Alabama Cottage Food Law: Labeling, Sales, and Licensing

The Alabama cottage food law lets you make and sell certain shelf-stable homemade foods directly to consumers in the state without a commercial kitchen, a state food service permit, or a limit on how much you can earn. You do need an approved food safety certificate, proper labels on every product, and sales that stay direct-to-consumer and inside Alabama. A 2021 amendment removed the former $20,000 annual sales cap, added new permitted foods, and allowed statewide delivery for the first time.¹

Foods You Can Sell

Alabama Code 22-20-5.1 defines cottage food as non-potentially hazardous food prepared in a home kitchen that does not need refrigeration or temperature control to stay safe. The statute lists seven categories:²

Baked goods, including cakes, breads, pastries, donuts, Danish, and pies.
Jams, jellies, and fruit preserves.
Candy.
Dried and dehydrated herbs, herb mixes, vegetables, and fruits.
Roasted coffee.
Dried baking mixes.
Fermented or preserved vegetables and fruit that do not produce alcohol and meet acidity levels set by the Alabama Department of Public Health.

The fermented and preserved category was added in the 2021 amendment. Sauerkraut, pickled okra, and similar items qualify as long as the acidity stays within the department’s limits and no alcohol is produced.²

What Falls Outside the Law

Anything that needs temperature control, and any product containing meat, poultry, or fish, is excluded.² That rules out cream-filled pastries, cheesecakes, custards, and other dairy-based items; jerky, smoked fish, and anything else with meat or seafood; beverages of any kind, including homemade sodas, juices, and kombucha; and products that require refrigeration such as fresh salsas, salad dressings, and cream-based sauces.

Products containing alcohol are also excluded, which reaches vanilla extract and liqueur-infused baked goods. Dietary supplements, CBD-infused foods, and anything marketed with health claims fall entirely outside the cottage food framework. Pet treats are not covered either; commercial pet food and treats are regulated by the Alabama Department of Agriculture and Industries and require separate licensing.

Where and How You Can Sell

All sales must be direct to the consumer and within Alabama. You can sell in person at farmers markets, roadside stands, or your front door, and you can take orders by phone or online. Since 2021, you can also deliver anywhere in the state by mail, by hand, or through someone acting on your behalf.¹

What you cannot do is sell to restaurants, grocery stores, or any other retailer for resale. The direct-to-consumer requirement is strict. Shipping across state lines also takes you out of the cottage food framework and into federal FDA or USDA jurisdiction, which requires a licensed commercial facility. Keep your sales inside Alabama.

What Your Labels Must Say

Every product needs a label with specific information, all printed in at least 10-point font. The statute requires:²

The common name of the food, such as “Strawberry Jam” or “Chocolate Chip Cookies.”
Your name or business name.
Your home address or a P.O. Box.
A complete ingredient list in descending order by weight, including sub-ingredients.
A statement that the food may contain allergens.
A statement that the food is not inspected by the Health Department.

Alabama Department of Public Health guidance recommends going beyond the generic allergen disclaimer and naming which of the nine major federal allergens are present: wheat, soy, eggs, milk, peanuts, tree nuts (with the type specified), fish (with the type specified), shellfish, and sesame.³ Sesame became the ninth major allergen under the federal FASTER Act on January 1, 2023.⁴

Food Safety Certification

Before you sell anything, you must complete and pass a food safety course approved by the Alabama Department of Public Health. Two types qualify: the course developed for cottage food operators by the Alabama Cooperative Extension System, or any food safety program accredited by the American National Standards Institute (ANSI). ServSafe and comparable nationally recognized programs fall in that second category.¹

Your certification has to stay current. When it expires, retake the course before continuing to sell. Keep the certificate accessible; the local health department may ask to see it, and you will likely need it when applying for a local business license.¹

Local Licensing, Zoning, and HOA Rules

The cottage food law does not require a state food service permit.² Your city or county, though, will most likely require a business privilege license, with fees and application steps that vary by municipality. Your county health department can provide written confirmation that your food safety certificate and labels have been reviewed, and many municipalities ask to see that document before issuing the license.¹

Zoning trips up more new producers than anything else. State law lets you cook and sell from home, but your local zoning ordinance may restrict commercial activity in residential areas. Call your city or county planning office before you invest in equipment or inventory and ask whether a home-based food business is a permitted use in your zone. Some municipalities require a home occupation permit.

If your neighborhood is governed by a homeowners association, read the covenants carefully. HOA rules often limit lots to residential use or ban commercial activity outright, and those private restrictions can block you even when state law and local zoning allow the business.

Inspections and Enforcement

Cottage food kitchens are not subject to routine health department inspections, because you are not operating under a food service permit. The Alabama Department of Public Health can still step in when there is a problem. It has authority to issue a stop-sale order, seize product, or place a hold on food suspected of causing illness.² A consumer complaint can trigger a review of your certification, your labels, and your preparation area.

Selling food outside the permitted categories, operating without a valid food safety certificate, or failing to label correctly can all bring enforcement action. Producers who sell prohibited items without proper licensing may face fines or further legal action. And if a customer gets sick and traces it to your product, you can face civil liability for medical costs and damages whether or not the state takes administrative action.

Taxes on Cottage Food Income

Cottage food revenue is taxable income. The IRS treats you as a self-employed individual, so you report revenue and expenses on Schedule C of your federal return. If your net earnings from the business exceed $400 in a year, you also owe self-employment tax, which covers Social Security and Medicare at a combined 15.3%.⁵ Half of that tax is deductible on your personal return.

Ordinary business expenses reduce your taxable income: ingredients, packaging, labels, market booth fees, and liability insurance premiums. If you use part of your kitchen exclusively and regularly for the business, you may qualify for the home office deduction.⁶ Mileage to farmers markets and delivery drop-offs is deductible at 72.5 cents per mile for 2026.⁷

On the state side, Alabama taxes most food sold at retail. As of September 1, 2025, the state sales tax rate on food dropped to 2%, down from 3%.⁸ County and city sales taxes stack on top, and the combined rate varies widely. Check with the Alabama Department of Revenue and your municipality to confirm your total rate and whether you need to register for a sales tax account.

Insurance and Business Structure

Standard homeowners policies almost always exclude liability tied to business pursuits, and that exclusion is generally read broadly enough to reach any recurring activity done for financial gain. A customer who sues after getting sick from your product would likely find no coverage under your homeowners policy. Product liability coverage aimed at small food producers typically runs between $800 and $1,400 per year, which is modest against a foodborne illness claim that can reach five or six figures in medical bills and legal fees.

Business structure matters too. If you do nothing to formalize the business, you operate as a sole proprietorship by default, and your personal assets are exposed to any lawsuit. Forming a limited liability company separates business obligations from personal property. An LLC is not absolute protection; it will not shield intentional fraud, and mixing business and personal money can destroy the shield entirely. It still adds a layer of defense that a sole proprietorship does not have.

1
Alabama Department of Public Health. Cottage Food Law 2021 Update – FAQs
2
Alabama Legislature. Alabama Code 22-20-5.1 (2025) – Cottage Food Production
3
Alabama Department of Public Health. Alabama Cottage Food Law Information
4
U.S. Food and Drug Administration. The FASTER Act: Sesame Is the Ninth Major Food Allergen
5
Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes)
6
Internal Revenue Service. Instructions for Schedule C (Form 1040)
7
Internal Revenue Service. IRS Sets 2026 Business Standard Mileage Rate at 72.5 Cents Per Mile
8
Alabama Department of Revenue. State Sales and Use Tax Rate Reduced on Food Beginning September 1, 2025