Starting a home bakery business sounds like a dream come true. You’re baking what you love, working from your own kitchen, and turning your passion into profit. 

But here’s the reality check most aspiring bakers don’t hear until it’s too late: without the right licenses and legal setup, your home bakery could face fines, forced shutdowns, or worse.

The legal landscape for home bakeries varies drastically from state to state. What’s perfectly legal in Texas might land you in trouble in New York. 

And with cottage food laws constantly evolving, staying compliant isn’t just about checking boxes once and forgetting about it.

This guide breaks down exactly what you need to legally start and run a home bakery business in any U.S. state. 

You’ll learn which licenses you actually need, how cottage food laws work, what you can and can’t sell, and how to avoid the costly mistakes that trip up most home bakers. Let’s get you set up the right way.

Understanding Cottage Food Laws and Your Home Bakery Business

Cottage food laws are the legal framework that makes it possible for you to bake and sell food products from your home kitchen. These laws exist in all 50 states now, though they look very different depending on where you live.

Think of cottage food laws as the government’s way of saying, “We understand you want to start small, so we’re relaxing some commercial kitchen requirements—but only for certain low-risk foods.” 

The key phrase there is “low-risk.” States designed these laws specifically for shelf-stable baked goods like cookies, breads, and cakes that don’t need refrigeration to stay safe.

According to recent legislative reforms, all 50 states and Washington, D.C., now have cottage food programs in place. This wasn’t always the case. New Jersey became the last state to allow homemade food sales as recently as 2021. 

Since 2015, 34 states have either created new programs or significantly expanded their existing cottage food laws.

What Cottage Food Laws Allow You to Do

Cottage food laws typically give you permission to prepare specific types of food in your home kitchen and sell them directly to consumers without needing a commercial kitchen license. But there are usually strings attached.

The laws generally limit you to “non-potentially hazardous” foods. Basically, these are foods that won’t grow harmful bacteria at room temperature. 

Baked goods, jams, certain candies, and dry mixes usually fall into this category. 

Anything that needs to be kept cold or hot to stay safe—like cream-filled pastries, fresh pasta with eggs, or buttercream-frosted cakes—is typically off-limits.

Revenue Caps by State Category

Most states put a ceiling on how much money you can make annually while operating under cottage food laws. These caps exist to keep operations small-scale and home-based.

Revenue limits vary widely. Some states, like Michigan and Maryland, cap you at $25,000 per year. Others, like California, allow up to $75,000 (adjusted for 2025). Texas recently raised its cap to $150,000, effective September 1, 2025, while Florida allows up to $250,000 in annual sales.

Then you have the food freedom states—Wyoming, Montana, North Dakota, Utah, and parts of Oklahoma—where there are essentially no revenue caps at all. These states take a hands-off approach, allowing you to sell almost any homemade food directly to consumers without licensing or revenue restrictions.

Allowed Food Products vs. Prohibited Items

The list of allowed foods varies by state, but most cottage food laws cover these basics:

Cookies, brownies, and baked goods without cream filling. Breads, rolls, and pastries. Cakes without perishable frosting. Candy and confections. Granola and trail mixes. Dry baking mixes. Jams, jellies, and preserves. Roasted coffee beans.

What you typically can’t sell: anything with meat, poultry, or seafood. Products requiring refrigeration. Cream-filled or custard-filled items. Buttercream or cream cheese frostings. Fresh-cut fruits or vegetables. Canned low-acid foods unless following specific processes. Ice cream, frozen desserts, or anything with ice.

But here’s where it gets interesting. As of 2025, eight states now allow certain perishable TCS (Time/Temperature Control for Safety) foods that require refrigeration. 

California, Iowa, Montana, North Dakota, Oklahoma, Utah, Wyoming, and Texas (effective September 1, 2025) permit some refrigerated items, though they require additional food safety training and stricter labeling.

The Three Types of Cottage Food States

States generally fall into three categories when it comes to cottage food regulation.

1. Strict Regulation States

These states require permits, kitchen inspections, mandatory training, and have lower revenue caps. Examples include Georgia (requires inspection and training) and states that limit you to direct sales only at specific venues like farmers markets.

In these states, you’ll jump through more hoops, but you also get clearer guidance on what’s allowed. The inspection process might feel invasive, but it also gives you confidence you’re doing things right.

2. Moderate Regulation States

Most states fall here. They require registration or a simple permit, food safety training, proper labeling, and have moderate revenue caps. 

You won’t face kitchen inspections in most cases, but you do need to complete some paperwork and education.

California’s Class A permit is a good example—you register online, complete food handler training, and you’re approved to sell up to $75,000 annually without a kitchen inspection.

