The Texas cottage food law lets you make and sell certain shelf-stable foods from your home kitchen without a commercial food manufacturer’s license, as long as you stay under $150,000 in annual gross sales, sell directly to consumers in Texas, hold a food handler’s card, and label your products correctly. The framework lives in Texas Health and Safety Code Chapter 437, and it exempts qualifying home producers from the licensing and inspection rules that apply to restaurants and commercial food manufacturers.1Texas Department of State Health Services. Texas Cottage Food Production
What You Can Sell
The exemption covers foods that are shelf-stable, meaning they don’t need refrigeration to stay safe. Section 437.001 describes these as foods that are not “time and temperature control for safety” items.
In practice, that includes:
- Baked goods such as breads, cookies, cakes, and pastries
- Candy, coated or uncoated nuts, unroasted nut butters, and fruit butters
- Canned jams, jellies, and fruit pies
- Popcorn and popcorn snacks, cereal, granola, and dry mixes
- Vinegar, mustard, roasted coffee, dry tea, and dried herbs or herb blends
- Dehydrated fruits and vegetables, including dried beans
- Pickled fruits and vegetables preserved in vinegar or brine with a pH of 4.6 or below
- Plant-based acidified canned goods and fermented vegetable products (fermented items can qualify even if refrigeration is needed to preserve quality)
- Frozen raw and uncut fruits or vegetables
The statute also has a catch-all: any food that doesn’t require time and temperature control for safety is eligible. If you develop a shelf-stable product that doesn’t fit neatly into the named categories, it may still qualify, provided it genuinely doesn’t need refrigeration to prevent bacterial growth.
What You Cannot Sell
Anything that needs refrigeration or careful temperature control to stay safe is off-limits. That rules out fresh dairy, raw or cooked meats, seafood, cut fresh fruits and vegetables, and most items with cream-based fillings or frostings. If a food would sit in the danger zone between 41°F and 135°F and support harmful bacteria, it doesn’t qualify.
Alcohol is also excluded, even as an ingredient. A rum cake where the alcohol isn’t fully cooked off falls outside the cottage food framework and into Texas alcohol regulations.
The $150,000 Revenue Cap
A cottage food production operation can earn up to $150,000 in annual gross income and remain exempt.1Texas Department of State Health Services. Texas Cottage Food Production “Gross income” means total revenue from cottage food sales before expenses, not take-home profit. Cross that line and the exemption no longer applies. You’ll need to transition into a commercially licensed operation, with the inspections and equipment requirements that come with it.
The updated definition also extends eligibility to nonprofit organizations, not just individuals.1Texas Department of State Health Services. Texas Cottage Food Production
Home Kitchen and Food Handler Rules
All food production must happen in your primary residence. The statute defines “home” as a primary residence with a kitchen and appliances designed for common residential use.2Texas Legislature Online. Texas Senate Bill 81 You cannot rent time in a commercial kitchen, use a church kitchen, or produce food at any location other than the home where you actually live. A non-residential facility moves you outside the exemption and into commercial licensing.
Every cottage food producer must hold a valid food handler’s card from an accredited program.3Texas A&M AgriLife Extension Food Safety Education. Online Courses for Cottage Food Businesses The training covers safe food handling, cross-contamination, and storage. Texas A&M AgriLife Extension offers an online course designed specifically for cottage food operations, and other accredited providers offer equivalent training. The course typically costs under $20 and takes a few hours.
There is no formal inspection of your home kitchen under this exemption. That’s part of the appeal, but responsibility for safe handling falls entirely on you. Keeping production records, tracking ingredient sourcing, and maintaining a clean workspace are your main defense if a customer ever raises a food safety concern.
Labeling Requirements
Every cottage food product must carry a label before it is sold. The label has to include:
- Your full name and the physical address of the home where the food was made
- The common name of the product
- Any major food allergens present, including milk, eggs, fish, shellfish, tree nuts, wheat, peanuts, and soybeans
- The disclaimer: “This food is made in a home kitchen and is not inspected by the Department of State Health Services or a local health department.”
The disclaimer can appear on the package itself or on a card attached to larger items. Labels don’t have to be professionally printed, but the text must be legible and permanently attached. Handwritten labels are fine if they include all required information.
Federal nutrition labeling has a small-business exemption. If you have fewer than 10 full-time equivalent employees and sell fewer than 10,000 total units of a product annually, you’re generally exempt from the standard Nutrition Facts panel without needing to file a notice with the FDA.4Food and Drug Administration. Small Business Nutrition Labeling Exemption Guidance The exemption disappears the moment you put a nutrient content claim like “sugar free” or “low fat” on the label. Once you make a health or nutrition claim, standard labeling rules apply regardless of size.
Where and How You Can Sell
Cottage food products must be sold directly to the end consumer. You cannot sell wholesale to grocery stores, restaurants, coffee shops, or any retailer who would resell your products.2Texas Legislature Online. Texas Senate Bill 81 Once a middleman enters the transaction, you’re in commercial territory.
Common venues include farmers’ markets, farm stands, community fairs, and your own home. You can also sell through a personal website or social media and accept orders by phone, email, or online payment. The statute allows delivery to the consumer at the point of sale or at another location the consumer designates.5City of Eagle Pass Health Unit. Cottage Food Laws in Texas Sales and delivery must stay inside Texas. Shipping out of state is not allowed under the exemption.
Sales Tax and Business Setup
The exemption from food licensing doesn’t touch your tax obligations. Most cottage food products are subject to Texas sales tax at the point of sale. You’ll need a Texas sales tax permit from the Comptroller’s office, which is free to obtain. Farmers’ market organizers often ask to see the permit before assigning you a booth.
On the federal side, income from cottage food sales is taxable regardless of the amount. You’ll report business income and expenses on Schedule C with your personal return. Common deductible costs include ingredients, packaging, labels, the food handler’s course fee, and market booth rental.
Insurance, Liability, and Local Rules
Skipping government inspection doesn’t shield you from liability if someone gets sick. Standard homeowners policies typically exclude or sharply limit coverage for business activities run from the home. If a customer has an allergic reaction or claims food poisoning, your personal assets can be exposed. A home-based business endorsement or a standalone product liability policy can close that gap, and some farmers’ markets require proof of liability insurance before you can participate.
Forming an LLC is another step some cottage food producers take to separate business liabilities from personal assets. An LLC won’t prevent a lawsuit, but it can limit what’s at stake if one happens. Texas LLC filing fees are modest, and the annual franchise tax has a no-tax-due threshold that most cottage food operations fall well below.
Texas law preempts local health departments from imposing additional permitting or inspection requirements on cottage food operations beyond what the state statute requires.1Texas Department of State Health Services. Texas Cottage Food Production A city or county health department cannot demand a local food permit or a kitchen inspection if you’re operating within the cottage food framework.
Zoning is a separate matter. Many cities have home occupation rules covering signage, customer traffic, and parking, and some require a home occupation permit. Check with your city’s planning or zoning department before you start selling. Homeowners associations can also restrict or prohibit commercial activity in a neighborhood, and those covenants operate independently of state cottage food law. If you’re in an HOA-governed community, review your CC&Rs before you advertise your home as a pickup location or host regular sales from the property.