MoCRA Small Business Exemptions: Revenue Limits and Requirements

MoCRA small business exemptions apply if your average gross annual U.S. cosmetic sales over the previous three years fall below $1,000,000 and none of your products fall into a handful of higher-risk categories. Meet both conditions and you’re excused from facility registration, product listing, and good manufacturing practice (GMP) requirements. Miss either one and the full compliance load applies.¹

The Revenue Threshold

Under 21 U.S.C. § 364h, a responsible person or facility owner qualifies as a small business when average gross annual sales of cosmetic products in the United States are below $1,000,000, measured over the prior three years. The figure is adjusted for inflation, so it may rise over time.

The statute measures cosmetic sales specifically, not total company revenue. A business pulling in $2 million overall but only $800,000 from U.S. cosmetic sales still qualifies. Keep financial records that separate U.S. cosmetic revenue from everything else, because the FDA can ask for documentation supporting the claim.

Product Types That Void the Exemption

Revenue alone doesn’t settle it. Even if you sit well under $1,000,000, manufacturing or processing any of the following products strips the exemption from your entire operation:²

Cosmetics that regularly come into contact with the mucous membrane of the eye during normal use, such as mascara, eye shadow, eyelash adhesive, and eyeliners applied to the waterline. Moisturizers or serums used around the eye area without touching the eye itself don’t count.
Cosmetics delivered by injection.
Cosmetics intended to be ingested or used internally.
Products designed to alter appearance for more than 24 hours where the consumer does not normally remove them, including brow or lash dye, acrylic nails, gel nails, and gel nail polish.

One qualifying product in your line is enough to disqualify the entire business. This catches many indie brands whose catalog is mostly basic skincare but includes a single mascara or lash glue.

What the Exemption Covers

Qualifying small businesses skip three specific obligations.³

Facility Registration

Non-exempt manufacturers and processors must register every facility with the FDA and renew that registration every two years.⁴ Small businesses skip this.

Product Listing

Companies without the exemption must file a listing for every marketed cosmetic, including the facility registration number, full ingredient list, and cosmetic category.⁵ New products require listing within 120 days of entering the market, and listings must be updated annually. Small businesses are not required to file.

Good Manufacturing Practices

MoCRA directs the FDA to set GMP rules covering how cosmetics are manufactured, processed, packaged, and held.⁶ Qualifying small businesses are not subject to those requirements. For non-exempt businesses, the statute tells the FDA to account for business size, provide simplified requirements for smaller operations, and allow longer compliance timelines where appropriate.

What Small Businesses Still Have to Do

The exemption is narrower than many brand owners assume. Two core MoCRA duties apply to every cosmetic responsible person, regardless of revenue or product type.

Safety Substantiation

Every responsible person must ensure, and keep records supporting, adequate substantiation of each product’s safety.⁷ The statute defines that as tests, studies, research, or other evidence qualified experts would consider sufficient to support a reasonable certainty the product is safe. No specific tests are mandated, so ingredient safety data, supplier documentation, and published research on similar formulations can support the file. But the records must exist. The FDA has authority to access and copy safety records under certain conditions.³

Serious Adverse Event Reporting

A responsible person who learns of a serious adverse event linked to their cosmetic must report it to the FDA within 15 business days.³ Reports run through the FDA’s Cosmetics Direct system, and the product label must accompany each report. Labels must also carry contact information so consumers know where to report problems. Small businesses that skip this face the same enforcement exposure as large manufacturers.

The FDA’s general authority over adulterated and misbranded cosmetics also still applies, so being exempt from registration doesn’t put a business outside the agency’s reach.

Establishments That Aren’t Facilities At All

A separate path out of MoCRA’s registration rules has nothing to do with revenue. Under 21 U.S.C. § 364, certain establishments are excluded from the definition of “facility” based on what they do:⁸

Beauty shops and salons, unless they manufacture or process cosmetics at that location.
Cosmetic retailers, individual sales representatives, direct sellers, retail distribution facilities, and pharmacies, unless they manufacture or process cosmetics not sold directly to consumers at that location.
Hospitals, physicians’ offices, and health care clinics.
Public health agencies and nonprofits that provide cosmetics directly to consumers.
Hotels, airlines, and similar businesses providing cosmetics as complimentary items incidental to other services.
Trade shows distributing free cosmetic samples.
Research facilities making products solely for research or evaluation, not for retail sale.
Operations that only label, relabel, package, repackage, hold, or distribute cosmetics. Filling a container with a cosmetic counts as manufacturing rather than packaging, so contract fillers don’t fit this exclusion.

The condition running through most of these is manufacturing. A pharmacy that only sells finished cosmetics off the shelf is excluded. A pharmacy that compounds its own formulations for wholesale probably isn’t.

Products Already Regulated as Drugs

Some products sit at the intersection of cosmetics and drugs, including dandruff shampoos, sunscreens, acne treatments, and antiperspirants. When a product or facility already complies with drug registration and listing requirements under Chapter V of the Federal Food, Drug, and Cosmetic Act, MoCRA’s cosmetic registration and listing rules don’t apply.³ Facilities producing these dual-regulated items remain under FDA drug inspection and manufacturing standards, which are more demanding than MoCRA’s cosmetic GMP requirements. If your operation makes only drug-cosmetic products, MoCRA’s facility registration and product listing provisions likely add no new obligations.

1
Office of the Law Revision Counsel. 21 USC 364h – Small Businesses
2
Office of the Law Revision Counsel. 21 USC 364h – Small Businesses
3
U.S. Food and Drug Administration. Modernization of Cosmetics Regulation Act of 2022 (MoCRA)
4
U.S. Food and Drug Administration. FDA Updates Web Portal and Informational Materials to Help Cosmetic Facilities Prepare for Biennial Registration Renewal
5
Office of the Law Revision Counsel. 21 USC 364c – Cosmetic Product Listing
6
Office of the Law Revision Counsel. 21 USC 364b – Good Manufacturing Practice
7
Office of the Law Revision Counsel. 21 USC 364d – Cosmetic Safety Substantiation
8
Office of the Law Revision Counsel. 21 USC 364 – Definitions