3. Food Freedom States

Wyoming, Montana, North Dakota, Utah, and Oklahoma lead the pack here. These states have eliminated most cottage food restrictions. No permits, no inspections, no revenue caps. You simply label your products correctly and sell directly to consumers.

According to state health departments in these food freedom states, there hasn’t been a single outbreak of foodborne illness linked to a food freedom business. This track record has encouraged more states to consider loosening their own restrictions.

Do You Need a Cottage Food License to Start Your Home Bakery?

This depends entirely on your state. Some require formal licenses or permits, others just need registration, and a few don’t require anything at all beyond proper labeling.

States That Require Registration or Permits

California operates a two-tier system. Class A permits allow direct sales only and require registration plus food handler training. Class B permits allow both direct and indirect sales (like selling to coffee shops) but require a kitchen inspection and permit.

Arizona requires free registration with the state. Minnesota mandates registration with the Department of Agriculture, annual renewal, and completion of food safety training before you can start selling.

Iowa divides home food businesses into categories. Cottage Food operations have simpler requirements, while Home Food Processing Establishments need licensing and inspections. Texas requires registration with DSHS only if you’re selling TCS foods that need refrigeration under the new 2025 rules.

States With No License Requirements

Alabama, Arkansas, Montana, North Dakota, Utah, and Wyoming don’t require permits or licenses. You complete food handler training (mandatory in some, voluntary in others) and label your products correctly, and you’re good to go.

Florida doesn’t require any permit or training for cottage food operations. You just need to follow labeling requirements and stay under the $250,000 annual cap. Nebraska and several other states take similar approaches—no permit needed, but strict rules on where and how you can sell.

How to Apply for Your Cottage Food License

If your state requires a permit or registration, here’s the typical process:

First, visit your state’s Department of Health or Department of Agriculture website. Look for “cottage food,” “home processor,” or “home bakery” information. Most states have dedicated pages explaining requirements.

Complete any required food safety training. This usually involves a short online course costing $5-30. You’ll learn about proper food handling, cross-contamination prevention, and safe storage practices. Many states use ServSafe or similar standardized programs.

Fill out the registration or permit application. You’ll provide your name, address, the types of foods you plan to sell, and sometimes estimated annual revenue. Some states charge a small fee ($50-100), while others offer free registration.

If a kitchen inspection is required, schedule it with your local health department. They’ll check that you have proper handwashing facilities, adequate food storage, and clean work surfaces. Home kitchens usually pass easily since you’re already cooking there—inspectors just want to see you’re following basic safety practices.

Once approved, you’ll receive confirmation, a permit number (in some states), and guidelines on labeling requirements. Keep this documentation handy in case customers or venue operators ask to see proof you’re operating legally.

Essential Business Licenses and Permits for Home Bakeries

Beyond cottage food laws, you need several basic business licenses and registrations that apply to any home-based business.

Business License Requirements

When You Need a General Business License

Most cities and counties require a general business license for any commercial activity, even if you’re working from home. This isn’t specific to food businesses—it’s the baseline permission to operate any business in your jurisdiction.

The business license serves several purposes. It allows your local government to track commercial activity, collect appropriate taxes, and ensure businesses comply with zoning regulations. Think of it as your local government saying, “Yes, we know you’re running a business here, and that’s okay.”

Research from business compliance experts shows that licensing requirements can vary significantly even within the same state. Your city might have different rules from the neighboring town.

Cost and Application Process

Business license fees typically range from $50-200 annually, depending on your location and expected revenue. Some jurisdictions charge a flat fee, while others calculate costs based on your gross receipts.

To apply, contact your city clerk’s office or visit their website. You’ll usually need to provide your business name, address, description of business activities, and estimated annual revenue. Processing takes anywhere from a few days to several weeks.

Don’t forget to renew annually. Most business licenses expire after one year, and operating with an expired license carries the same penalties as operating without one at all.

Employer Identification Number (EIN)

Who Needs an EIN

An EIN is essentially a Social Security number for your business. The IRS assigns this nine-digit number to identify your business for tax purposes.

You need an EIN if you plan to hire employees, operate as an LLC or corporation, or open a business bank account. Even if you’re a sole proprietor working alone, getting an EIN is smart. It protects your personal Social Security number from exposure on business documents.

How to Get Your EIN for Free

Getting an EIN costs nothing. Visit the IRS website and apply online—the process takes about 10 minutes, and you’ll receive your EIN immediately. You can also apply by fax, mail, or phone, though these methods take longer.

One important note: the IRS only issues one EIN per day per “responsible party.” If you’re applying for multiple businesses, you’ll need to space out your applications.

