you’ve read your state’s specific rules. Most state agriculture departments publish plain-language guides that walk through every requirement step by step, and starting there is the surest way to keep a home food business on the right side of the law.