How to Start a Class A Cottage Food Business in Tennessee

Tennessee makes it surprisingly easy to turn your kitchen hobby into a legitimate food business. Unlike many states with restrictive cottage food laws, Tennessee allows online sales, has no income cap, and permits a broad range of foods — making it one of the most entrepreneur-friendly cottage food states in the country.

If you've been selling baked goods to friends or thinking about monetizing your jam-making skills, Tennessee's Class A cottage food law might be exactly what you need to get started.

Who this guide is for

This step-by-step guide walks you through setting up a Class A cottage food operation in Tennessee. You'll learn the legal requirements, permitted foods, sales restrictions, and practical steps to launch your business. Whether you're planning a weekend farmers market booth or building an online cookie business, this covers what you need to know.

Understanding Tennessee's cottage food law

Tennessee's cottage food law allows you to prepare and sell certain non-hazardous foods from your home kitchen without a commercial food service license. The law creates two categories: Class A and Class B operations, with Class A being the more restrictive but simpler option.

As a Class A cottage food producer, you can sell directly to consumers within Tennessee — at farmers markets, from your home, through online platforms, or anywhere else you can connect with end customers. You cannot sell to restaurants, grocery stores, or other businesses for resale (that requires Class B certification).

The key advantage? No income limits. While many states cap cottage food sales at $15,000 or $50,000 annually, Tennessee places no ceiling on Class A operations. If your sourdough business takes off, you won't hit an arbitrary wall.

Step 1: Confirm your food products are allowed

Tennessee permits most non-potentially hazardous foods, but you'll want to verify your specific products before investing time in setup. The state allows:

• Baked goods (breads, cookies, cakes, pastries)
• Jams, jellies, and preserves
• Dried herbs and herb blends
• Roasted coffee beans and tea blends
• Honey and maple syrup
• Candy and confections
• Dried fruits and vegetables
• Granola and trail mixes
• Vinegars and flavored oils

Prohibited items include: Fresh produce, meat products, dairy items, canned vegetables, salsa, anything requiring refrigeration, and foods containing alcohol.

If you're unsure about a specific product, contact the Tennessee Department of Agriculture at 615-837-5103. Getting clarity upfront prevents problems later.

Step 2: Set up your home kitchen properly

Your home kitchen becomes your production facility, so it needs to meet basic food safety standards. Tennessee doesn't require kitchen inspections for Class A operations, but you're still responsible for safe food handling.

Essential kitchen requirements:

• Clean, sanitized surfaces and equipment
• Adequate refrigeration and storage space
• Proper handwashing facilities
• Separate storage for cottage food ingredients and personal food
• No pets in the kitchen during food preparation

Consider investing in dedicated cutting boards, mixing bowls, and storage containers for your cottage food operation. This prevents cross-contamination and helps you stay organized as production scales up.

Pro tip: Keep detailed cleaning logs even though they're not required. If you ever get a complaint or need to trace an issue, documentation protects your business.

Step 3: Handle business registration and taxes

While Tennessee doesn't require a cottage food license, you still need to handle standard business requirements.

Business registration: Register your business name with the Tennessee Secretary of State if you plan to operate under anything other than your legal name. This typically costs around $20 for a trade name registration.

Sales tax: Register for a Tennessee sales tax permit through the Department of Revenue. Cottage food sales are subject to Tennessee's sales tax rate (currently 7% statewide, plus local taxes). You'll collect tax from customers and remit it quarterly.

Federal tax ID: Consider getting an Employer Identification Number (EIN) from the IRS, even if you don't plan to hire employees. This separates your business taxes from personal taxes and looks more professional when opening business bank accounts.

Step 4: Create proper food labels

Tennessee requires specific labeling for cottage food products. Every item you sell must include:

• Product name
• Your name and home address
• Ingredient list in descending order by weight
• Net weight or count
• The statement: "This product is home produced and processed"

Sample label format:

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Grandma's Chocolate Chip Cookies

Made by: Sarah Johnson

123 Oak Street, Nashville, TN 37203