Sales Tax Permit and Resale Certificates

Most states require you to collect sales tax on food sales. A sales tax permit authorizes you to collect this tax from customers and remit it to your state revenue department.

The permit also gives you a resale certificate, which allows you to purchase ingredients and supplies wholesale without paying sales tax upfront. You’ll collect that sales tax when you sell the finished product to customers instead.

Application processes vary by state, but most are free or cost minimal fees ($0-50). You’ll report and pay collected sales tax monthly, quarterly, or annually depending on your sales volume.

Some states exempt certain food items from sales tax, while others tax everything. Check your specific state requirements—rules around food taxation get complicated quickly.

Home Kitchen License Requirements and Food Safety Certifications

Food safety knowledge protects both you and your customers. Many states mandate formal training, while others strongly recommend it.

Food Handler’s Permit and Safety Training

Mandatory Training States

States like California, Texas, Minnesota, and Arizona require documented food safety training before you can operate under cottage food laws. 

The training covers topics like proper handwashing techniques, preventing cross-contamination, safe food storage temperatures, and recognizing foodborne illness risks.

These courses typically take 2-4 hours and cost $10-30. Most states accept online training through approved providers like ServSafe, Learn2Serve, or state-specific programs.

You’ll need to pass a test at the end, but it’s not difficult if you pay attention. The information is straightforward, common sense about keeping food safe—washing hands, preventing bacteria growth, and storing ingredients properly.

Where to Get Certified

Your state’s Department of Health website lists approved training providers. Many offer the same content, so shop around for the best price and most convenient format.

Some states provide free training through their cooperative extension offices. County health departments sometimes offer in-person classes. 

Online courses are most convenient—you can complete them at your own pace from home.

Certifications usually remain valid for 3-5 years before requiring renewal. Keep your certificate somewhere safe and make a digital copy. 

You might need to show proof of certification when registering your cottage food operation or when selling at certain venues.

Kitchen Inspection Requirements

What Inspectors Look For

If your state requires kitchen inspections (Class B permits in California, for example), inspectors will examine your home kitchen for basic safety compliance.

They’ll check that you have dedicated handwashing facilities separate from food prep sinks. They’ll look at your food storage areas to ensure proper separation of personal and business foods. 

They’ll verify you have adequate refrigeration and that your kitchen is clean and pest-free.

Inspectors also look at your water source. If you’re on municipal water, that’s usually fine. 

If you have a private well, you might need to provide water testing results showing your water is safe for food preparation.

But the good news is that most home kitchens already meet requirements. You’re cooking there daily, so it’s naturally equipped for food preparation. 

Inspectors understand this is your home, not a commercial facility—standards are reasonable.

Preparing Your Home Kitchen

Before an inspection, deep-clean your kitchen. Make sure there’s no visible dirt, grease buildup, or signs of pests. Store all foods in sealed containers and label them clearly.

Have separate areas for business ingredients versus personal groceries if possible. 

Use separate cutting boards and utensils for business baking. Document your cleaning procedures and food safety practices.

If you have pets, keep them out of the kitchen during food preparation. Inspectors understand pets exist in homes, but they shouldn’t be in your work area while you’re baking.

Fix any obvious issues—leaky faucets, damaged flooring, broken tiles. These might not prevent approval, but fixing them shows you take safety seriously.

Food Service License vs. Home Processor Exemption

These terms often confuse new home bakers. A food service license is what restaurants and commercial kitchens need. 

It involves extensive inspections, commercial-grade equipment requirements, and strict ongoing compliance.

A home processor exemption (also called cottage food exemption) specifically exempts you from needing a full food service license. 

That’s the whole point—you’re producing low-risk foods in small quantities, so states waive the commercial kitchen requirements.

You cannot operate under a cottage food exemption while also holding a food service license for another business. If you have a permitted commercial kitchen, all your food production must happen there. 

The home exemption only works if you’re exclusively producing in your home kitchen.

Zoning Laws and Home Occupation Permits for Bakery Businesses

Your home’s zoning designation determines what business activities you can legally conduct there. This applies even if you have all your food licenses in order.

Understanding Residential Zoning Restrictions

Most homes are situated in areas zoned for residential use. These zones exist to preserve neighborhoods primarily for residential use, not commercial industry. 

But many residential zones allow certain “home occupations”—businesses that don’t disrupt the residential character of the area.

Typical restrictions include limits on customer foot traffic, no external signage (or very limited signs), no additional parking requirements, and keeping the business clearly secondary to your home’s residential use. 

Some zones restrict the percentage of your home’s square footage you can dedicate to business purposes.

Your local zoning ordinances spell out exactly what’s allowed. These rules vary widely. One town might freely permit home bakeries, while the next town over might prohibit any commercial activity in residential zones.

