Texas Cottage Food Laws: Revenue Cap, Labeling, and Sales Rules

Texas cottage food law lets you make and sell most foods from your home kitchen without a commercial license or health inspection, as long as your annual gross revenue stays under $150,000. Senate Bill 541, which took effect September 1, 2025, rewrote the program: nearly every food is now allowed, refrigerated items are permitted for the first time (with registration), the revenue cap tripled, and a new “cottage food vendor” category lets another person resell your products.¹

What You Can and Cannot Sell

SB 541 flipped the old approach. The state used to list the specific foods you were allowed to make. Now you can sell virtually any food from your home kitchen, with a short list of prohibited categories. If something is not on the banned list, you can sell it.

You still cannot sell any of the following:

Meat and poultry, including beef, pork, chicken, turkey, and products made from them
Seafood, including fish, shellfish, and related products
Ice and frozen treats, including shaved ice, ice cream, frozen custard, popsicles, and gelato
Low-acid canned goods with a pH above 4.6
Any food containing CBD or THC
Raw milk and raw milk products

Everything else is fair game. That covers the traditional staples like cookies, cakes, breads, jams, pickles, granola, roasted coffee, and dried herbs, and it now extends to items that need refrigeration, such as cream-filled pastries and custard pies, which were previously off-limits.¹

The $150,000 Revenue Cap

Your cottage food operation’s annual gross revenue cannot exceed $150,000. Gross revenue means all income before expenses, so every dollar coming in counts, not just your profit.¹

If sales cross $150,000, you no longer qualify as a cottage food production operation. At that point you would need to move into a licensed commercial kitchen, obtain a retail food establishment permit, and comply with health department inspections. Track your revenue throughout the year, because tripping the threshold mid-year creates compliance problems you want to avoid.

Refrigerated Foods and DSHS Registration

One of the biggest changes under SB 541 is that cottage food operators can now sell foods that require refrigeration, known officially as time and temperature control for safety (TCS) foods. Cream cheese frosting, custard-filled pastries, quiche, and cheese dips are examples. Before September 2025, selling any of these from a home kitchen was flatly illegal.¹

Selling TCS foods brings extra requirements that do not apply to shelf-stable products:

You must register with the Texas Department of State Health Services (DSHS) before selling any TCS food. Registration opened September 1, 2025.
Cold TCS foods must stay at or below 41°F, and hot items must stay at or above 135°F, from storage through delivery.
The label must include the production date and safe handling instructions in at least 12-point font reading: “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 consumers. You cannot wholesale them to cottage food vendors or donate them.

If you stick to shelf-stable items like cookies, breads, jams, and jerky-style snacks, you do not need to register with DSHS at all.¹

Where and How You Can Sell

You can sell cottage food products directly to consumers at farmers’ markets, farm stands, fairs, your own home, or online. Internet and phone orders are allowed, but you must deliver the product yourself within Texas rather than shipping it through a third-party carrier.¹

The New Cottage Food Vendor Channel

SB 541 opened a second sales channel. A “cottage food vendor” is someone in Texas who has a contract with you, buys your products at wholesale, and resells them directly to consumers. Vendors can sell at farmers’ markets, farm stands, food service establishments, and retail stores. Both you and the vendor must register with DSHS, and the vendor must display a sign disclosing that the food was made in a private home.¹

This is a meaningful expansion. Under the old law, selling to any retailer or restaurant was off-limits. Your non-TCS products can now reach store shelves through a registered vendor. TCS foods still cannot be wholesaled and must go directly from your kitchen to the consumer.

Labeling and Packaging

Every product you sell must be packaged to prevent contamination. If an item is too large or bulky for conventional packaging, you can skip the package but must provide the required label information on an invoice or receipt instead.²

Every label must include your operation’s name and physical address. If you register with DSHS, you can use a unique identification number instead of your home address, which is a welcome privacy option SB 541 added. The label must also carry this disclosure statement: “THIS PRODUCT WAS PRODUCED IN A PRIVATE RESIDENCE THAT IS NOT SUBJECT TO GOVERNMENTAL LICENSING OR INSPECTION.”²

TCS foods also need the production date and the safe handling statement described earlier.

