Cottage food laws in Texas let you make and sell most homemade food from your own home kitchen without a commercial food license, so long as your gross sales stay at or below $150,000 a year. Senate Bill 541, which took effect September 1, 2025, raised the old $50,000 cap, opened up categories of food that used to be off-limits, and added a wholesale channel through registered cottage food vendors. The rules below cover what you can sell, how you have to label it, where you can sell it, and the training and registration steps that go with it.
What You Can and Cannot Sell
The current law flips the old approach. Instead of a list of approved products, there is a short list of prohibited ones. You cannot sell any of the following as cottage food:
- Meat and poultry, including beef, pork, chicken, turkey, and products made from them
- Seafood, including fish, shellfish, and any seafood products
- Ice and frozen dairy items such as shaved ice, ice cream, frozen custard, popsicles, and gelato
- Low-acid canned goods, like canned vegetables, soups, or sauces that don’t meet the acidity threshold for safe home canning
- Any food containing CBD or THC
- Raw milk and raw milk products
Everything else is fair game. Baked goods, jams, jellies, pickled vegetables, nut butters, and popcorn are still the core of most operations. Newly allowed items include fermented vegetable products, roasted coffee, dried herbs, frozen raw fruits and vegetables, plant-based acidified canned goods, candy, and granola.1Texas Department of State Health Services. Texas Cottage Food Production
Time and Temperature Control Foods
Foods that need refrigeration or heat-holding to stay safe, called TCS foods, are now allowed. Custard-filled pastries, cream pies, and certain cheesecakes fit here. These were completely banned under the old law. You can now sell them, but you have to register with the Texas Department of State Health Services and follow extra labeling rules that include safe handling instructions and temperature requirements on every package.1Texas Department of State Health Services. Texas Cottage Food Production
Registration is not optional for TCS foods. If you sell items that need temperature control without registering, you are outside the exemption. Stick to shelf-stable products if you want to skip registration entirely.
The $150,000 Sales Cap
Your operation has to stay at or below $150,000 in gross annual sales from food products. Gross sales means total revenue, not profit. Cross that line and the cottage food exemption no longer covers you; the next step is a licensed commercial food establishment with inspections and permitting.1Texas Department of State Health Services. Texas Cottage Food Production
The old cap was $50,000, which pushed a lot of successful home bakers and specialty producers out of the framework. The higher ceiling gives room for a real small business without forcing a move into a commercial kitchen.
Food Handler Training
Every cottage food operator has to complete a basic food safety education or training program for food handlers before selling anything. State-accredited courses cover sanitation, cross-contamination, and safe handling. Most are online and run $10 to $20.
This is a legal prerequisite, not a suggestion. Keep the completion certificate on file. A local health department investigating a complaint may ask to see it.
When You Have to Register With DSHS
SB 541 built out a registration system through DSHS that is sometimes mandatory and sometimes optional.
Registration is required if you sell TCS foods, or if you operate as a cottage food vendor buying at wholesale and reselling to consumers. For everyone else it is optional. There is still a practical reason to register: you get a unique DSHS identification number that can go on your labels in place of your home address.1Texas Department of State Health Services. Texas Cottage Food Production
For anyone selling from home or at farmers’ markets, printing a home address on every package raises real privacy and safety concerns. The registration number solves that. DSHS keeps the connection between your number and your information on file so officials can trace products when they need to.
Where Production Has to Happen
All cottage food production has to happen in a home kitchen using standard residential appliances. You cannot use a commercial kitchen, rent space at a licensed facility, or set up production in a detached building and still qualify.2State of Texas. Texas Health and Safety Code Chapter 437 – Section 437.0196
A house or apartment counts. Second homes, vacation properties, and recreational vehicles do not, unless one of those is genuinely your primary residence. Nonprofit organizations, which SB 541 added to the framework, can operate out of the home of a director or officer.1Texas Department of State Health Services. Texas Cottage Food Production
Labeling Your Products
Every package needs a label. It has to be legible, in English, and include:
- The name of your cottage food operation and either your physical home address or your DSHS registration number
- The common or usual name of the food
- Any major allergen the food contains, listed on the label
- A disclaimer that the food was made in a private residence and is not inspected by DSHS or a local health department
The major food allergens you have to disclose are milk, eggs, wheat, peanuts, tree nuts, soy, fish, and sesame.1Texas Department of State Health Services. Texas Cottage Food Production Sesame became the ninth major allergen under federal law effective January 1, 2023, and the Texas rules incorporate it.3Food and Drug Administration. Food Allergies
Selling something unpackaged, like a loaf of bread at a farmers’ market? The labeling information still has to reach the buyer, usually on an invoice or receipt. For online sales, all labeling information has to be posted on your website before you accept payment; the physical label goes on the product at delivery.4State of Texas. Texas Health and Safety Code 437.0194 – Certain Sales by Cottage Food Production Operations Prohibited or Restricted
TCS foods carry extra requirements on the label: safe handling instructions and temperature requirements so the buyer knows how to store the product.