Before investing in equipment or inventory, verify your home is zoned appropriately. Call your city or county planning department. 

Explain that you want to start a low-startup business baking from home. They’ll tell you if that’s permitted in your zone and what requirements you must meet.

Home Occupation Permit Requirements

Many jurisdictions require a “home occupation permit” in addition to a general business license. This permit specifically authorizes commercial activity in a residential area.

The application usually asks about the nature of your business, hours of operation, expected customer visits, parking needs, and whether you’ll have employees. 

For a home bakery selling primarily online or at farmers markets, this should be straightforward—you’ll note minimal or no customer visits to your home, no additional parking needed, and likely no employees.

Fees range from $50 to $150. Some places bundle the home occupation permit with the business license, while others treat them as separate entities. Processing typically takes 2-4 weeks.

Certain restrictions usually come with the permit. You might be prohibited from putting up exterior signs. You can’t convert your garage into a retail storefront. 

Customer pickup might be limited to certain hours. Read the conditions carefully and make sure you can comply before applying.

HOA Rules and Lease Restrictions

If you live in a property governed by a homeowner’s association (HOA), their covenants might restrict business activities regardless of what city zoning allows. HOAs can impose stricter rules than municipal codes.

Review your HOA bylaws before starting your bakery. Some HOAs prohibit any commercial activity. Others allow quiet home-based work but ban activities involving regular customer visits or delivery vehicles.

If you’re renting, check your lease. Many leases explicitly prohibit business operations. Running a home bakery could violate your lease terms and give your landlord grounds for eviction.

The time to address these issues is before you invest in your business, not after your HOA threatens fines or your landlord issues an eviction notice. If restrictions exist, talk to your HOA board or landlord. 

Sometimes they’ll grant exceptions for quiet, low-impact businesses like cottage food operations. Get any permissions in writing.

State-by-State Cottage Food Law Variations

Cottage food laws look dramatically different depending on where you live. Let’s break down some key states and what makes them unique.

California Home Bakery Requirements

California pioneered cottage food laws and operates one of the more structured programs in the country.

Class A vs. Class B Permits

California offers two cottage food operation types. Class A permits allow direct sales only—you sell directly to consumers at farmers’ markets, your home, or through online orders with pickup. You can earn up to $75,000 annually (adjusted for 2025 inflation).

Class A requires registration with your county environmental health department, completion of a food processor course, and proper labeling. No kitchen inspection needed.

Class B permits allow both direct and indirect sales—you can sell to retail stores, restaurants, and other third-party sellers. 

The revenue cap is also $75,000 annually. But Class B requires a kitchen inspection and a formal permit (not just registration).

Both classes prohibit sales of foods requiring refrigeration, though California’s rules are specific about what’s allowed. 

Dry baked goods, breads without cream filling, fruit pies (if properly acidified), nut butters, and candy are typically fine.

Registration fees vary by county but typically run $100-200 annually. The food processor course costs about $20-50 online.

Texas Cottage Food Law Updates (2025)

Texas historically had one of the most liberal cottage food laws in the nation. Recent changes make it even more permissive.

TCS Food Changes Effective September 2025

The big news: as of September 1, 2025, Texas allows TCS foods (foods requiring Time and Temperature Control for Safety). 

This means you can now sell items that need refrigeration—like certain frostings, refrigerated baked goods, and other perishable items.

If you’re selling TCS foods, you must register with the Department of State Health Services (DSHS). 

You need to add production dates to labels and include safe handling instructions: “SAFE HANDLING INSTRUCTIONS: To prevent illness from bacteria, keep this food refrigerated or frozen until the food is prepared for consumption.”

The revenue cap jumped to $150,000 annually (indexed for inflation starting in 2025). No local health department or government authority can require permits or fees from cottage food producers. 

If they try, state law requires them to fire the employee responsible—Texas doesn’t mess around about protecting home bakers.

Texas also simplified sampling rules. You can offer samples anywhere in the state without permits or fees. 

Sales can happen anywhere—online, at farmers’ markets, special events, your home, or through delivery.

Prohibited foods still include meat, poultry, seafood, ice products, canned vegetables unless properly acidified, raw seed sprouts, and raw milk. 

But pretty much everything else is fair game as long as you label correctly and stay under the revenue cap.

Florida Home Bakery Regulations

Florida takes a hands-off approach to cottage food. The state allows up to $250,000 in annual gross sales—one of the highest caps in the country.

No license required. No training is mandated. No kitchen inspection. You just need to label products correctly and stick to allowed foods.

Florida limits you to direct sales only. You can’t sell to restaurants or retail stores. But you can sell online, at farmers’ markets, roadside stands, or your home, or deliver orders yourself.

