The Texas cottage food law, officially codified in Texas Health and Safety Code Chapter 437, revolutionized home food entrepreneurship when enacted in 2011 and expanded in 2013 and 2019. This legislation enables Texas residents to produce and sell specific low-risk foods from home kitchens without the expensive commercial kitchen infrastructure, health department permits, and inspections required for traditional food businesses.
Texas ranks among the most permissive cottage food states, with the $50,000 annual sales cap placing it above most other states according to Harvard Food Law and Policy Clinic research. Approximately 1,500 cottage food operations register with the Texas Department of State Health Services annually, though thousands more operate under the law’s provisions.
Let us explain every aspect of the Texas cottage food law, including eligible food products, registration requirements, labeling mandates, sales restrictions, food safety rules, and expansion opportunities for home food producers throughout the Lone Star State.
The Texas cottage food law allows home-based food producers to sell non-potentially hazardous foods like baked goods, jams, and candies directly to consumers without commercial kitchen requirements or health permits, with annual sales capped at $50,000 and products sold only in Texas through direct transactions at farmers markets, events, or customer pickups.
Texas Cottage Food Law
The Texas cottage food law establishes a regulatory framework balancing consumer protection with entrepreneurial opportunity.
Legislative History
Texas House Bill 970 passed in 2011, creating the initial cottage food law allowing sales of baked goods and certain preserved foods. The law applied only to Class A producers selling directly to consumers.
House Bill 1802 in 2013 expanded the law significantly, adding Class B producers who could sell through indirect channels and increasing the product list.
House Bill 1694 in 2019 raised the annual sales cap from $50,000 gross to $50,000 net income and clarified several regulatory provisions.
Two-Tier System: Class A and Class B
Texas cottage food operations fall into two categories with different rules and flexibility.
Class A Cottage Food Operations:
- Sell directly to consumers only
- No registration required with state
- No annual sales reporting
- Lower compliance burden
- Cannot sell through retail stores or online with shipping
Class B Cottage Food Operations:
- Can sell indirectly through retailers, wholesalers, and online with shipping
- Must register with Texas Department of State Health Services
- Pay $50 registration fee
- Submit annual gross sales report
- Allowed to ship products
Most home producers start as Class A operations due to simplicity. Those wanting broader market access upgrade to Class B registration.
Sales Limit and Income Cap
Both Class A and Class B operations cannot exceed $50,000 in gross annual sales of cottage food products. This cap applies per household, not per person.
Gross sales include all revenue from cottage food sales before expenses. The $50,000 limit does not account for ingredient costs, packaging, or other expenses.
Households with multiple people producing cottage foods share the $50,000 cap. You cannot have two separate cottage food operations in one household each earning $50,000.
Allowed Foods Under Texas Cottage Food Law
The Texas cottage food law permits only non-potentially hazardous foods that do not require refrigeration for safety.
Complete List of Approved Foods
Baked goods (without cream cheese, custard, or meat fillings):
- Breads and rolls
- Cookies and brownies
- Cakes (no cream cheese frosting)
- Pastries and pies (fruit-filled only, no cream or custard)
- Muffins and scones
- Biscotti and crackers
Candy and confections:
- Chocolate and fudge
- Hard candy and lollipops
- Brittles and toffee
- Caramels
- Marshmallows
- Cotton candy
- Nut clusters
Jams, jellies, and preserves:
- Fruit jams and jellies
- Fruit butters
- Preserves with proper pH (4.6 or lower)
- Marmalade
Dried foods:
- Dried fruits
- Dried vegetables
- Dried herbs
- Fruit leather
- Jerky (as of 2019 expansion)
Other approved items:
- Granola and trail mixes
- Popcorn (plain, caramel, kettle corn)
- Cereal
- Roasted coffee beans
- Dried tea blends
- Vinegar and mustard
- Roasted nuts
- Nut butters
- Honey (if produced by the seller’s bees)
Prohibited Foods and Products
The law explicitly prohibits potentially hazardous foods requiring temperature control for safety:
Not allowed:
- Fresh or dried meat (except jerky meeting requirements)
- Canned vegetables or soups
- Garlic in oil mixtures
- Fresh salsa or hot sauce
- Pickles and pickled products
- Fermented foods (sauerkraut, kimchi, kombucha)
- Fresh juice or cider
- Cheese or dairy products
- Ice cream or frozen desserts
- Pet food or treats
- Foods containing cream cheese
- Custard pies or cream-filled pastries
- Cheesecakes
- Foods requiring refrigeration
Foods not on the approved list are prohibited even if seemingly similar to allowed items. When uncertain about a product, contact the Texas Department of State Health Services for clarification.
