Cottage food laws are state exemptions that let residents make certain shelf-stable foods in a home kitchen and sell them directly to consumers without the commercial kitchen licensing and inspections required of restaurants and food manufacturers. Nearly every state and the District of Columbia has one. The catch is that each state writes its own list of allowed foods, its own sales channels, its own revenue cap, and its own labeling and permit requirements, and federal rules still apply on top of the state exemption.
What Counts as a Cottage Food
The exemption only covers foods that stay safe at room temperature. In regulator shorthand, that means food that doesn’t require time or temperature control for safety: it’s either dry enough or acidic enough that dangerous bacteria can’t grow in it. Dry baked goods, high-sugar preserves, and vinegar-based products meet that bar, which is why they appear on approved cottage food lists almost everywhere.
The items most states permit include:
- Baked goods such as breads, cookies, cakes, brownies, muffins, and fruit pies without cream, custard, or meat fillings
- Jams, jellies, fruit butters, and marmalades
- Hard candy, fudge, toffee, and brittles
- Granola, roasted nuts, dried fruits, dry tea blends, roasted coffee beans, popcorn, and dry baking mixes
- Honey, raw or processed
Some states go further. A handful allow acidified foods like pickles, fermented vegetables, or salsa if the producer can show the product meets specific pH thresholds. Others permit chocolate-dipped items, flavored vinegars, or herb-infused oils under set conditions. The only reliable way to know what your state allows is to pull up its agriculture or health department cottage food list.
Foods You Cannot Sell Under a Cottage Food Law
If a food needs refrigeration to stay safe, assume it falls outside the exemption. The usual disqualifiers are significant amounts of meat, poultry, fish, eggs as a primary component, or dairy. Cut fresh fruits and vegetables, raw seed sprouts, and prepared meals that need to be kept cold are off-limits under virtually every program.
Canned goods are especially restricted. Low-acid canned foods like green beans, corn, or soups carry a real botulism risk if processing goes wrong, and they’re banned from cottage food production in nearly every state. Acidified salsas and pickles sit in a gray zone: some states prohibit them, others allow them only after the producer completes a training course on acidification, has a verified recipe with documented pH levels, or both.
CBD, Delta-8, and Cannabis Infusions
Adding CBD, delta-8 THC, or any other cannabis-derived ingredient to food you sell is illegal under federal law, no matter what your state’s cottage food rules say. The FDA has consistently maintained that selling food and beverages containing CBD is not permitted and has sent warning letters to companies doing so. In 2024, the FDA and FTC jointly warned companies selling copycat food products containing delta-8 THC. The FDA concluded in 2023 that existing food and supplement regulatory frameworks are not appropriate for CBD, and no new federal pathway has been created since.
Pet Treats
Homemade dog biscuits are a common side idea, but pet treats typically fall outside cottage food laws entirely. Pet food is regulated under the same federal statute that governs human food, and most states handle it under separate animal feed laws rather than cottage food statutes. Producing pet treats at home for sale may require a different set of permits.
Where You Can Sell
Cottage food laws are built around direct-to-consumer sales. You sell to the person who will eat the food. The usual legal channels are farmers’ markets, roadside stands, community events, and sales from the producer’s home. Some states also allow online ordering with local pickup or personal delivery. Others explicitly prohibit any online component, including electronic ordering and payment.
Sales to restaurants, grocery stores, and other retailers are prohibited under most cottage food programs. Once a middleman enters the picture, the direct consumer relationship that justifies the exemption breaks down. A few states carve out limited wholesale or consignment arrangements, but those are the exceptions.
Revenue Caps
Most states cap annual cottage food revenue. Caps run from around $25,000 to $75,000 in more restrictive states and $150,000 or higher in more permissive ones. A few states impose no cap at all. Blowing past the cap doesn’t just trigger a fine. It typically means you’ve outgrown the exemption and need to move the operation into a licensed commercial kitchen.
Why You Can’t Ship Across State Lines
This is where cottage food producers most often get into serious trouble. When food crosses a state line, it enters interstate commerce and federal FDA regulations take over. The Federal Food, Drug, and Cosmetic Act prohibits introducing adulterated or misbranded food into interstate commerce, and the FDA does not recognize state cottage food exemptions.1GovInfo. Federal Food, Drug, and Cosmetic Act To federal regulators, a cottage food producer shipping cookies to another state is an unlicensed food manufacturer distributing unregulated product. Selling by mail, shipping service, or online marketplace across state lines requires operating as a licensed food business, not a cottage food operation.
Labeling Requirements
Being exempt from commercial kitchen rules doesn’t exempt you from labeling. Most states require cottage food labels to include the name and address of the operation, the common name of the product, and a complete ingredient list in descending order by weight. A prominent disclaimer is also required in most states, typically along the lines of “Made in a Home Kitchen Not Inspected by [State Health Department].” Exact wording varies.
Allergen Declarations
Federal allergen labeling law applies to cottage food. Under 21 U.S.C. ยง 343, any packaged food that contains a major food allergen must declare it in the ingredient list, with the allergen source named in parentheses, or in a separate “Contains” statement right after the ingredient list.2Office of the Law Revision Counsel. 21 USC 343 – Misbranded Food There are nine major food allergens: milk, eggs, fish, crustacean shellfish, tree nuts, peanuts, wheat, soybeans, and sesame.3Office of the Law Revision Counsel. 21 USC 321 – Definitions; Generally Sesame was added as the ninth allergen by the FASTER Act, effective January 1, 2023.4U.S. Food and Drug Administration. The FASTER Act: Sesame Is the Ninth Major Food Allergen Allergen mistakes are one of the fastest routes to enforcement action and one of the most common sources of product liability claims against small food producers.