Allowed foods include most baked goods, candies, dry goods, and certain other shelf-stable items. Anything requiring refrigeration is off-limits. 

The full list is specific, so check Florida’s Department of Agriculture website for details.

The state requires a disclaimer on labels: “Made in a cottage food operation that is not subject to Florida’s food safety regulations.” Plus standard labeling with ingredients, allergens, net weight, and your contact information.

New York Home Processor Exemption

New York calls its cottage food law a “home processor exemption.” It allows you to process approved non-potentially hazardous foods in your home for commercial sale without obtaining a food processing license.

The term “processing” is broad in New York—it includes baking, mixing, coating, assembling, or any method of treating food. 

Home processors can make baked goods, candy, certain jams and jellies, and other approved items.

You must register with the New York Department of Agriculture and Markets. Registration is free, but you need to include specific information on labels: “Made in a Home Kitchen,” “Made at Home by [Your Name],” or similar language. Font size must be at least 1/16th inch.

If you have a private well, you must submit water testing results showing your water is safe for food preparation. Municipal water sources don’t need testing.

New York doesn’t mandate insurance but strongly recommends it. The state also emphasizes checking local zoning laws before starting—some municipalities have additional restrictions beyond state requirements.

One quirk: if you hold any other food establishment permit or license (like for a restaurant), you cannot operate under the home processor exemption. All your commercial food production must happen in your licensed facility.

States With Revenue Caps Above $100,000

Several states recognize that $25,000-50,000 caps limit growth potential for successful home bakers.

Florida leads at $250,000. Texas follows at $150,000 (up from $50,000 pre-2025). California allows $75,000 per year. Ohio permits up to $100,000 in home food sales.

These higher caps acknowledge that a thriving home bakery can generate substantial revenue while still operating safely from a home kitchen. They give you room to grow your business before needing to transition to a commercial facility.

Meanwhile, five states—Wyoming, Montana, North Dakota, Utah, and Oklahoma—impose no revenue caps at all under their food freedom laws. You can generate unlimited income as long as you’re selling directly to consumers and labeling products properly.

Insurance and Liability Protection for Your Home Bakery Business

While not legally required in most states, insurance protects your business from potentially devastating financial losses.

Do You Need Liability Insurance?

Most states don’t mandate insurance for cottage food operations. New York explicitly states the Department of Agriculture and Markets doesn’t require it. But legal requirements and smart business practices are different things.

Consider this scenario: a customer claims your cookies caused an allergic reaction. 

Even if you labeled allergens correctly and did nothing wrong, defending yourself could cost $10,000-50,000 in legal fees. 

Or imagine someone slips on your icy driveway during product pickup and breaks their wrist. Your homeowner’s insurance might not cover business-related incidents.

Product liability claims, customer injuries, foodborne illness allegations—any of these could bankrupt a small home bakery without insurance protection. 

And here’s the thing: you don’t need to be at fault to face a lawsuit. You just need someone to file one.

Types of Insurance to Consider

General liability insurance covers third-party bodily injury and property damage claims. If a customer gets sick (or claims to) from your products, this coverage handles medical costs and legal defense. Policies typically cost $400-800 annually for home-based food businesses.

Product liability insurance specifically protects against claims of injury or illness from your food products. 

This might be included in general liability or purchased separately. Coverage ranges from $1 to 2 million per occurrence.

Business property insurance covers your business equipment, inventory, and supplies. If your oven catches fire and destroys $5,000 in equipment plus $2,000 in ingredients, this coverage reimburses you. Your homeowner’s policy probably won’t cover business property.

Home-based business insurance, or a business owner’s policy (BOP), often bundles several coverages at a discounted rate. 

These packages typically include general liability, property coverage, and sometimes business interruption insurance.

Commercial umbrella insurance provides additional coverage beyond your primary liability limits. For an extra $200-300 annually, you can add another $1-2 million in coverage—worthwhile if you have significant assets to protect.

Cost of Home Bakery Insurance

Basic general liability policies for home bakeries typically cost $300-800 per year. Factors affecting cost include your annual revenue, types of products sold, sales locations, and desired coverage limits.

Bundled policies combining multiple coverage types might run $600-1,500 annually. This seems expensive when you’re just starting, but it’s far less than defending a single lawsuit.

Some venues require proof of insurance before allowing you to sell. Farmers’ markets, special events, and festivals often mandate vendors carry $1-2 million in general liability coverage. 

Your policy should include the ability to add venues as “additional insured” parties on your certificate of insurance.

Shop around. Get quotes from multiple insurance providers. Some specialize in small food businesses and offer better rates than general business insurers. 

