Laws and Regulations

Permits, cottage food laws, and what you need to know before you sell

Cottage food laws: what they are and why they matter

Cottage food laws allow you to make and sell certain foods from your home kitchen without a commercial kitchen or food establishment license. Every state has some version of these laws, but the specifics vary dramatically.

What varies by state:

  • Revenue caps: Virginia caps at $9,000 per year. Florida caps at $250,000. Most states fall between $25,000 and $75,000.
  • Allowed products: Some states allow only baked goods. Others allow jams, candies, dried goods, and more.
  • Where you can sell: Farmers markets, online, direct to consumers, or wholesale to stores.
  • Labeling requirements: Allergen warnings, "made in home kitchen" disclaimers, net weight, and producer contact info.
  • Permits and fees: Some states require registration. Others have no requirements at all.

State-by-state resources

These are the best free resources for finding your state's specific cottage food rules:

Forrager

The most user-friendly database. Rates each state's laws, lists allowed foods, sales caps, and requirements. Start here.

National Agricultural Law Center

Academic/legal compilation with an interactive map linking to actual statutes. When you need the official legal language.

Farm-to-Consumer Legal Defense Fund

Comparison chart showing requirements, inspections, and labeling by state. Good for side-by-side comparisons.

CottageFoodLaws.com

Practical state-by-state rules with tips and links. Written for sellers, not lawyers.

Institute for Justice

Tracks recent state reforms and expansions of food freedom laws. Useful if you want to know what is changing.

Food handler certifications

Some states require food handler certification for cottage food operations. Even if your state does not require it, the training is valuable. It covers safe food handling, temperature control, allergen awareness, and contamination prevention.

ServSafe is the premier nationally recognized food handler program. The course takes 60-90 minutes online, includes a 40-question assessment, and the certificate is valid for three years. Many states require either ServSafe or an equivalent ANSI-accredited program.

FDA rules for small sellers

The FDA regulates food labeling and safety at the federal level, but there are important exemptions for small sellers:

Food facility registration exemption

Private residences making FDA-regulated food are exempt from food facility registration. You do not need to register your home kitchen with the FDA. The FDA startup guide for food businesses explains this and other requirements.

Nutrition Facts exemption

Most small sellers qualify for the Small Business Nutrition Labeling Exemption:

  • Fewer than 10 employees AND fewer than 10,000 units sold per year: automatically exempt, no filing required.
  • Under 100 employees AND under 100,000 units: must file FDA Form 3570 annually for the exemption.

Labeling requirements that still apply

Even with the Nutrition Facts exemption, you still need:

  • Product name
  • Net quantity (weight or count)
  • Ingredient list (in descending order by weight)
  • Allergen declaration (the "big 9": milk, eggs, fish, shellfish, tree nuts, peanuts, wheat, soybeans, sesame)
  • Name and address of manufacturer or distributor

The FDA Food Labeling Guide covers all required label elements in detail.

Business registration and structure

The SBA's 10 Steps to Start Your Business guide walks you through everything from choosing a business structure to registering your business to applying for permits.

Choosing a structure

Most side sellers start as sole proprietors (no paperwork required). The SBA business structure comparison explains the differences between sole proprietorship, LLC, partnership, and corporation in plain language.

Getting an EIN

An Employer Identification Number is free and takes about five minutes to get from the IRS website. You need one if you form an LLC or hire employees. Even as a sole proprietor, it is useful for opening a business bank account and keeping your SSN off invoices.

Licenses and permits

The SBA licenses and permits guide helps you find requirements specific to your state and industry. Some localities require a general business license even for home-based businesses. Check before you start selling.

Sales tax basics

Forty-five states plus DC impose sales tax. Sellers are generally required to collect and remit it on taxable sales. The rules for what is taxable (food is often exempt or taxed at lower rates), when you need to collect, and how to file vary by state.

States with no sales tax

Five states have no state sales tax: Delaware, Montana, New Hampshire, Oregon, and Alaska. Note that Alaska allows local jurisdictions to impose their own sales taxes, so check your specific location.