Net Quantity of Contents
Federal rules also require that labels declare the net quantity of contents, which is the weight or volume of the food itself, excluding packaging. Solid foods are stated in weight, liquids in fluid measure, and the declaration has to appear on the principal display panel as a distinct item separated from other printed information.5eCFR. 21 CFR 101.7 – Declaration of Net Quantity of Contents The Fair Packaging and Labeling Act further requires that quantities be listed in both metric and inch/pound units.6Federal Trade Commission. Fair Packaging and Labeling Act: Regulations Under Section 4 of the Fair Packaging and Labeling Act
Registration, Permits, and Food Safety Training
The assumption that cottage food means zero paperwork isn’t always accurate. Some states let you start selling immediately with no registration. Others require you to submit an application, register with the local health department, or obtain a cottage food permit before your first sale. Where a permit is required, the process is usually simple: a basic application, sometimes a self-certification that your kitchen meets sanitation standards, and a modest fee. Permit and registration costs range from nothing to a few hundred dollars.
Several states also require a food safety course before you sell. These are typically an hour or two online and cover handwashing, cross-contamination, and safe food storage. Even where training isn’t required by law, a basic course is cheap insurance against the kind of mistake that sickens a customer and ends a business.
Some states tier their programs. A lower tier might allow direct home sales with no permit, while a higher tier for farmers’ market sales or higher revenue might require registration, a kitchen inspection, or both. Check your state agriculture department’s website before you start selling.
Taxes
Cottage food income is taxable. The IRS treats a cottage food business like any other sole proprietorship: revenue and deductible expenses go on Schedule C (Form 1040).7Internal Revenue Service. Instructions for Schedule C (Form 1040) Deductible expenses commonly include ingredients, packaging, labels, farmers’ market booth fees, and delivery mileage.
On top of income tax, you owe self-employment tax on net profit. The rate is 15.3%: 12.4% for Social Security and 2.9% for Medicare.8Social Security Administration. Contribution and Benefit Base This catches new sellers off guard because it sits on top of regular income tax. If you’re netting more than a few thousand dollars a year, you’ll likely need to make quarterly estimated payments to avoid a penalty at filing time.
If you use part of your home regularly and exclusively for the business, you may qualify for the business use of home deduction. The simplified method allows $5 per square foot, up to 300 square feet, for a maximum of $1,500.9Internal Revenue Service. Simplified Option for Home Office Deduction The exclusive-use requirement is tricky for a kitchen that also feeds your family. Talk to a tax advisor about your specific situation.
Most cottage food sole proprietors can use their Social Security number and don’t need a separate Employer Identification Number. You need an EIN if you hire employees, form an LLC or other entity, or have to file excise tax returns.10Internal Revenue Service. Get an Employer Identification Number Sales tax is a separate state-level issue. Some states exempt certain foods, others require cottage food producers to collect and remit on taxable sales, which may mean a separate sales tax permit.
Insurance and Business Structure
Standard homeowners insurance excludes business activities. If a customer gets sick from your product or someone trips at your market booth, your homeowners policy almost certainly won’t pay. The financial exposure from a single foodborne illness complaint can dwarf years of cottage food revenue.
Product liability insurance written for small food businesses fills that gap. These policies generally cover illness or injury claims from food you’ve sold, property damage caused by your business operations, and legal defense costs. Some farmers’ markets require proof of liability coverage as a condition of renting booth space. Basic coverage starts in the low hundreds of dollars a year, which is well under the cost of defending even a weak lawsuit.
Most cottage food producers start as sole proprietors because it requires no state filings and is simple to run. The downside is that a sole proprietorship offers no separation between personal and business assets. If the business is sued, your personal savings and home equity are potentially exposed. A limited liability company creates that separation when properly maintained, at the cost of formation paperwork, an annual state fee in most states, and possibly a separate tax return depending on how the LLC is structured. For a brand new operation earning modest revenue, the cost may not be worth it. As sales grow, the protection gets harder to pass up.
What Happens If You Break the Rules
Enforcement varies, but the consequences are real. Selling food outside your state’s approved list, exceeding the revenue cap, or selling through unauthorized channels can draw warnings, fines, permit revocation, or an order to stop selling. In serious cases involving adulterated or misbranded food, state agriculture departments can seize product and refer the matter for criminal prosecution.
Federal consequences are steeper. Shipping cottage food across state lines puts you under FDA jurisdiction, and introducing adulterated or misbranded food into interstate commerce is a prohibited act under the Federal Food, Drug, and Cosmetic Act, with penalties that include product seizure, injunctions, and criminal charges. The most common trigger for federal action against small producers is interstate online sales: someone opens an Etsy shop, ships cookies to another state, and draws an FDA warning letter.
The reliable way to stay compliant is to treat the state cottage food law as a bright line. Stay on the approved food list, stay under the revenue cap, sell only through authorized channels, and keep labels accurate. The exemption exists to make small-scale food businesses accessible. It does not make them regulation-free.