Texas Cottage Food Laws: Revenue Cap, Labels, and Sales

The Texas cottage food law lets you sell most homemade foods directly to consumers, and now to some wholesale buyers, without a commercial kitchen, health permit, or government inspection. Since SB 541 took effect on September 1, 2025, the annual revenue cap is $150,000, limited wholesale is allowed, and the list of permitted products reaches well beyond the old shelf-stable-only rule.¹ The tradeoffs are labeling, a required food handler course, and a short list of foods you still cannot make at home for sale.

What You Can and Cannot Sell

Texas now allows nearly any food you make at home, including items that need refrigeration, known as time and temperature control for safety (TCS) foods. The exclusions are narrow but firm:

Meat and poultry, including beef, pork, chicken, and turkey (eggs are not included in this prohibition)
Seafood, including fish, shellfish, and seafood-derived products
Frozen desserts and ice, including ice cream, gelato, popsicles, and shaved ice
Low-acid canned goods, such as canned green beans or corn
CBD and THC products
Raw milk and raw milk products

Everything else is on the table. Baked goods, candy, jams, jellies, roasted coffee, pickled vegetables, fermented foods like kimchi and sauerkraut, dried herbs, granola, nut butters, and perishable items like cheesecake or custard-filled pastries are all allowed, provided you follow the added labeling rules for TCS foods.¹

If you make pickled fruits, fermented vegetables, or plant-based acidified canned goods, your recipes have to come from an approved source such as the USDA Complete Guide to Home Canning or another publication recognized by DSHS.¹

The $150,000 Revenue Cap

Your cottage food operation can bring in up to $150,000 in gross annual revenue. That figure will be indexed for inflation, so it may rise in future years.¹ Go over the cap and you lose your cottage food status, which drops you into standard commercial food regulation with its permits, inspections, and potential commercial-kitchen requirement.

Keep sales records throughout the year. There is no required format. A spreadsheet with date, product, and amount is enough as long as you can show gross revenue stayed under the threshold if anyone asks. Nonprofit organizations now qualify as cottage food production operations too, as long as the food is produced at the home of a director or officer.¹

Food Handler Training

Before you sell anything, complete a food handler training program accredited under Texas Health and Safety Code Chapter 438(D). The course covers food safety, hygiene, and cross-contamination prevention.¹ Several providers deliver it online for around $15.² If you already hold a Food Manager Certification from an accredited program, DSHS accepts that instead.

What Has To Be on Every Label

Every packaged product needs a label, and missing pieces put your exemption at risk. Include:

The business name of your cottage food operation
Your home address, or a unique DSHS registration ID number if you would rather not print your address (most producers choose the ID for privacy)
The common or usual name of the product
An allergen disclosure if the food contains any of the nine major allergens: milk, eggs, fish, shellfish, tree nuts, wheat, peanuts, soybeans, or sesame³
The required disclaimer, verbatim: “THIS PRODUCT WAS PRODUCED IN A PRIVATE RESIDENCE THAT IS NOT SUBJECT TO GOVERNMENTAL LICENSING OR INSPECTION.”

Two situations add more. For TCS foods, the label also needs the date the food was made 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.” For pickled fruit, fermented vegetables, or plant-based acidified canned goods, each batch needs a unique batch number.¹

If a product is too large or bulky to package with a conventional label, you can provide the same information on an invoice or receipt instead.

Where You Can Sell and How You Can Deliver

Direct-to-consumer sales are allowed at farmers’ markets, farm stands, your home, and online. Free samples are fine at any location. Marketing and taking orders through a website or social media is allowed, but delivery is not open-ended: the food must be personally delivered by you, an employee, or someone in your household.¹

For online sales, post all required labeling information on your site before accepting payment. The product itself still needs a physical label with your address or DSHS ID when it changes hands. You cannot ship through the mail or use third-party services like DoorDash or UPS. Sales must stay inside Texas; once a product crosses state lines, federal rules apply and the cottage food exemption no longer covers you.

Wholesale to Cottage Food Vendors

This is the biggest practical change from SB 541. You can now sell non-TCS foods at wholesale to a registered “cottage food vendor,” which can be a restaurant, coffee shop, retail store, or farmers’ market booth. The vendor, not you, is the one who registers with DSHS. TCS foods cannot be sold wholesale and stay direct-to-consumer only.¹

When a vendor resells your products, two extra rules kick in. Every label must include the date the food was made, and the vendor must display a sign near the point of sale carrying the same disclaimer that appears on your labels. Wholesale revenue counts toward the $150,000 cap.

Sales Tax

Not everything you sell is tax-exempt. In Texas, most bakery items sold without plates or utensils, such as whole pies, loaves of bread, and bags of cookies, are not subject to sales tax. Candy and snack items like coated nuts and popcorn are generally taxable. If you only sell tax-exempt products, you do not need a sales and use tax permit from the Texas Comptroller. If any of your products are taxable, you do, and you have to collect and remit the tax. The permit is free.

Zoning, Cities, and HOAs

Texas law bars cities and counties from regulating cottage food production or banning it through zoning. Local authorities cannot require you to apply for a permit, pay a fee, or hold a license to produce or sell cottage food, and a government employee who knowingly tries to impose those requirements can face consequences.¹

Homeowners associations are separate. HOA covenants are private contracts, and the statute’s preemption of local government does not reach them. If your CC&Rs prohibit home-based businesses or commercial activity, that restriction can still apply. Read your governing documents before you invest in equipment or advertising.

Insurance

Your homeowners’ policy almost certainly will not cover the business. Standard policies contain a business pursuits exclusion that denies coverage for injuries or property damage tied to any activity conducted for profit. A customer who gets sick from your product, or who trips on your porch during a pickup, is the exact kind of claim the exclusion is written to block.

Product liability policies designed for cottage food operations fill that gap. They typically start around $300 per year and cover general liability, product liability, and personal injury claims, with actual premiums depending on gross revenue, location, and claims history.

Enforcement and Losing Your Exemption

DSHS and local health authorities do not inspect cottage food kitchens under normal conditions. They keep authority to act when there is an immediate and serious threat to human life or health, including emergency orders and recall orders. Health departments must also maintain records of complaints filed against a cottage food operation, so a pattern of complaints can draw attention even without a single emergency-level incident.¹

Going over $150,000, selling a prohibited food, or missing required labeling can all cost you the exemption. At that point you are running an unlicensed food establishment, which carries its own regulatory consequences. Clean records, correct labels, and staying under the cap keep you inside the protection the law offers.

1
Texas Department of State Health Services. Texas Cottage Food Production
2
Texas A&M AgriLife Extension Service. Online Courses for Cottage Food Businesses
3
U.S. Food and Drug Administration. Addition to the 2022 Food Code – Sesame Added as a Major Food Allergen