Where and How You Can Sell
The law allows several sales channels. All of them end with the food reaching a consumer, one way or another.
In-Person Sales
You can sell directly to consumers at your home, at farmers’ markets and farm stands, and at municipal, county, or nonprofit fairs, festivals, and events.2State of Texas. Texas Health and Safety Code Chapter 437 – Section 437.0196 Free samples are allowed anywhere, which helps for building a customer base before market days.
Online Sales With Personal Delivery
You can take orders and payments online, but you cannot ship products through the mail or use a third-party delivery service. The food has to be personally delivered by you, an employee, or a member of your household. All required labeling information has to be posted on your website before you accept payment.4State of Texas. Texas Health and Safety Code 437.0194 – Certain Sales by Cottage Food Production Operations Prohibited or Restricted
The personal delivery piece is where people slip up. Taking orders through Instagram or a website is fine. Handing the package to a FedEx driver or hiring a DoorDash contractor to make the drop is not. You, someone who works for you, or someone who lives with you has to physically hand the food to the buyer.
Wholesale Through a Cottage Food Vendor
SB 541 added a wholesale channel. You can sell at wholesale to a “cottage food vendor,” who then resells directly to consumers at farmers’ markets, farm stands, food service establishments, or retail stores. TCS foods cannot be sold at wholesale. The vendor has to register with DSHS. Products sold through a vendor also need the production date on the label.1Texas Department of State Health Services. Texas Cottage Food Production
You still cannot sell directly to grocery stores, restaurants, or other retailers for resale on your own. The wholesale option only works through registered cottage food vendors.
Taxes on Cottage Food Income
Cottage food income is taxable at the federal level whether or not a payment processor sends you a Form 1099-K. You report it on Schedule C of your individual return as self-employment income. That means regular income tax plus self-employment tax (15.3 percent for Social Security and Medicare) on the net profit.
Payment processors like Venmo, PayPal, Square, and Cash App only have to send you a Form 1099-K if gross payments exceed $20,000 and you have more than 200 transactions in a calendar year.5Internal Revenue Service. IRS Issues FAQs on Form 1099-K Threshold Under the One Big Beautiful Bill Falling below that threshold does not make the income tax-free. It just means the IRS will not get an automatic report from the processor.
Track expenses from the start. Ingredients, packaging, farmers’ market booth fees, food handler training, and mileage on deliveries are deductible against your profit. If your net self-employment income hits $400 or more for the year, you have to file a return and pay self-employment tax.
Insurance Gaps in Homeowners Policies
Standard homeowners policies exclude business activities in the home. If a customer gets sick from your product and files a claim, your homeowners insurance will almost certainly deny it. The same applies to business equipment or inventory damaged in a fire or flood. Even part-time food production usually falls outside the coverage.
Product liability insurance fills the gap. Policies for small food producers start around $300 a year, with the exact cost depending on revenue, location, and coverage. A policy will not prevent a lawsuit, but it keeps a single bad batch from wiping out your savings. For anyone selling regularly at markets or building an online following, it is worth pricing out early.
Local Zoning and HOA Rules
Texas cottage food law preempts most state-level regulation, but it does not override local zoning ordinances or homeowners association rules. Some cities restrict home-based businesses in residential zones, limit customer traffic, or require a home occupation permit. An HOA can have its own ban on commercial activity. None of that shows up in the state statute, and none of it will stop DSHS from letting you register.
Before spending money on supplies or advertising, check with your city or county planning department and read your HOA covenants if you have them. A DBA filing may also be required locally if you operate under any name other than your own legal name. These local rules sit outside the state cottage food framework, but violating them can bring fines or cease-and-desist orders that shut you down regardless of your state compliance.