Allergen Disclosure

Federal law requires packaged food labels to identify the nine major allergens: milk, eggs, fish, shellfish, tree nuts, peanuts, wheat, soybeans, and sesame. Sesame was added in 2023 under the FASTER Act, and cottage food products are not exempt. If any of these appears in your recipe, list it clearly on the label.

Food Handler Certification

Texas requires every cottage food operator to complete an accredited food handler training course before selling. Courses are widely available online and typically cost between $10 and $20. Keep the certificate on file. You don’t need to submit it anywhere, but you must be able to produce it if questions come up.

Training covers hand hygiene, cross-contamination prevention, and safe storage temperatures. If you plan to sell TCS foods, pay close attention to the temperature-control sections, because maintaining the 41°F cold chain from your kitchen to the customer is your legal responsibility.

Pickles, Ferments, and Acidified Canned Foods

If you sell pickles, fermented vegetables, or plant-based acidified canned goods, the finished product must have an equilibrium pH of 4.6 or below. That acidity level prevents the growth of dangerous bacteria, including the one that causes botulism.³

You have three ways to meet the requirement: use a recipe tested by a certified laboratory confirming the pH stays at or below 4.6, use a recipe approved by a qualified process authority, or test each batch yourself with a calibrated pH meter. The third option gives you the most flexibility for new recipes, but a calibrated meter and the discipline to test every batch are non-negotiable. A pH just slightly above 4.6 in a sealed jar can create conditions for toxin production that you cannot see, smell, or taste.³

Sales Tax

Not everything you sell is tax-free. In Texas, bakery items like cakes, cookies, pies, and breads are generally exempt from sales tax when sold without plates or eating utensils. Candy, snack mixes, and similar items are typically taxable. If every product you sell is exempt, you are not required to get a Sales and Use Tax Permit from the Texas Comptroller. If you sell even one taxable item, you need the permit and must collect and remit sales tax on those products. When in doubt, check the Comptroller’s listings for the specific category, because the line between “bakery item” and “snack” is not always obvious.

Local Rules, Zoning, and HOAs

SB 541 put strong guardrails around local interference. No local health department, city, or county can regulate food production at a cottage food operation, require a local permit or license, or charge a fee to produce or sell cottage foods. The statute even provides that a local health department cannot keep employing someone who knowingly tries to force a cottage food operation to get a license in violation of the law.¹

That protection does not reach everything. Zoning ordinances restricting commercial activity in residential areas can still apply, and homeowners’ associations often have bylaws limiting customer traffic, signage, or commercial use of property. Review your HOA covenants before advertising pickup hours at your front door.

Insurance and Liability

Most standard homeowners insurance policies exclude business activities from both property and liability coverage. If a customer gets sick from something you sold and sues you, your homeowners policy will likely deny the claim. If a kitchen fire during production destroys equipment you use for the business, that loss may not be covered either.

Talk to your insurance agent before you start selling. Some carriers offer endorsements or riders that extend homeowners coverage to small home-based businesses; others will steer you toward a separate business liability policy. The cost is modest compared with the exposure.

Operating as a sole proprietor also means there is no legal separation between you and your business. If someone sues your cottage food operation, your personal assets are reachable. Forming a limited liability company creates a legal barrier between business debts and your personal property, though it does not protect you from liability for your own negligence. For anyone selling food to the public, the liability question is worth taking seriously before the first batch goes out the door.

1
Texas DSHS. Texas Cottage Food Production
2
State of Texas. Texas Code Health and Safety Code 437.0193 – Packaging and Labeling Requirements for Cottage Food Production Operations
3
Texas Legislature Online. Texas Senate Bill 572 – Relating to the Regulation of Cottage Food Production Operations