North Carolina’s cottage food law lets you make and sell shelf-stable, low-risk foods from your home kitchen with no annual revenue cap, once you pass a home inspection by the North Carolina Department of Agriculture and Consumer Services (NCDA&CS). The program is run by the Food and Drug Protection Division, and it rewards operators who stick to safe products, label them properly, and keep their kitchen free of indoor pets. The rules are more generous than many states on where and how much you can sell, but they are strict about a few things that catch people off guard.
What You Can and Can’t Make
Only shelf-stable foods qualify. These are products that stay safe at room temperature without refrigeration or freezing.1NC Agriculture. Food and Drug – Food Program – Home Processor In practice that covers baked goods like breads, cookies, and muffins, along with fruit preserves, certain candies, and dried mixes. The NCDA&CS evaluates products based on water activity and pH, generally requiring a pH of 4.6 or below for acidified foods.
What you cannot produce under the home processing program:
- Cream-filled baked goods, cheesecakes, custard pastries, and anything with cream cheese filling
- Home-canned low-acid foods, including canned vegetables and jarred fruits, which carry botulism risk
- Meat and poultry products, which fall under separate USDA inspection requirements
- Anything that needs refrigeration to stay safe
If you’re unsure about a specific recipe, the NCDA&CS will evaluate it before you apply. That’s worth doing early rather than going through the whole process for a product that won’t qualify.1NC Agriculture. Food and Drug – Food Program – Home Processor
Who Can’t Qualify: The Pet Rule and Other Home Requirements
Your production kitchen must be inside your private residence. A converted garage, basement, or detached outbuilding doesn’t qualify under the home processing program and would instead be treated as a commercial operation with different requirements.1NC Agriculture. Food and Drug – Food Program – Home Processor
No Indoor Pets
This is where most applicants hit a wall. If you have a pet that enters your home at any time, even just to sleep at night, you cannot operate a home food processing business. The NCDA&CS enforces this as a violation of federal Good Manufacturing Practices under 21 CFR 117 Subpart B, and there is no workaround for shutting the pet in another room during production.1NC Agriculture. Food and Drug – Food Program – Home Processor Outdoor-only animals that never come inside do not disqualify you. If your dog or cat crosses the threshold even once, the inspector will flag it.
Water Source Verification
You need to prove your water supply is safe. For a municipal or city system, a copy of your most recent water bill establishes the source; if your bill is paid through a leasing office or HOA, a letter from them works. Private well users must submit laboratory test results for coliform bacteria and E. coli dated within one year of the application.1NC Agriculture. Food and Drug – Food Program – Home Processor
Facility Standards and Zoning
Surfaces and equipment in the production area must be smooth, easily cleanable, and able to hold up to frequent sanitation. Adequate lighting and ventilation are expected. Separate from the kitchen itself, you’ll need to check with your local county or city planning department to confirm that running a food business from your home complies with zoning. Some jurisdictions require a home occupation permit, and the rules vary significantly from one municipality to the next.1NC Agriculture. Food and Drug – Food Program – Home Processor
Getting Inspected
Submit a Home Processor Application to the NCDA&CS Food and Drug Protection Division by email at homeprocessing@ncagr.gov or by mail. Include your water source verification, product details, and the other materials listed on the application. The NCDA&CS advises allowing six to eight weeks for processing from the date of submission.2North Carolina Department of Agriculture and Consumer Services. Application for Home Food Processor
Once your application clears review, a Food Regulatory Specialist contacts you to schedule an on-site inspection. The inspector checks that your production area meets sanitation standards, confirms your water source documentation, and verifies that you understand basic food safety practices. There is no fee for the inspection.
The NCDA&CS does not issue a formal permit. Instead, the inspector leaves you with a copy of the inspection report and a Notice of Inspection, which together serve as your proof of authorization to produce and sell.3NC State Extension. NCDA&CS Food Program – Home Processing Focus
Labeling Your Products
Every product you sell must carry a label with:1NC Agriculture. Food and Drug – Food Program – Home Processor
- The product name, written as a clear common name
- Your name and physical home address as the manufacturer
- Net weight in both ounces or pounds and the gram equivalent
- A complete ingredient list in descending order of predominance by weight
For multi-component ingredients, every sub-ingredient appears in parentheses immediately after the main ingredient name. Federal regulations also require the net quantity statement to sit within the bottom 30 percent of the principal display panel.4GovInfo. 21 CFR 101.105
Allergen Disclosure
Federal law requires you to disclose all major food allergens, either within the ingredient list or in a separate “Contains” statement right after it. There are now nine: milk, eggs, tree nuts (specifying the type), wheat, soy, peanuts, sesame, fish (specifying the species), and shellfish.1NC Agriculture. Food and Drug – Food Program – Home Processor Sesame became the ninth allergen effective January 1, 2023.5Food and Drug Administration. The FASTER Act – Sesame Is the Ninth Major Food Allergen Missing an allergen on your label is a serious labeling violation and a real source of liability.
