There is no single license to sell skin care products in the United States. What you need instead is a stack: FDA facility registration and product listing under the Modernization of Cosmetics Regulation Act of 2022 (MoCRA), a general business license from your state, a sales tax permit in most states, compliant product labeling, and documented safety records before your first sale. Some sellers qualify for a small-business exemption from the FDA registration paperwork, but every other requirement still applies.
FDA Registration and Product Listing Under MoCRA
MoCRA is the closest thing to a federal license for skin care sellers. Signed into law in December 2022 with enforcement beginning July 1, 2024, it created two obligations that reach almost everyone who manufactures or processes cosmetics.1U.S. Food and Drug Administration. Deadline for Registration and Listing of Cosmetic Product Facilities and Products
Every facility that manufactures or processes cosmetics must register with the FDA through the Cosmetics Direct portal. Registrations renew every two years, and any changes to your information have to be reported within 60 days. The FDA can suspend a facility’s registration if a product manufactured there poses a serious risk of harm, and once suspended, selling anything from that facility becomes a prohibited act.2U.S. Food and Drug Administration. Registration and Listing of Cosmetic Product Facilities and Products
Each product you market must also be individually listed with the FDA, including its full ingredient list. Product listings need annual updates to stay current.1U.S. Food and Drug Administration. Deadline for Registration and Listing of Cosmetic Product Facilities and Products Electronic submission through Cosmetics Direct is strongly encouraged over paper.
The Small Business Exemption
If your average gross annual sales of cosmetic products over the previous three years fall below $1,000,000 (adjusted for inflation), you’re considered a small business and are exempt from the facility registration and product listing requirements.2U.S. Food and Drug Administration. Registration and Listing of Cosmetic Product Facilities and Products The exemption disappears, however, if you make any of these:
- Products that contact the eye’s mucous membrane (like eye cream or mascara)
- Injectable cosmetic products
- Products intended for internal use
- Products designed to change appearance for more than 24 hours where removal isn’t part of normal use
The exemption is narrow in another way: it covers registration and listing paperwork only. Small businesses still have to comply with every other MoCRA obligation, including safety substantiation, adverse event reporting, labeling, and the general prohibition on harmful or mislabeled products.
Labeling Requirements
Cosmetics sold in the United States must comply with labeling rules under both the Federal Food, Drug, and Cosmetic Act and the Fair Packaging and Labeling Act.3U.S. Food and Drug Administration. Summary of Cosmetics Labeling Requirements The front panel of your label needs the product identity (the common name of the product or a description of what it does) and the net quantity by weight or volume.
An information panel elsewhere on the label must display the name and address (city, state, and zip code) of the manufacturer or distributor. If the company on the label didn’t actually make the product, a phrase like “Distributed by” or “Manufactured for” is required.3U.S. Food and Drug Administration. Summary of Cosmetics Labeling Requirements
The ingredient list must appear conspicuously, with ingredients ordered by quantity from highest to lowest.4eCFR. 21 CFR Part 701 – Cosmetic Labeling Every ingredient needs its common English name. International INCI names can appear in parentheses (“Water (Aqua)” or “Fragrance (Parfum)”), but the English name has to come first. Latin or INCI names alone do not satisfy federal requirements.5U.S. Food and Drug Administration. Cosmetic Ingredient Names Color additives must be FDA-approved for cosmetic use and labeled accordingly.6eCFR. 21 CFR Part 70 – Color Additives
Safety Records and Adverse Event Reporting
MoCRA requires every responsible person (the manufacturer, or the company whose name appears on the label) to maintain records showing their products are safe. The FDA doesn’t mandate specific tests, but you need scientifically sound data supporting each product’s safety. Existing data from published research or ingredient suppliers can count if the methods are robust.7U.S. Food and Drug Administration. Modernization of Cosmetics Regulation Act of 2022 (MoCRA) The FDA can request access to and copy these records under certain conditions.
If a customer experiences a serious adverse event, you have 15 business days to report it to the FDA. Serious means hospitalization, persistent disability, significant disfigurement (including serious rashes, burns, or significant hair loss), a life-threatening reaction, or something requiring medical intervention to prevent those outcomes. A copy of the product label must accompany the report. If additional medical information comes in within a year of the initial report, you have another 15 business days to submit an update.8U.S. Food and Drug Administration. How to Report a Cosmetic Product Related Complaint
This applies regardless of business size. A one-person operation selling handmade serums at a farmers market carries the same reporting obligation as a multinational brand.
