How to Legally Sell Baked Goods from Home

Selling baked goods and other food items made by you in your home kitchen is a great way to create a source of income for your family while remaining present at home.

With the right guidance, it can be simple, profitable, and deeply rewarding when you know and understand the rules.

Cottage food laws were created to let small, home-based makers sell low-risk foods directly to customers. The details vary by state and city, but the core steps are the same: know what you can sell and where, label it correctly, follow basic safety, and register or permit where required.

Jump to:

• What is a Cottage Bakery?
• Who Qualifies as a Cottage Food Operator
• Benefits of Starting a Cottage Bakery
• Legal Considerations and Regulations to Run a Cottage Bakery
• Foods You Can and Cannot Sell From Home
• Where You Can Sell When Making Food At Home
• Labeling and Packaging Requirements For Cottage Bakers
• Allergen Disclosure and Cross-Contact
• Claims You Should Avoid as a Cottage Baker
• Required Training, Inspections and Certifications
• Licenses, Permits, and Registrations
• Sales Tax and Business Structure
• Zoning, HOA, and Landlord Rules
• Using a Commercial Kitchen When Needed
• Insurance for Home Bakers
• State-by-State Links and How to Verify Your Rules
• Related Posts
• subscribe to get more home bakery tips

but before we talk about Cottage Food Laws...

What is a Cottage Bakery?

A cottage bakery is a small-scale, home-based baking business that produces and sells bread and other baked goods directly from the baker's home kitchen.

Unlike commercial bakeries, cottage bakeries operate under specific laws and regulations that allow bakers to sell homemade goods with limited overhead costs.

Key characteristics of a cottage bakery include the use of home kitchen facilities, a focus on artisanal and small-batch production, and direct sales to consumers through markets, online platforms, or local delivery.

Who Qualifies as a Cottage Food Operator

Most states define a cottage food operator as an individual (or household) producing approved foods in a primary residence and selling them directly to consumers. Some locations allow limited helpers, but production generally must happen in your home kitchen.

Expect a cap on annual sales, and rules about where sales can happen. If you outgrow those limits, you can graduate to a commercial kitchen or a micro-bakery license.

Benefits of Starting a Cottage Bakery

Starting a cottage bakery offers several benefits, including low startup costs, the ability to work from home, and the opportunity to turn a passion for baking into a profitable venture.

Cottage bakeries also allow for greater creative freedom, enabling bakers to experiment with unique recipes and cater to niche markets. You are the boss dictating the menu.

My favorite part is that operating a cottage bakery fosters a strong connection with the local community, as customers often appreciate the personal touch and homemade quality of your products.

Legal Considerations and Regulations to Run a Cottage Bakery

Operating a home bakery involves navigating various legal considerations and regulations that vary by location.

Most areas have cottage food laws that specify what types of goods can be produced, how they can be sold, and any labeling requirements.

Bakers must also adhere to local health and safety standards, which may include regular kitchen inspections and food handler certifications.

It's essential to research and comply with all relevant laws to ensure your bakery operates legally and avoids fines or shutdowns. Customers also like to know that you are operating legally and that they can trust your operations.

Foods You Can and Cannot Sell From Home

Approved lists focus on "non-potentially hazardous" foods that do not need refrigeration for safety, like most breads, cookies, dry mixes, and candies. Items with dairy fillings, fresh cream, meat, and cut fruits usually are not allowed.

Always check the list of what's allowed and prohibited in your region (see more below for links).

Where You Can Sell When Making Food At Home

Direct-to-consumer is the theme: home pickup, farmers markets, community events, and sometimes online orders for local delivery. Third-party resale (like placing products in a café or store to resell) is often restricted.

Some states allow shipping within the state, others do not. If shipping is allowed, packaging, labeling, and temperature control still apply.

Labeling and Packaging Requirements For Cottage Bakers

Labels protect customers and protect you. Most states require your business name and contact information, product name, ingredient list, major allergens, and a cottage-food disclosure line.

Besides following cottage food laws, labeling is your chance to stand out. Keep the required elements front and center, then elevate the look with consistent fonts and colors, tidy spacing, and a logo. Add practical info customers love, such as storage and reheating tips, a best-by date, and a QR code to your order page.

Use sturdy, food-safe packaging that protects against moisture and crumbling.

Allergen Disclosure and Cross-Contact

Declare the eight or nine major allergens required in your area and be careful with cross-contact in a shared home kitchen. Separate tools and storage when possible and clean thoroughly between recipes.

If you handle nuts or other allergens, say so clearly on labels and product pages. Clarity builds trust.

Claims You Should Avoid as a Cottage Baker

Avoid medical or dietary claims you cannot legally make, such as "diabetic-friendly," "healthy," or "gluten-free" unless you follow the specific standards for those claims.

Keep descriptions focused on flavor, ingredients, and craft. You can still tell a compelling story without risky promises.

Required Training, Inspections and Certifications

Some jurisdictions require a food handler certification or a short cottage-food course. These are affordable, quick, and worth the confidence they give your customers.

Keep certificates current and handy. Markets and event organizers often ask for them.

A few places require an initial kitchen check or a self-inspection checklist with photos.

If an inspection is required, tidy your space, document your cleaning process, and have labels and recipes ready to show.

Licenses, Permits, and Registrations

You may need a cottage food permit, a basic business license, or both. Some cities require a home-occupation permit.

Sales Tax and Business Structure

Many baked goods are taxable in some contexts and not in others. Ask your state revenue office or a tax specialist whether you should collect sales tax and how to file.

Choose a structure that fits your risk and budget. Many start as sole proprietors and later form an LLC for liability separation. Get an EIN if you need one for banking and payment platforms.

Zoning, HOA, and Landlord Rules

Local zoning may limit signage, parking, or customer pickups. HOAs and leases sometimes add rules about business activity. A quick conversation up front prevents complaints later.

Using a Commercial Kitchen When Needed

When your menu or volume outgrows cottage limits, renting time in a commercial kitchen is a flexible bridge.

It lets you expand product types, sell wholesale, or ship more broadly, while keeping your home bakery brand front and center.

Insurance for Home Bakers

General and product liability insurance protects you if a customer claims harm. Many markets require a certificate of insurance naming them as additional insured.

Insurance policies for cottage operators are actually pretty affordable. Shop quotes and keep limits that match your sales volume.

State-by-State Links and How to Verify Your Rules

You will want to check your state's official agriculture or health department pages and keep a note to re-check yearly.

It would be difficult for me to list and keep up-to-date all the rules for all the states or countries in this page, but there are websites that are dedicated to that and I'm linking a couple of my favorite ones below.

CottageFoodLaws.com

This is the website I used for information on Texas cottage food laws, but it has information on other states, as well: https://texascottagefoodlaw.com/other-states/

If you are unsure, I strongly encourage you to call your local health department. A five-minute call can save weeks of uncertainty.

Was this helpful? you'll love the rest of my home bakery tips. Start with How to Market Your Home Baked Goods Without Being Salesy, Growing the Customer Base of Your Home Bakery, and Other Ways to Make Money as a Home Baker.

For a more comprehensive learning experience, checkout my mini course Launch A Bakery From Home.