Texas Cottage Food Law: Labeling, Sales Limits, and Venues

Texas cottage food law lets you make and sell a wide range of foods from your home kitchen without a commercial food permit, and after the 2023 overhaul in Senate Bill 541 (full compliance required by September 1, 2025), the rules are far more permissive than most online guides still describe.¹ The annual revenue cap rose from $50,000 to $150,000, wholesale became legal for the first time, and foods that need refrigeration are now allowed. The framework lives in Chapter 437 of the Texas Health and Safety Code.

What You Can and Can’t Sell

The old approved-list approach is gone. You can now sell almost any food you make at home, with a short list of exceptions.¹ The prohibited categories are:

Meat and poultry, and any products made from them
Fish, shellfish, and other seafood products
Ice and frozen desserts, including shaved ice, ice cream, frozen custard, popsicles, and gelato
Low-acid canned goods such as canned green beans or corn that don’t meet the 4.6 pH threshold
CBD and THC products
Raw milk and raw milk products

Everything else qualifies. The familiar categories still work — breads, cookies, cakes, jams, jellies, pickled vegetables, roasted coffee, popcorn, granola, nut butters, dried herbs, candy, dried fruits — and so do items that were previously off-limits. Pickled products and fermented vegetables still have to finish at a pH of 4.6 or lower, and each batch needs a unique number printed on its label.¹

Selling Foods That Need Refrigeration

This is the biggest practical change. Cottage food operators can now sell foods that require time and temperature control for safety (TCS foods) — cream-filled pastries, quiche, cheesecake, and similar items that previously demanded a commercial kitchen. The categorical ban on anything requiring refrigeration is gone, though the prohibited list above still applies.¹

Selling TCS foods comes with extra duties. You must register with the Department of State Health Services before you sell any temperature-sensitive item. Cold foods have to stay at 41°F or below and hot foods at 135°F or above, from your kitchen through delivery. The label must carry the production date and a safe-handling statement in at least 12-point font: “SAFE HANDLING INSTRUCTIONS: To prevent illness from bacteria, keep this food refrigerated or frozen until the food is prepared for consumption.” TCS foods can only be sold directly to the end consumer; wholesale is not allowed for these items.¹

Who Can Operate, and What Training You Need

A cottage food production operation can be run by an individual working from their own home, or by a nonprofit operating out of the home of a director or officer.¹ “Home” means a primary residence with a kitchen built for normal household use. A commercial kitchen, a rented prep space, or a church fellowship hall does not count.

Every operator needs a valid food handler’s certificate from a program accredited by DSHS.¹ The courses are short and inexpensive — a couple of hours online, around $15.² If you already hold a food manager certification, DSHS accepts that in place of the basic certificate.

Cottage food kitchens are not inspected on any routine schedule. A health department can only investigate after someone files a complaint about illness or labeling. Administrative penalties still apply for violations, so operating within the rules matters whether or not an inspector ever appears.

Labeling Your Products

Every item you sell has to carry a label with specific information, whether you sell at a farmers’ market, deliver a custom cake, or wholesale cookies to a registered vendor. The label must include:

The name of your cottage food business
Your address, or the DSHS registration number you can use in its place (registration opened September 1, 2025)
The common name of the product
Any major food allergens: eggs, tree nuts, peanuts, soy, milk, wheat, and sesame
The disclaimer, “THIS PRODUCT WAS PRODUCED IN A PRIVATE RESIDENCE THAT IS NOT SUBJECT TO GOVERNMENTAL LICENSING OR INSPECTION”

The registration number is a meaningful privacy improvement. Under the old rules, your home address went on every jar of jam you brought to the market. Now the DSHS registry gives the state a way to trace products back to you without forcing you to print your address on your packaging.¹

Pickled products, fermented vegetables, and plant-based acidified canned goods also need a unique batch number on each label. If you sell online, all required labeling information has to appear on your website before the customer pays, and the physical label still travels with the product at delivery.¹

Where You Can Sell and How Much You Can Earn

You can sell cottage food at farmers’ markets, at farm stands, from your home, and online. For online and mail orders, you or a member of your household must personally deliver the food to the buyer. Shipping through UPS, FedEx, or USPS is not allowed. Every sale and delivery has to happen within Texas; crossing state lines pulls you into federal food safety rules that cottage food operations are not built to meet.¹

Your gross revenue from cottage food sales cannot exceed $150,000 per year.¹ If you cross that line, you have to transition to a licensed commercial food operation. Keep careful sales records; if anyone ever questions your status, documentation that you stayed under the cap is what settles it.