Your state’s cottage food association might have group insurance programs with discounted rates.

Labeling Requirements and Legal Disclaimers

Proper labeling isn’t just good practice—it’s legally required in every state with cottage food laws. Labels protect consumers and protect you from liability.

Required Label Information by State

While specific requirements vary, most states mandate these elements on every food product label:

• Product name: The common name of what you’re selling. “Chocolate chip cookies,” not just “Cookies.” Be specific and accurate.

• Ingredient list: All ingredients in descending order by weight. List them as they appear on the packages you bought them in. If you use “all-purpose flour,” write that, not just “flour.”

• Allergen warnings: The FDA requires clear identification of eight major allergens—milk, eggs, fish, shellfish, tree nuts, peanuts, wheat, and soybeans. List them in plain language. “Contains: Wheat, Eggs, Milk.”

• Net quantity: The weight or volume of the product. Use both standard and metric measurements: “Net Wt. 8 oz (227g).”

• Your name and address: Full name (personal or business) and complete street address. Some states allow P.O. boxes, others require physical addresses. Check your state rules.

• Production location statement: Many states require language like “Made in a home kitchen,” “Produced in a cottage food operation,” or similar. California requires “Made in a Home Kitchen” plus your permit number.

• Permit or registration number: If your state issues a cottage food permit or registration number, include it on the label.

Cottage Food Disclaimer Language

Most states require a specific disclaimer informing customers the product wasn’t made in a licensed commercial kitchen. The exact wording matters—use your state’s required language verbatim.

Common versions include:

“This product was produced in a private residence that is exempt from state licensing and inspection.”

“Made in a home kitchen that is not subject to public health inspection and that may also process common food allergens.”

“This product is homemade and not subject to state inspection.”

“Made in a home kitchen” (California’s simpler requirement).

Font size minimums often apply. Many states require the disclaimer to appear in at least 1/16-inch type. Make it readable—don’t try to hide this information in tiny text.

Allergen Warnings

Allergen labeling saves lives. Even trace amounts of allergens can cause severe reactions in sensitive individuals.

List all ingredients containing the eight major allergens. But also consider cross-contamination. If you bake peanut butter cookies and sugar cookies in the same kitchen, your sugar cookies might have trace peanut exposure.

Many home bakers add voluntary warnings: “Made in a facility that also processes tree nuts, peanuts, and wheat.” This protects you legally and helps customers make informed decisions.

Be especially careful with “hidden” allergens. Butter contains milk. Many chocolates contain soy lecithin. Some sprinkles contain wheat. Read ingredient labels on everything you use.

What Your Label Must Include

Let’s put it all together. A compliant cottage food label includes:

Product name in a clear, readable font at the front. Ingredient list on the back or side panel. Allergen statement (if applicable) immediately following or highlighted separately. Net weight or volume. 

Your business name and complete address. Cottage food disclaimer using your state’s required language. Permit or registration number (if your state issues one). Production date or “best by” date (required in some states).

Design your labels clearly. Use readable fonts—no fancy script that’s hard to read. Black text on a white background works well. 

You can add your logo, brand colors, and design elements, but don’t let aesthetics compromise clarity.

Print labels on quality material. Ink that smudges when exposed to moisture looks unprofessional and might make important information unreadable. 

Adhesive labels work well for containers. For packaging like bags, you can print directly on the bag or attach a label.

Keep templates on file. Once you’ve designed compliant labels for your products, save the templates. You’ll need to print labels regularly, and having approved designs ready saves time.

What Foods Can You Legally Sell Under Cottage Food Laws?

Understanding which foods are permitted versus prohibited keeps you compliant and protects your customers.

Allowed Foods in Most States

The safest category is baked goods that don’t require refrigeration. Plain cookies, brownies, biscotti, and similar items almost always get approval. Breads, rolls, bagels, and similar products also typically qualify.

Cakes and cupcakes are usually allowed if they don’t have perishable frosting. A dusted powdered sugar coating or glaze made from powdered sugar works. Buttercream, cream cheese frosting, or whipped cream toppings typically don’t.

Fruit pies sometimes qualify, but states are specific about which ones. Apple and berry pies usually pass because they’re acidic enough to prevent bacterial growth. Pumpkin pie often doesn’t because it’s low-acid.

Dry goods like granola, trail mix, roasted nuts, and popcorn generally get approval. Jams, jellies, and fruit preserves typically qualify if you follow approved recipes, ensuring proper acidity levels.

Candy and confections—fudge, caramels, brittles, toffee—usually work. But chocolates with cream fillings might not. Dry baking mixes for cookies, brownies, or breads are almost always permitted.