Registering for sales tax

If you sell in a state with sales tax, you typically need to register with your state's Department of Revenue before collecting. Search "[your state] sales tax registration" to find the official portal.

If you sell in multiple states (online sales, craft fairs in other states), the Streamlined Sales Tax Registration System allows free multi-state registration in participating states.

Marketplace facilitators

Platforms like Etsy and Amazon collect and remit sales tax on behalf of sellers in most states. However, the seller remains responsible for compliance. Verify what your specific platform handles and what you need to handle yourself.

Insurance considerations

Insurance is not legally required for most cottage food and craft sellers, but it is strongly recommended. One product liability claim can wipe out years of profits.

General liability insurance

Covers claims if someone is injured by your product, at your booth, or on your property. If someone trips over your display at a craft fair or has an allergic reaction to your food, this is what protects you. Many farmers markets and craft fairs require proof of general liability insurance to participate.

Product liability insurance

Covers claims related to defects in your products. If a candle causes a fire or a food product causes illness, this is what protects you. Often bundled with general liability for small businesses.

What to expect to pay

Policies for small sellers typically run $300-500 per year for $1-2 million in coverage. Companies like FLIP (Farmers and Livestock Insurance Program), ACT Insurance, and The Hartford offer policies designed for small food and craft businesses. Shop around and get quotes from multiple providers.

Finding your health department

When you have questions about permits, inspections, or what is allowed in your area, your state or local health department is the definitive source. The CDC maintains a directory at cdc.gov that includes state health department websites and a local health department search by zip code.

Do not guess about compliance. A five-minute phone call to your local health department can save you from fines, product seizures, or being banned from selling. They want to help you comply, not catch you breaking rules.

Related Guides

Getting Started

Your roadmap from idea to first sale

Pricing Your Products

Set prices that actually make you money

Common Mistakes

The pitfalls that trip up new sellers

Frequently Asked Questions

Do I need a business license to sell at a farmers market?
It depends on your state and what you sell. Many cottage food sellers can operate without a business license if they stay under their state's revenue cap. However, some states require a permit or registration even for cottage food operations. Check your state's specific requirements through Forrager or your state agriculture department.
Can I sell food made in my home kitchen?
Yes, in most states. Cottage food laws allow home-based food businesses to sell certain low-risk foods made in residential kitchens. The specific foods allowed, revenue caps, and labeling requirements vary dramatically by state. Forty-three states now permit online cottage food sales.
What foods can I sell under cottage food laws?
Typically: baked goods, candies, jams, jellies, dried herbs, granola, and other shelf-stable items that don't require refrigeration. Most states prohibit potentially hazardous foods like dairy-based items, meat, and anything requiring temperature control. Five states with "food freedom" laws (Wyoming, North Dakota, Utah, Oklahoma, Alaska) allow nearly any food.
Do I need to include nutrition facts on my labels?
Probably not. Businesses with fewer than 10 employees and fewer than 10,000 units sold per year are automatically exempt from Nutrition Facts requirements. Businesses with under 100 employees and under 100,000 units must file FDA Form 3570 annually for the exemption.
What about sales tax?
Forty-five states plus DC impose sales tax. Five states have no state sales tax: Delaware, Montana, New Hampshire, Oregon, and Alaska (though Alaska allows local taxes). Most sellers need to register with their state's Department of Revenue and collect tax on taxable sales. Platforms like Etsy auto-collect in many states.
Do I need insurance?
It is not legally required in most cases, but it is strongly recommended. General liability insurance protects you if a customer is injured by your product or at your booth. Product liability insurance covers claims related to defects. Many farmers markets require proof of insurance to participate. Policies for small sellers typically run $300-500 per year.
What happens if I break cottage food rules?
Violations can result in fines, being banned from selling at markets, or having your products confiscated. Serious or repeated violations could lead to legal action. The rules exist to protect public health, and enforcement varies by state. When in doubt, check with your local health department.

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