Special Requirements for Specific Products
Jams and preserves: Must have pH of 4.6 or below. Home producers should use tested recipes from reliable sources like the National Center for Home Food Preservation or USDA guidelines.
Jerky: Added in 2019. Must follow USDA meat preparation guidelines, including proper temperature control during drying. Jerky makers should take food safety courses specific to meat products.
Honey: Only honey from your own beehives qualifies. You cannot purchase bulk honey and repackage it under cottage food law.
Dried herbs and tea: Must be properly dried to safe moisture levels preventing mold growth.
Registration Requirements for Texas Cottage Food Law
Class B cottage food producers must register with state authorities. Class A producers operate without registration but still must follow all food safety and labeling rules.
Class B Registration Process
Step-by-step registration:
- Complete online application through Texas Department of State Health Services website
- Provide basic business information including:
- Producer name and home address
- Contact information
- Types of cottage foods produced
- Sales venues and methods
- Pay $50 non-refundable registration fee
- Submit application for review
- Receive registration number within 2-3 weeks
- Display registration number on all products
Registration remains valid until revoked or surrendered. No annual renewal is required, though you must submit annual sales reports.
Annual Sales Reporting for Class B
Class B operations submit annual gross sales reports by January 15th each year covering the previous calendar year.
The report includes:
- Total gross sales from cottage food products
- Types of products sold
- Sales venues used
Sales reporting helps the state track cottage food industry growth and economic impact. Reports remain confidential and are not public information.
No Inspection Requirement
Neither Class A nor Class B cottage food operations face routine health department inspections. Your home kitchen does not need approval before starting production.
Inspections only occur if:
- Consumer complaints trigger investigation
- Suspected foodborne illness linked to your products
- Evidence of law violations emerges
This no-inspection provision significantly reduces barriers to entry compared to commercial food businesses facing regular health inspections.
Labeling Requirements Under Texas Cottage Food Law
Proper labeling protects consumers and ensures legal compliance under the Texas cottage food law.
Mandatory Label Elements
Every cottage food product must display a label containing:
- Common or usual name of product: “Chocolate Chip Cookies,” “Strawberry Jam,” “Caramel Corn”
- Ingredient list: All ingredients in descending order by weight. Include sub-ingredients for compound ingredients (example: “chocolate chips (sugar, chocolate liquor, cocoa butter, soy lecithin)”)
- Net weight or volume: Use ounces, pounds, fluid ounces, or metric equivalents
- Allergen information: List major allergens (milk, eggs, wheat, soy, peanuts, tree nuts, fish, shellfish) in plain language
- Producer’s name and address: Your name and home address where food was prepared
- Statement: “This food is made in a home kitchen and is not inspected by the Department of State Health Services or a local health department.”
- Registration number (Class B only): Display your DSHS registration number
Label Format and Placement
Labels must be easy to read with lettering at least 1/16 inch tall. Use contrasting colors ensuring text visibility against the background.
Attach labels directly to the product container or packaging. Loose tags or separate cards do not satisfy labeling requirements.
For items sold at farmers markets or events where immediate consumption occurs, you may display required information on signs at your booth rather than individual product labels. However, most producers label every item for professionalism and compliance certainty.
Sample Label Template
Chocolate Chip Cookies
Ingredients: Enriched wheat flour (wheat flour, niacin, iron, thiamine, riboflavin, folic acid), brown sugar, butter (cream, salt), chocolate chips (sugar, chocolate liquor, cocoa butter, soy lecithin, vanilla), granulated sugar, eggs, vanilla extract, baking soda, salt.
Contains: Wheat, milk, eggs, soy
Net Weight: 12 oz
Made by Jane Smith
123 Main Street, Austin, TX 78701
This food is made in a home kitchen and is not inspected by the Department of State Health Services or a local health department.
[Class B producers add: DSHS Registration #XXXXX]
Sales Restrictions and Allowed Venues
The Texas cottage food law imposes specific limitations on where and how you can sell products.