Prohibited Foods and TCS Restrictions

Anything requiring refrigeration to stay safe is usually prohibited. This includes cream pies, custard-filled pastries, cream cheese frosting, fresh pasta with eggs, and dairy-based products.

Meat, poultry, and seafood are off-limits in all states under cottage food laws. This includes jerky, canned meats, or baked goods containing meat as an ingredient.

Low-acid canned vegetables require pressure canning and pose botulism risks. States universally prohibit these under cottage food laws. 

High-acid canned items (pickles, certain tomato products) might be allowed with approved recipes and processes.

Fresh-cut fruits and vegetables aren’t typically allowed. Dried fruits might be, but states vary on this.

Pet treats have specific rules. Some states explicitly include them in cottage food laws, others don’t mention them, and a few prohibit them. Minnesota recently updated its laws to allow cottage pet treats with specific regulations.

States That Allow Refrigerated Products

The TCS landscape is changing. Eight states now permit certain foods requiring refrigeration: California, Iowa, Montana, North Dakota, Oklahoma, Utah, Wyoming, and Texas (as of September 2025).

These states typically require additional food safety training when you’re selling TCS items. You’ll need more detailed labeling, including production dates and safe handling instructions.

Texas’s approach is instructive. Under its new rules, you can sell almost any food (except those specifically prohibited, like meat and seafood) as long as you register for TCS foods, label properly, and include refrigeration instructions.

This trend toward allowing more food types reflects growing confidence in home food producers. 

As states observe successful cottage food operations without foodborne illness outbreaks, they’re becoming more comfortable expanding what’s permitted.

Where Can You Sell Your Home Bakery Products?

Sales venue restrictions are often more limiting than food type restrictions. Understanding where you can sell is crucial for planning your business growth.

Direct Sales vs. Indirect Sales

Direct sales mean you sell face-to-face with the end consumer. This includes sales at farmers markets, craft fairs, your home, community events, or through online orders with in-person pickup or delivery.

Most cottage food laws limit you to direct sales only. The logic: direct interaction allows customers to ask questions about ingredients and preparation. You can explain allergen risks and how you made the product.

Indirect sales involve a middleman. You sell to a coffee shop, grocery store, or restaurant, and they resell to their customers. 

This is typically prohibited under cottage food laws (with notable exceptions like California’s Class B permit and a few other states).

The distinction matters for compliance and for business planning. If your state restricts you to direct sales, you can’t build a business model around wholesale accounts. 

You’ll need to focus on farmers markets, online sales with local pickup, or other direct channels.

Farmers Markets and Special Events

Farmers markets are the primary sales venue for most cottage food operations. They provide built-in foot traffic, attract customers specifically looking for homemade products, and create community connections.

Most states explicitly allow farmers market sales under cottage food laws. Some require market managers to track cottage food vendors. You might need to show proof of registration or permits before setting up your booth.

Special events—craft fairs, holiday markets, festivals, and fundraisers—also typically qualify as direct sales venues. Some states require advance notification or approval for certain events. 

Church bake sales and school fundraisers might have special exemptions or simplified rules.

One important note: venue operators often require proof of liability insurance even if your state doesn’t mandate it. Having a certificate of insurance opens doors to better selling opportunities.

Online Sales and Shipping Restrictions

Online sales complicate things. Many states allow online ordering with local pickup or in-person delivery. This counts as direct sales since you ultimately hand the product to the customer.

But shipping through mail or commercial carriers is different. Most states prohibit shipping cottage food products, though this is changing. Alabama allows interstate shipping of cottage foods—one of the few states permitting sales across state lines.

California recently expanded its law to allow mail delivery and shipment within California. Minnesota passed revisions in 2025 that will allow shipping of human cottage foods starting August 2027 (though pet treats can already be shipped).

North Dakota’s 2025 update allows cottage food to be sold in interstate commerce and through mail delivery—a significant expansion.

Why the restrictions? Shipping introduces temperature control issues. Your shelf-stable cookies might be fine, but sitting in a hot delivery truck for three days might degrade quality or safety. States worry about products reaching customers in poor condition.

If you want to ship products nationally, you’ll eventually need to transition from a cottage food operation to a licensed commercial kitchen or co-packer arrangement. That’s beyond the cottage food law scope, but it’s the path for serious growth.

Common Legal Mistakes Home Bakers Make

Even with good intentions, home bakers often stumble into legal trouble. Avoid these common errors.

1. Operating Without Proper Registration

The biggest mistake? Starting to sell before completing required registrations or permits. Many bakers think, “I’ll just test the market first, then get legal if it works.”

