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

The Texas cottage food law lets you sell most homemade foods directly to consumers from your home kitchen, with no commercial kitchen, health inspection, or food service permit required. Under Health and Safety Code Chapter 437, as expanded by Senate Bill 541 effective September 1, 2025, your operation can earn up to $150,000 a year in gross sales, sell through more channels than before (including wholesale and online with personal delivery), and offer a broader range of products.¹ A handful of rules still apply, and they start with what you’re allowed to make.

What You Can and Cannot Sell

The law works by exclusion. Almost any homemade food is fair game unless it falls into one of six prohibited categories:¹

Meat, meat products, poultry, and poultry products
Fish, shellfish, and other seafood-derived products
Ice cream, frozen custard, gelato, popsicles, shaved ice, and similar frozen items
Low-acid canned goods, including canned vegetables and soups that don’t meet the acidity threshold for shelf storage
Any food containing CBD or THC
Raw milk and raw milk products

Everything else is on the table. Baked goods, jams, jellies, pickles, candy, roasted coffee, dried herbs, granola, and popcorn are all straightforward cottage food staples. The expanded law also allows time-and-temperature-control-for-safety (TCS) foods such as cheesecakes and cream pies, provided you register with the Texas Department of State Health Services and follow additional labeling rules.¹

Food Handler Training

Before selling anything, you have to finish a basic food safety course accredited under Chapter 438 of the Health and Safety Code.² These are available online and in person, run about two hours, and typically cost $10 to $20. The certificate is valid for two years.

Anyone who handles, prepares, or packages your cottage food must either hold their own certificate or work under the direct supervision of someone who does. That includes household members who help out.² Keep the certificate where you prepare food. You don’t file it with the state, but you should be able to produce it if a health official follows up on a complaint.

Labeling Requirements

Each product has to be individually packaged to prevent contamination, unless the item is too large for conventional packaging (a tiered cake, for example). Every package needs a label with three pieces of information:³

Your full name and the physical address of the operation. If you’d rather not put your home address on every label, you can register with DSHS and use the unique identification number they assign instead.
This disclosure statement, verbatim: “THIS PRODUCT WAS PRODUCED IN A PRIVATE RESIDENCE THAT IS NOT SUBJECT TO GOVERNMENTAL LICENSING OR INSPECTION.”
The common name of the product.

For items that can’t be packaged, the same information can go on an invoice or receipt.³

Extra Rules for TCS Foods

Temperature-sensitive items like cream-filled pastries also need 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.” That statement can appear on the label itself or on the receipt.³

Allergen Disclosure

Federal law requires all packaged foods to disclose the nine major allergens: milk, eggs, fish, crustacean shellfish, tree nuts, peanuts, wheat, soybeans, and sesame.⁴ Cottage food is not exempt. If your product contains any of them, list them clearly. Getting this wrong risks a health reaction for the buyer and opens you up to liability.

Where and How You Can Sell

The previous version of the law was restrictive about sales channels. SB 541 opened them up. You can now sell directly to consumers at your home, at farmers’ markets, at farm stands, and through online orders. You can also wholesale to a new category called a “cottage food vendor,” who then resells your products to consumers at farmers’ markets, farm stands, food service establishments, or retail stores.¹

A cottage food vendor is someone in Texas who has a contractual relationship with your operation and sells your products directly to consumers on your behalf. Vendors buying from you at wholesale have to register with DSHS. TCS foods can’t be wholesaled; those must go directly to the end consumer.¹

Online Sales and Delivery

Website orders are allowed with two conditions. Before accepting payment, you must post all required labeling information on your website so the buyer sees it before purchasing. After payment, the food has to be personally delivered by you, an employee, or a household member. Third-party delivery services and mail-order shipping don’t qualify.¹

The $150,000 Revenue Cap

Annual gross income from your cottage food operation can’t exceed $150,000. That’s total revenue from food sales, not profit after expenses.¹ Cross that line and you no longer qualify as a cottage food production operation; you’d need to move into a licensed commercial kitchen with the standard retail food permits. The cap was previously $50,000, so the new ceiling is a substantial jump.

When You Need to Register With DSHS

Registration with the Texas Department of State Health Services is required if you sell TCS foods, or if you want to use a unique identification number on your labels instead of your home address. Cottage food vendors buying your products at wholesale must also register.¹

If you stick to shelf-stable products, sell directly to consumers, and don’t mind putting your home address on labels, registration is optional.

What the Law Does Not Cover

Texas law explicitly prohibits local governments, including city and county health departments, from regulating cottage food production in your home. No local authority can require you to obtain a permit, pay a fee, or submit to an inspection for the operation itself.⁵

Local zoning ordinances and homeowners association rules are a different question. Zoning codes can restrict commercial activity in residential areas, and HOAs may have covenants about signage, customer traffic, or running a business from home. The cottage food statute doesn’t override those. Check with your local zoning department and read your HOA bylaws before you start selling.

Sales and Income Taxes

Texas applies sales tax based on the type of product, not the type of business. Bakery items sold without plates or eating utensils are generally not taxable, whether whole or by the slice. Candy and snack items are typically taxable.⁶ If you sell only tax-exempt items, you don’t need a Sales and Use Tax Permit. If any of your products are taxable, you do, and you’ll need to collect and remit sales tax. When in doubt, contact the Texas Comptroller’s office directly.

On the federal side, cottage food income is self-employment income. You report revenue and deduct business expenses (ingredients, packaging, training) on Schedule C with your personal return. If you expect to owe $1,000 or more in federal taxes for the year, the IRS expects quarterly estimated payments. Most sole-proprietor operators don’t need an Employer Identification Number and can use their Social Security number. An EIN becomes necessary if you hire employees, form an LLC or partnership, or need one for a business bank account.⁷ If you sell under a name other than your own legal name, Texas requires an assumed name certificate (a DBA) filed with the county clerk, usually around $25.

1
Texas Department of State Health Services. Texas Cottage Food Production
2
Texas Public Law. Texas Health and Safety Code 437.0195 – Production of Cottage Food Products
3
State of Texas. Texas Health and Safety Code 437.0193 – Packaging and Labeling Requirements for Cottage Food Production Operations
4
FDA. Food Allergies
5
State of Texas. Texas Health and Safety Code 437.0192 – Regulation of Cottage Food Production Operations by Local Government Authorities Prohibited; Complaints
6
Texas Comptroller. Grocery and Convenience Stores
7
Internal Revenue Service. Employer Identification Number