Allowed Sales Venues
For Class A operations:
- Farmers markets: Sell at any farmers market, farm stand, or roadside stand
- Special events: County fairs, festivals, craft shows, church events
- Home pickups: Customers come to your home to collect orders
- Delivery: You personally deliver to customers’ homes or offices
- Municipally owned facilities: Community centers, city-run markets
Additional venues for Class B operations:
All Class A venues plus:
- Retail stores (grocery stores, gift shops, specialty food shops)
- Restaurants and cafes (selling products, not using as ingredients)
- Online sales with shipping
- Wholesale to retailers or institutions
Prohibited Sales Methods (Class A)
Class A cottage food producers cannot:
- Ship products by mail, UPS, FedEx, or other carriers
- Sell through third-party websites or platforms
- Stock products on consignment at retail stores
- Sell to restaurants as ingredients
- Sell products at wholesale
These restrictions limit Class A market reach but eliminate registration and reporting requirements.
Direct Sales Requirement
All cottage food sales must be “direct to the consumer,” meaning the end consumer purchases from you or an authorized reseller. You cannot sell cottage foods to manufacturers who incorporate them into other products.
Geographic Restrictions
Cottage food products must be sold only within Texas. You cannot ship to or sell in other states even if those states have cottage food laws.
This Texas-only restriction applies to both Class A and Class B operations. Interstate food sales trigger federal FDA regulations requiring commercial kitchen facilities and extensive compliance.
Food Safety Requirements
While cottage food operations avoid health inspections, producers must follow basic food safety practices.
Home Kitchen Standards
Your home kitchen must be:
- Clean and sanitary
- Free from pests and pets during food production
- Equipped with functioning handwashing facilities
- Maintained at appropriate temperatures for food safety
No specific equipment is mandated, but standard home appliances (oven, refrigerator, sink) are necessary for most cottage food production.
Personal Hygiene Practices
Follow these food handler safety rules:
- Wash hands thoroughly before handling food
- Wear clean clothing and tie back long hair
- Do not produce food when ill with contagious conditions
- Cover cuts and wounds with waterproof bandages
- Remove jewelry that could contaminate food
- Keep pets out of kitchen during production
Ingredient Sourcing
Purchase ingredients from approved commercial sources. Do not use ingredients from unapproved sources like:
- Hunted game meat
- Foraged wild mushrooms
- Unpasteurized dairy products
- Home-canned goods made by others
Buy ingredients from grocery stores, restaurant supply companies, or agricultural producers with proper licenses.
Temperature Control
Cottage foods are non-potentially hazardous, meaning they are safe at room temperature. However:
- Store perishable ingredients properly before use
- Cool baked goods completely before packaging
- Keep production area at reasonable temperatures (below 80°F recommended)
- Do not leave ingredients at unsafe temperatures for extended periods
Recipe Safety
Use tested recipes from reliable sources for preserved foods like jams and jellies. The National Center for Home Food Preservation, USDA Complete Guide to Home Canning, and university extension services provide safe recipes.
Do not alter tested recipes in ways affecting safety (changing acid levels, sugar amounts in preserves, or processing times).
Insurance and Liability Considerations
The Texas cottage food law does not require insurance, but coverage protects producers from financial risk.
Product Liability Insurance
Product liability insurance covers legal costs and damages if someone claims injury or illness from your cottage foods.
Coverage details:
- Typical policies: $1 million per occurrence, $2 million aggregate
- Annual premiums: $400-$800 for cottage food operations
- Covers legal defense costs even for frivolous claims
- Provides peace of mind and professional credibility
Some farmers markets and retail stores require proof of insurance before allowing vendors. Check venue requirements before investing in coverage.
Homeowners Insurance Limitations
Standard homeowners policies typically exclude business activities. Producing and selling cottage foods may void coverage for business-related claims.
Inform your insurance agent about your cottage food operation. You may need a home business rider or separate policy.
Business Licenses and Permits
Texas cottage food operations do not need:
- Business licenses (though some cities require general business permits)
- Health permits or food handler certificates
- Commercial kitchen inspections
- Sales tax permits (cottage food sales are exempt from Texas sales tax)
You may need an Assumed Name Certificate (DBA) if operating under a business name different from your legal name. File with your county clerk ($25-$50 fee).
Expanding Beyond Cottage Food Law
Successful cottage food producers eventually outgrow the $50,000 cap or want to make products outside the approved list.