Wholesale to Registered Vendors

Selling cottage food to a store or other vendor for resale used to be flatly prohibited. Not anymore. You can now wholesale non-TCS cottage foods to a “cottage food vendor” — someone in Texas who has a contractual relationship with you and sells your products directly to consumers on your behalf.¹ The wholesale route carries a few conditions:

TCS foods cannot be sold wholesale, only direct to the consumer
The vendor buying your products has to register with DSHS
Wholesale labels must show the production date
The vendor has to post a prominent sign near the point of sale with the same disclaimer that appears on your label

In practical terms, a local coffee shop can stock your granola, or a gift store can carry your jams, as long as the vendor registers and posts the required sign.¹

Sales Tax and Income Tax

Being homemade doesn’t make your food exempt from sales tax. What matters is what you’re selling. Most bakery items — bread, cookies, cakes, pies — sold without plates or utensils are not taxable.³ Jams, dried herbs, and nut butters also fall on the tax-exempt side.

Candy is taxable. So are snack items sold in individual-sized portions (under 2.5 ounces or labeled as a single serving). If everything you sell is tax-exempt, you don’t need a Texas sales and use tax permit. If any of your products are taxable, you need to register with the Texas Comptroller and collect sales tax.⁴ The online application takes two to three weeks to process and asks for your Social Security number.

Your cottage food income is subject to federal and state income tax too. Hold on to records of both revenue and expenses. Ingredients, packaging, the food handler’s course, and market booth fees are deductible business expenses that lower your taxable income.

Zoning, HOAs, and Business Names

State law bars Texas municipalities from using zoning ordinances to block a cottage food operation in your home, and no local government or health department can require permits or fees for producing, selling, or sampling cottage foods.¹ Your city cannot tell you that your residential zoning rules out a food business.

The protection is not unlimited. Other local ordinances still apply. If your city restricts roadside vending or regulates commercial signage in residential neighborhoods, those rules survive. Neighbors can bring nuisance complaints over excessive traffic, noise, or odors. And homeowners’ associations sit outside the state preemption; an HOA’s covenants can restrict home businesses, cottage food included. Read your CC&Rs before you invest in equipment or inventory.

If you plan to use a business name that isn’t your legal name, you need to file an assumed name certificate. Sole proprietors file with the county clerk, and the fee is typically around $25.⁵ Skipping the filing when required can carry civil and criminal penalties under the Texas Business and Commerce Code.

Liability Insurance

Texas does not require cottage food operators to carry liability insurance. Going without it is still a gamble most producers shouldn’t take. If a customer gets sick or has an allergic reaction, you are personally liable for the damages, and your homeowners’ policy almost certainly will not help; standard policies exclude claims arising from business activity in the home.

Some insurers sell endorsements that extend homeowners’ coverage to a small home business, but the protection tends to be narrow. A dedicated product liability policy for food businesses offers broader coverage and higher limits, including claims of illness or injury from food you’ve sold and property damage at a market booth. Many farmers’ markets also require proof of liability insurance as a condition of renting space, which can make a policy a practical requirement even where it isn’t a legal one.

1
Texas Department of State Health Services. Texas Cottage Food Production
2
Texas A&M AgriLife Extension Food Safety Education. Online Food Handlers Course
3
Texas Comptroller of Public Accounts. Grocery and Convenience Stores
4
Texas Comptroller of Public Accounts. Texas Online Tax Registration Application
5
Office of the Texas Secretary of State. Form 503 – Instructions for Assumed Name Certificate