Freshly baked homemade cookies cooling on a wire rack

Selling Home-Baked Goods: What to Know About Cottage Food Laws

ByRuth Abernathy

If friends always ask for your pound cake or your jam, you may wonder if you could sell it. In many places you can, thanks to what are called cottage food laws. These state laws let people make certain foods in their home kitchen and sell them, without renting a commercial kitchen.

The rules are different in every state, so the first step is not baking. It is reading.

What cottage food laws usually cover

Cottage food laws generally cover foods that are not likely to spoil quickly or grow harmful bacteria. The National Agricultural Law Center gives examples like baked goods, jams, dry mixes and candies. Foods that need to stay cold, such as cream pies or cheesecake, are often left out.

A 2022 report by the Institute for Justice, a group that pushes for looser rules, looked at every state. A few of its findings show how much the rules differ:

  • Every state had some kind of cottage food law.
  • 25 states capped how much you could sell in a year. The caps ranged from $3,000 (for pickled foods in Virginia) to $250,000 (Florida and Wyoming).
  • 19 states limited sellers to an approved list of foods.
  • 8 states did not allow online sales, and 15 did not allow shipping by mail.
  • 6 states and Washington, D.C., required inspections and a license before you could start.

Laws change, and some states have updated theirs since then. Always check your own state’s current rules.

How to find your state’s rules

  1. Go to the National Agricultural Law Center’s cottage food page.
  2. Click your state on the map. It links to your state’s law.
  3. Look for: which foods are allowed, whether you need a permit or class, what the label must say, any yearly sales limit, and where you may sell (farmers markets, from home, online).
  4. If anything is unclear, call your state or county health or agriculture department. Ask them to confirm by email.

Pricing your baked goods

Add up ingredients, boxes, bags and labels for one batch. Divide by the number of items. Then add something for your time and your oven. Market table fees and card fees come off the top too, so a price that feels “a bit high” is often just right.

Start small. One kind of cookie or bread, done well, is easier to plan than ten. A steady weekly order from a few neighbors might cover a modest bill, like a streaming plan, though results vary with your area and your prices.

Taxes and benefits

Food sales are income. The IRS explains how to tell a hobby from a business, and either way the income should be reported. If you get Social Security before full retirement age, there is an earnings limit. Earnings can also count for SSI, Medicaid and housing help. This is general information, so check your own situation.

A quick safety note

Heavy mixing bowls, hot trays and long hours standing add up. Bake in smaller batches, use oven mitts that reach your forearms, and sit down while you decorate or pack.

Sources

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