Transitioning to Commercial Food Production
Moving beyond cottage food limits requires:
- Commercial kitchen space: Rent licensed commercial kitchen facilities or build an approved kitchen at home
- Food manufacturer license: Register with Texas Department of State Health Services as a food manufacturer ($320 annual fee)
- Health inspections: Pass initial and periodic health department inspections
- Food handler certification: Obtain certified food manager credentials
- Sales tax permit: Register with Texas Comptroller for sales tax collection
- Business entity formation: Establish LLC or corporation (recommended)
- Commercial insurance: Obtain appropriate business insurance coverage
Shared-Use Commercial Kitchens
Many Texas cities have shared commercial kitchen facilities renting space hourly or monthly. Typical rates range from $15-$35 per hour.
Shared kitchens in major Texas cities:
- Austin: Prep ATX, The Cook’s Nook
- Houston: Hope Farms Incubator Kitchen, Foodworks Culinary Center
- Dallas: Dallas Commercial Kitchen, Prep & Pastry
- San Antonio: The 5 & Dime Kitchen, Alamo Kitchen
- Fort Worth: Acre Distilling Commercial Kitchen
Shared kitchens provide approved facilities without major capital investment in building your own commercial space.
Farmers Market Exceptions
Some farmers markets operate micro-processing facilities allowing vendors to produce certain foods on-site. These arrangements require the market to hold appropriate permits.
Check with individual farmers markets about available production facilities and requirements.
Tax Implications for Cottage Food Businesses
Cottage food income has tax consequences requiring proper reporting and planning.
Federal Income Tax
Cottage food sales constitute taxable income reported on your federal tax return.
Reporting methods:
- Schedule C (Form 1040): Report cottage food business income and expenses
- Deduct ordinary and necessary business expenses reducing taxable income
- Pay self-employment tax (15.3%) on net profits exceeding $400
Deductible expenses include:
- Ingredients and supplies
- Packaging materials
- Farmers market booth fees
- Business insurance premiums
- Registration fees
- Mileage for business purposes
- A portion of home utilities (use of home kitchen)
- Advertising and marketing
- Website and online platform fees
- Professional services (accountant, attorney)
Keep detailed records of all income and expenses. Save receipts and document mileage.
Sales Tax Exemption
Texas exempts cottage food sales from state and local sales tax. You do not need to register for sales tax permits or collect tax from customers.
This exemption applies only to foods meeting cottage food law requirements. If you sell non-food items (handmade crafts, T-shirts), those sales require sales tax collection.
Estimated Tax Payments
Self-employed cottage food producers pay estimated taxes quarterly if expecting to owe $1,000+ in federal taxes.
Estimated payment deadlines: April 15, June 15, September 15, and January 15.
Simplified Record-Keeping
Track income and expenses using:
- Spreadsheets logging each transaction
- Accounting software (QuickBooks, FreshBooks, Wave)
- Dedicated bank account for cottage food transactions
- Separate credit card for business purchases
Good records simplify tax preparation and provide documentation if audited.
Common Mistakes and Compliance Issues
Many cottage food producers unknowingly violate the Texas cottage food law through misunderstandings or oversights.
Frequent Violations
Selling prohibited foods: Attempting to sell pickles, fresh salsa, cream cheese frosting, or other unapproved items because they seem similar to allowed products.
Shipping violations: Class A producers shipping products by mail or courier thinking it is allowed.
Missing label elements: Forgetting required statements, allergen warnings, or contact information on labels.
Exceeding sales cap: Surpassing $50,000 annual limit and continuing sales without transitioning to commercial food manufacturing.
Using commercial-sounding names: Claiming products are “FDA approved” or “health department certified” when cottage foods are explicitly not inspected.
Selling outside Texas: Shipping products to other states or selling at farmers markets across state lines.
Enforcement and Penalties
The Texas Department of State Health Services enforces cottage food law compliance. Violations can result in:
- Warning letters for minor infractions
- Orders to cease and desist production
- Fines up to $1,000 per violation
- Product recalls at producer expense
- Criminal penalties for egregious violations
Consumer complaints trigger most enforcement actions. Maintain high standards preventing complaints and regulatory attention.
Resources for Texas Cottage Food Producers
Multiple organizations and agencies support cottage food entrepreneurs with information, training, and networking.
Government Resources
Texas Department of State Health Services: Primary regulatory authority for cottage food law. Website provides:
- Complete statute text
- Registration forms and instructions
- Allowed food lists
- Label requirements
- Contact information for questions
Texas A&M AgriLife Extension: Offers cottage food safety courses, tested recipes, and business development resources. Extension agents in each county provide local support.
Texas Workforce Commission: Provides entrepreneurship training and small business development assistance.
Non-Profit Organizations
Texas Cottage Food Coalition: Advocacy organization supporting cottage food producers and pushing for law expansions.