Bad idea. Local health departments and enforcement agencies don’t care that you were “just trying things out.” Selling food without required permits can result in cease-and-desist orders, fines ranging from $500-5,000, and confiscation of products and equipment.

Even states without permit requirements often need you to follow other rules—proper labeling, allowed food restrictions, sales venue limitations. “No permit required” doesn’t mean “no rules apply.”

Get your paperwork done first. It takes a few days to a few weeks, costs minimal money, and protects you from legal problems. Validate your business idea properly by starting legal from day one.

Exceeding Revenue Caps

When your cottage food bakery starts making real money, it’s tempting to keep going even as you approach or exceed your state’s revenue cap.

Don’t. Revenue caps are hard limits, not suggestions. Exceeding them means you’re no longer operating under cottage food law protections—you’re running an illegal commercial food operation without proper licensing.

Track your revenue carefully. If you’re approaching your cap, you have three options. One, stop selling until the next calendar year. 

Two, transition to a licensed commercial kitchen or co-packer arrangement. Three, move to a state with higher caps or no caps (assuming that’s feasible).

Some states forgive small overages or have grace periods. Most don’t. The penalties for exceeding caps can include retroactive fines, being permanently barred from cottage food operations, and possible civil liability if health issues arise.

Selling Prohibited Foods

“But I make the best cream-filled donuts—can’t I just sell those?”

If cream-filled donuts aren’t on your state’s allowed list, the answer is no. Period.

Selling prohibited foods voids your cottage food protection. You’re now operating a commercial food business without proper licensing. If someone gets sick from your product, you have zero legal protection.

Stick to the allowed list. If you want to sell foods not permitted under cottage food laws, transition to a commercial kitchen where all foods are allowed (subject to normal health department oversight).

Conclusion

Starting a home bakery business comes with real legal requirements, but they’re manageable when you understand them. Every state now allows some form of cottage food operation, giving you a legitimate path to turn your baking passion into income.

You need to research your specific state’s cottage food laws, complete required registrations or permits, ensure proper labeling, understand which foods you can and can’t sell, know where you’re allowed to sell, and consider liability insurance even if not required.

Legal compliance isn’t just about avoiding fines. It protects your customers, builds trust in your brand, and creates a sustainable foundation for growth. Customers who see proper labels and know you’re following regulations feel confident buying from you repeatedly.

Frequently Asked Questions

Do I need a business license to start a home bakery?

It depends on your location and state cottage food laws. Most cities and counties require a general business license for any commercial activity, even home-based operations. This is separate from cottage food registration or permits. 

The business license typically costs $50-200 annually and authorizes you to conduct commercial transactions in your jurisdiction. Contact your city clerk’s office to determine specific requirements in your area. Some states also require cottage food registration or permits beyond the general business license.

How much does a cottage food license cost?

Costs vary significantly by state and type of registration. Some states, like Arizona, offer free registration. Others charge $50-200 for permits or registrations. 

California’s Class A registration runs about $100-200, depending on your county. Food safety training courses required in many states cost $10-30. 

Overall, expect to spend $50-300 total for all required registrations, permits, and training when starting a cottage food operation. 

Some states require annual renewal fees, while others offer multi-year registrations.

Can I sell my home bakery products online?

Most states allow online sales with in-person pickup or local delivery since these count as direct sales to consumers. However, shipping products through the mail or commercial carriers is prohibited in most states. 

Notable exceptions include Alabama (allows interstate shipping), California (allows in-state shipping), and North Dakota (allows mail delivery as of 2025). 

Minnesota will allow shipping starting in 2027. Check your specific state’s cottage food laws regarding online sales and shipping before listing products on websites or platforms.

What is a cottage food license?

A cottage food license (also called a cottage food permit or registration) is state authorization to prepare and sell certain low-risk foods from your home kitchen without needing a commercial food establishment license. 

These licenses specifically exempt you from commercial kitchen requirements while allowing direct sales to consumers of approved non-potentially hazardous foods like baked goods, jams, and candies. 

Requirements vary by state—some require formal permits with inspections, others need simple registration, and some states require no license at all beyond proper labeling.

What foods cannot be sold under cottage food laws?

Generally prohibited items include anything requiring refrigeration (cream pies, custard-filled pastries, buttercream frosting), all products containing meat, poultry, or seafood, low-acid canned vegetables, fresh-cut fruits and vegetables, dairy products like cheese and yogurt, raw milk products, and frozen desserts. However, eight states (California, Iowa, Montana, North Dakota, Oklahoma, Utah, Wyoming, and Texas as of September 2025) now allow certain refrigerated TCS foods with additional requirements. Specific prohibited items vary by state, so check your state’s Department of Health cottage food regulations for the complete allowed and prohibited foods list.