North Carolina’s cottage food laws let you make and sell certain shelf-stable foods from your home kitchen under a program the North Carolina Department of Agriculture and Consumer Services (NCDA&CS) calls “home processing.” Unlike many states, North Carolina sets no annual sales cap, so your revenue is not artificially limited by regulation. The program operates under the North Carolina Food, Drug and Cosmetic Act in Chapter 106, Article 12 of the General Statutes.1North Carolina General Assembly. North Carolina General Statutes Chapter 106 – Article 12
What You Can Make at Home
Only low-risk, shelf-stable foods that don’t need refrigeration or freezing are allowed. The NCDA&CS permits a wider range of products than most people expect:2NC Agriculture. Food and Drug – Food Program – Home Processor
- Baked goods that don’t require refrigeration, including cookies, cakes, and breads
- Jams, jellies, and preserves
- Candies
- Dried mixes and spices
- Iced tea, coffee, and lemonade
- Shelf-stable sauces such as balsamic dressing
- Acid and acidified foods like pickles and BBQ sauce
- Freeze-dried fruits and vegetables
High-risk foods are prohibited entirely and can only be produced in a commercially inspected facility. That prohibited list includes refrigerated or frozen products, seafood, cream-filled pastries, cheesecakes, low-acid canned goods like jarred vegetables, dairy items, and fermented foods.2NC Agriculture. Food and Drug – Food Program – Home Processor Selling anything on that list can trigger an immediate stop-sale order.
Where You Can Sell Your Products
Home processors have real flexibility here. You can sell directly to consumers from your home, at farmers markets and tailgate markets, and wholesale to retail stores and restaurants.3NC State Extension. NCDA&CS Food Program – Home Processing Focus Shipping through USPS, FedEx, or similar postal services is also allowed, which opens the door to online sales.2NC Agriculture. Food and Drug – Food Program – Home Processor
All sales must stay within North Carolina. Shipping across state lines pulls you under FDA jurisdiction and generally requires a commercial kitchen license, not a home processor authorization.
If you hand items directly to customers at a farmers market from behind a counter, individual labels may not be required on each product. You still need to have ingredient information available if a customer asks.2NC Agriculture. Food and Drug – Food Program – Home Processor
Home Kitchen Requirements
The home standards disqualify more applicants than any other part of the process, and the pet rule is the one that catches people off guard. If a pet enters your home at any time, even only at night, you cannot operate as a home processor.2NC Agriculture. Food and Drug – Food Program – Home Processor This isn’t a matter of keeping the dog out of the kitchen while you bake. Federal Good Manufacturing Practices treat pets as pests that must not be allowed in any part of a food plant, and because your whole home functions as the facility, the prohibition covers the whole house.4eCFR. 21 CFR Part 117 Subpart B – Current Good Manufacturing Practice
Food-contact surfaces must be smooth and easy to clean. Surrounding areas must be maintained to prevent contamination of food, equipment, and supplies. Running hot and cold water and accessible hand-washing and restroom facilities are required.
If your home uses a private well, a certified laboratory test showing the water is free of coliform bacteria and E. coli must be submitted with your application. The results must be dated within one year of your application.2NC Agriculture. Food and Drug – Food Program – Home Processor A basic coliform test typically costs $20 to $50.
Zoning Approval Before You Apply
Check with your local county or city planning department to confirm that a food business is allowed at your address. Many residential zones permit low-impact home businesses, but some neighborhoods, particularly those governed by homeowner association covenants, restrict or prohibit commercial activity. The NCDA&CS requires this zoning verification as part of the application package.2NC Agriculture. Food and Drug – Food Program – Home Processor
If your planning office denies you, you may be able to appeal to your city council or county board of supervisors, or seek an amendment to an overly restrictive ordinance. HOA covenants are private agreements and harder to challenge, though they must be reasonably clear and consistently enforced to be binding.
What Has to Go on the Label
Every product sold at retail, shipped through the mail, or sold wholesale must carry a compliant label with four elements:2NC Agriculture. Food and Drug – Food Program – Home Processor
- The common name of the product
- Your full name and home address as the manufacturer
- Net weight in both U.S. customary units (ounces or pounds) and metric equivalents (grams or kilograms)5FDA. Food Labeling Guide
- A complete ingredient list in descending order by weight, with all nine major food allergens identified by their common names
The allergen requirement is federal law and covers milk, eggs, fish, crustacean shellfish, tree nuts, peanuts, wheat, soybeans, and sesame. Sesame was added as the ninth major allergen by the FASTER Act, effective January 1, 2023.6FDA. Food Allergies Tree nuts and seafood must be identified by their specific species, not just the general category. Allergen errors are one of the fastest ways to draw enforcement action, and they create real liability if a customer has a reaction.
Your proposed labels must be submitted with the application so the NCDA&CS can review them before your inspection. Draft them early. Revisions at this stage are common and can delay approval.
How to Apply and Get Inspected
Download the Application for Home Processing from the NCDA&CS website and fill it out with your product and recipe details. Submit it with your proposed labels, zoning verification letter, and well-water test results if applicable. You can email the package to homeprocessing@ncagr.gov or mail it to the Food and Drug Protection Division at 4400 Reedy Creek Road, Raleigh, NC.2NC Agriculture. Food and Drug – Food Program – Home Processor
Once the paperwork clears, an inspector will schedule a visit. During the inspection they check ingredient storage, cleanliness and condition of your equipment and surfaces, and whether your labels match what you submitted. The NCDA&CS does not issue a formal permit. The inspector provides a copy of the inspection report and a Notice of Inspection, and that documentation is your authorization to begin selling. The state charges no fee for the application or inspection.
The NCDA&CS does not publish guaranteed turnaround times. The timeline depends on how complete your application is and how busy inspectors are in your region. Incomplete applications, especially those with label errors or missing zoning letters, are the most common cause of delays.
After approval, you have to keep meeting the same standards. Falling out of compliance can lead to a stop-sale order or loss of your authorization.
Insurance and Liability
Most homeowner policies contain a business exclusion that denies coverage for any loss connected to a business activity in the residence. If a customer gets sick and sues, your homeowner policy will almost certainly not cover the claim. In some cases, running a food business without telling your insurer can void the policy entirely, leaving you exposed for ordinary household claims too.
Product liability insurance built for small food businesses typically runs $800 to $1,400 per year, depending on your products, sales volume, and claims history. It is not required by North Carolina law. Some farmers markets and retail stores require proof of coverage before they’ll let you sell on their premises, so it can end up being a practical necessity anyway.
Taxes on Home Food Sales
The IRS treats home food sales as self-employment income. You report revenue and expenses on Schedule C (Form 1040) and owe self-employment tax on your net profit in addition to regular income tax.7IRS. Instructions for Schedule C (Form 1040) If your primary purpose is making a profit and you operate with regularity, the IRS considers you a business rather than a hobbyist. Hobby income is reported differently and cannot be offset by business deductions.8IRS. Here’s How to Tell the Difference Between a Hobby and a Business for Tax Purposes
Deductible expenses commonly include ingredients, packaging, labels, liability insurance premiums, farmers market booth fees, and mileage for deliveries or supply runs. If part of your kitchen is used exclusively and regularly for the business, you may also qualify for the home office deduction. The simplified method allows $5 per square foot of dedicated business space, up to 300 square feet.9IRS. Business Use of Home
Keep thorough records from day one. Tracking every ingredient purchase, market fee, and mile driven makes tax season easier and protects you if the IRS ever questions whether your operation is a real business.