Local farmers market associations: Connect producers with markets, provide vendor training, and offer networking opportunities.
Texas Beekeepers Association: Resources for honey producers operating under cottage food law.
Educational Opportunities
Cottage food training courses: Texas A&M Extension offers online and in-person food safety courses specifically for cottage food producers ($15-$35).
Business development workshops: Small Business Development Centers (SBDCs) throughout Texas provide free counseling and low-cost training on business planning, marketing, and financial management.
Online communities: Facebook groups, forums, and subreddits connect Texas cottage food producers for advice sharing and problem-solving.
Comparing Texas to Other States
The Texas cottage food law ranks among the nation’s most permissive according to research by the Harvard Food Law and Policy Clinic.
Texas Advantages
High sales cap: $50,000 annual limit exceeds most states (many cap at $15,000-$35,000).
Broad product list: Texas allows more food types than many states, particularly with jerky addition.
No mandatory training: Unlike some states requiring food safety courses, Texas has no training mandates.
No inspection requirement: Avoiding inspections reduces costs and simplifies compliance.
Two-tier system: Class A option allows very simple entry without registration.
| State | Sales Cap | Registration Required | Inspections | Allowed Products |
|---|---|---|---|---|
| Texas | $50,000 | Only Class B | No | Very broad |
| California | $50,000 | Yes | No | Moderate |
| Florida | $250,000 | Yes | No | Broad |
| New York | $500,000 | Yes | Varies | Moderate |
| Pennsylvania | $80,000 | Yes | No | Limited |
Texas’s combination of high sales cap, broad product approval, and no-inspection policy creates excellent conditions for cottage food entrepreneurship.
Future Developments and Advocacy
The Texas cottage food law continues evolving through legislative changes and advocacy efforts.
Recent Expansions
The 2019 HB 1694 made significant improvements:
- Changed sales cap from gross sales to net income (benefiting producers)
- Added jerky to approved products list
- Clarified labeling requirements
- Extended law effectiveness date
Potential Future Changes
Advocacy groups push for:
- Removing or raising the sales cap
- Allowing pick-up and delivery nationwide
- Expanding product list to include more items
- Removing address requirement from labels (privacy concern)
- Allowing cottage food use as restaurant ingredients
Getting Involved in Advocacy
Support cottage food law improvements through:
- Contacting state legislators about cottage food priorities
- Joining Texas Cottage Food Coalition
- Sharing success stories demonstrating economic impact
- Participating in legislative hearings when bills are considered
- Supporting candidates favoring small business growth
Success Stories and Economic Impact
Cottage food operations contribute to Texas’s economy while supporting family incomes and entrepreneurship.
Economic Contribution
According to Texas Department of State Health Services data, registered Class B operations alone generated $15 million in reported sales in 2022. Total cottage food industry impact likely exceeds $50 million when including unregistered Class A producers.
The industry creates:
- Supplemental income for families
- Entry-level entrepreneurship experience
- Agricultural product demand (flour, sugar, fruit)
- Tourism attraction through farmers markets
- Local food system strengthening
Producer Success Examples
Many cottage food producers build substantial businesses within the law’s parameters:
Baked goods producers: Home bakers selling at farmers markets and events earn $1,500-$4,000 monthly.
Jam and jelly makers: Preserves producers partner with multiple farmers markets across cities generating $2,000-$5,000 monthly during peak seasons.
Candy makers: Specialty confection producers sell through retailers and online reaching the $50,000 annual cap.
Several successful cottage food operations eventually transition to commercial facilities, hiring employees and expanding beyond original cottage food products.
Cottage Food Production Operations – FAQs
Conclusion
The Texas cottage food law provides exceptional opportunities for home-based food entrepreneurs, allowing annual sales up to $50,000 of approved non-potentially hazardous foods like baked goods, jams, candies, and dried products directly to consumers through farmers markets, events, and home pickups (Class A) or additionally through retail stores and online shipping (Class B requiring $50 registration).
Texas ranks among America’s most cottage food-friendly states according to Harvard Food Law and Policy Clinic analysis, with approximately 1,500 producers registering annually through the Texas Department of State Health Services while thousands more operate as Class A producers without registration.
The law’s combination of broad product approval, high income caps, no mandatory inspections, and simple compliance requirements creates accessible pathways for Texans to test food business ideas, supplement family income, and participate in local food economies while providing consumers with artisanal products made by neighbors throughout communities statewide.
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