Nutrition Facts Panels
Most cottage food operators are exempt from providing a full Nutrition Facts panel. Under federal regulations, businesses with fewer than 100 full-time equivalent employees that sell fewer than 100,000 units of a product annually can claim a small-business exemption, provided they file an annual notice with the FDA.6eCFR. 21 CFR 101.9 If you make any nutrient content claim on your packaging, such as “low fat” or “sugar free,” a Nutrition Facts label becomes mandatory regardless of your size.1NC Agriculture. Food and Drug – Food Program – Home Processor For most home processors, the simplest path is to skip the health claims entirely.
Where and How You Can Sell
North Carolina gives cottage food producers broad flexibility in sales venues. You can sell directly to consumers at farmers’ markets, roadside stands, special events, and from your home. Wholesale to restaurants and retail stores such as grocery shops is also allowed.1NC Agriculture. Food and Drug – Food Program – Home Processor Many states restrict cottage food to direct-to-consumer transactions; North Carolina does not.
Online sales are permitted, but only to buyers inside North Carolina, and you must deliver the product directly to the buyer. Shipping across state lines is not an option. Non-inspected home-processed foods generally can’t cross state borders under federal food safety rules, so if you set up a website, your ordering system should limit sales to North Carolina addresses.1NC Agriculture. Food and Drug – Food Program – Home Processor
There is no annual revenue cap. Many states limit cottage food sales to $25,000 or $50,000 per year, but North Carolina imposes no ceiling. Your growth is limited only by demand and your kitchen’s capacity.
Registering the Business and Collecting Sales Tax
Assumed Business Name
If you plan to sell under any name other than your personal legal name, North Carolina law requires you to file an assumed business name certificate with the register of deeds in the county where you operate. Filing in one county covers you statewide if you sell in more than one.7North Carolina General Assembly. North Carolina General Statutes Chapter 66 Article 14A – Assumed Business Name Act Filing fees run around $26 depending on the county.
Sales Tax
Food sold in North Carolina is subject to a reduced 2% local sales and use tax rate.8North Carolina Department of Revenue. Food, Non-Qualifying Food, and Prepaid Meal Plans Register for a sales and use tax certificate with the North Carolina Department of Revenue before you start selling. Registration is free and done online through the NCDOR website. The department doesn’t contract registration out to anyone, so skip third-party sites that charge for the service.9North Carolina Department of Revenue. Sales and Use Tax Registration
Federal Tax ID
A sole proprietor with no employees can generally use a Social Security number for federal taxes. You’ll need an Employer Identification Number from the IRS if you hire employees, form an LLC or partnership, or owe certain excise taxes. Even when not required, some home processors get an EIN to keep their SSN off business paperwork and to open a business bank account.10Internal Revenue Service. Employer Identification Number
What Happens If You Break the Rules
Violating any provision of North Carolina’s Food, Drug and Cosmetic Act, or any regulation adopted under it, is a Class 2 misdemeanor. If you keep violating the law after receiving written notice from the Commissioner or a designated agent, each additional day of noncompliance can be charged as a separate offense.11North Carolina General Assembly. North Carolina General Statutes Chapter 106 Article 12 – Food and Drug Violations
The Commissioner can also impose civil penalties of up to $2,000 per violation. In setting the amount, the Commissioner considers how serious the harm was and whether the operator had training and management practices aimed at compliance. You’re usually given written notice and time to correct the problem first, but that grace period does not apply when the violation is likely to cause injury or illness.11North Carolina General Assembly. North Carolina General Statutes Chapter 106 Article 12 – Food and Drug Violations
A Note on Liability Insurance
North Carolina does not require home food processors to carry liability insurance. Operating without it is a gamble experienced cottage food sellers rarely take. A single allergic reaction claim can generate tens of thousands of dollars in legal costs even if you win, and homeowner’s policies almost always exclude business activities conducted from the home.
General liability policies written for home food businesses typically cost between $200 and $500 per year, depending on revenue and coverage limits. Many farmers’ markets require proof of at least $1 million in general liability coverage as a condition of selling there, so if markets are part of your plan, you may need the policy regardless. Home business endorsements added to an existing homeowner’s or renter’s policy are cheaper, but they usually carry low coverage limits and may explicitly exclude food production.