When Your Product Stops Being a Cosmetic
The FDA classifies skin care as cosmetics under the Federal Food, Drug, and Cosmetic Act. A cosmetic is anything applied to the body for cleansing, beautifying, or changing appearance, which covers moisturizers, cleansers, serums, and makeup. Soap is the one notable exception carved out of the definition.9Office of the Law Revision Counsel. 21 U.S. Code 321 – Definitions; Generally Cosmetics do not need pre-market approval, but they cannot be harmful under normal use, and the label cannot be false or misleading.10Office of the Law Revision Counsel. 21 USC Chapter 9, Subchapter VI: Cosmetics
What you claim your product does can move it into a different category entirely. The law defines a drug as any product intended to diagnose, treat, or prevent disease, or to affect the structure or function of the body.9Office of the Law Revision Counsel. 21 U.S. Code 321 – Definitions; Generally A moisturizer promising “softer skin” is a cosmetic. That same moisturizer with claims about treating acne, reducing wrinkles, or providing sun protection crosses into drug territory. A product can be both at the same time, and if it is, it must comply with the requirements for both.
The FDA has sent warning letters to companies making claims about acne treatment, cellulite reduction, stretch mark removal, wrinkle elimination, dandruff treatment, hair restoration, and eyelash growth on products marketed as cosmetics.11U.S. Food and Drug Administration. Warning Letters Address Drug Claims Made for Products Marketed as Cosmetics Drugs require pre-market approval, clinical testing, and stricter manufacturing standards. Selling a product as a cosmetic while making drug claims can result in warning letters, product seizures, and criminal prosecution. Wording on your website, social media, and packaging all count. An Instagram post claiming your moisturizer “heals eczema” can trigger drug classification just as easily as a label claim.
State and Local Business Licenses
Beyond federal requirements, you’ll need permits from your state and possibly your city or county. The specifics vary widely, but most sellers need at least a general business license or registration. Some states require a separate cosmetic manufacturing permit that involves facility inspections and compliance with health and safety standards. Others fold cosmetic production into broader manufacturing or food-handling permit categories.
Home-based sellers face an additional layer of local regulation. Many residential zones restrict or outright prohibit manufacturing activities, limit how much material you can store, ban certain chemicals, and restrict customer visits. Some local codes classify skin care manufacturing as a “home craft use” and impose conditions like prohibiting on-site retail sales of products made at home. Others require a home occupation permit with specific limits on production volume, employee count, and signage.
Check your local zoning code before investing in equipment or inventory. Discovering after the fact that you can’t legally operate from your kitchen is an expensive lesson, and neighbors who complain about deliveries or chemical smells can trigger enforcement even if you’ve been operating quietly for months.
Sales Tax Permits
Skin care products are taxable goods in most states. You’ll need a sales tax permit (sometimes called a seller’s permit or certificate of authority) from each state where you have a tax collection obligation. These are free in most states, though a few charge small fees or require refundable security deposits.
If you sell online, tax obligations extend beyond your home state. The 2018 Supreme Court decision in South Dakota v. Wayfair established that states can require you to collect sales tax based on your economic activity in their state, not just your physical presence. Most states set a threshold of around $100,000 in sales or 200 transactions before this obligation applies, though the exact numbers differ by state. If you sell through platforms like Etsy or Amazon, those marketplaces handle collection in many states, but you’re still responsible for understanding your own obligations.
When you buy raw ingredients and packaging that become part of your finished product, you can purchase those tax-free by providing your supplier with a resale certificate. The certificate applies only to items incorporated into products you sell, not to office supplies, equipment, or anything you use personally.
Product Liability Insurance
Skin care goes directly onto people’s bodies, and allergic reactions and skin irritation are foreseeable risks no matter how carefully you formulate. Product liability insurance covers claims from customers who say your product caused a rash, burn, or other injury. General liability insurance, the kind that covers someone tripping at your craft fair booth, does not cover injuries caused by using your products.
Your homeowner’s insurance almost certainly won’t cover product liability claims from a home-based business. Farmers market policies typically cover general liability at the event only and exclude product claims. Dedicated product liability coverage for small cosmetic businesses starts around $200 to $400 per year for low-volume sellers, with costs increasing alongside sales volume. Many policies have income caps: once your revenue exceeds a certain amount, you’ll need to upgrade. A single allergic reaction lawsuit can dwarf years of premium payments.
What Non-Compliance Costs
Selling a cosmetic that is harmful or mislabeled is a federal crime. A first violation can result in up to one year in prison and a $1,000 fine. A second conviction, or a first violation involving intent to mislead, carries up to three years in prison and a $10,000 fine.12Office of the Law Revision Counsel. 21 USC 333 – Penalties
MoCRA also gives the FDA mandatory recall authority over cosmetics for the first time. If the agency determines that a product is likely to cause serious harm or death and the responsible person refuses to recall it voluntarily, the FDA can order a recall and require the company to cease distribution.13U.S. Food and Drug Administration. FDA Recall Policy for Cosmetics State-level penalties vary but can include business license revocation, additional fines, and civil lawsuits from injured consumers.