How to Start a Cottage Food Business in Texas (2025 Guide)

Texas just became one of the most cottage food-friendly states in America. Thanks to Senate Bill 541, which took effect September 1, 2025, the Lone Star State raised its cottage food sales cap to $150,000 annually and expanded where you can sell your homemade goods. If you've been dreaming of turning your kitchen skills into income, there's never been a better time to start.

What You'll Learn

This guide walks you through everything you need to know about starting a cottage food business in Texas under the new 2025 laws. You'll discover which foods you can legally sell, how much you can earn, where you can sell your products, and exactly what steps to take to get your business off the ground legally.

What Foods Can You Sell?

Texas cottage food law covers non-potentially hazardous foods that don't require refrigeration for safety. Here's what's allowed:

Baked Goods:

• Breads, rolls, biscuits
• Cakes, cupcakes, cookies
• Pies (fruit, nut, custard-free varieties)
• Muffins, scones, pastries
• Granola, cereal

Confections:

• Candy (hard candy, fudge, toffee)
• Chocolate-covered items (pretzels, nuts, dried fruit)
• Caramel corn, kettle corn
• Cotton candy

Preserved Foods:

• Jams, jellies, preserves
• Fruit butters
• Pickled vegetables (with proper pH)
• Dried herbs and herb mixes

Other Allowed Items:

• Roasted nuts and nut mixes
• Dried fruits and vegetables
• Vinegar and flavored vinegars
• Dry mixes (cake, pancake, soup)

What You Cannot Sell:

Texas prohibits cottage food operations from selling potentially hazardous foods, including fresh meat, poultry, seafood, dairy products requiring refrigeration, fresh produce, foods containing cream cheese or custard, and anything that requires time and temperature control for safety.

Sales Limits and Revenue Rules

The 2025 update to Texas cottage food law significantly increased earning potential:

Annual Sales Cap: $150,000 per year (up from the previous $50,000)

No Daily Limits: You can sell as much as you want on any given day, as long as your annual total stays under $150,000

This puts Texas among the highest cottage food sales caps in the nation, making it genuinely possible to build a substantial food business from your home kitchen.

Where You Can Sell

Texas cottage food operators have multiple sales channels available:

Direct Sales:

• At your home (by appointment or scheduled pickup)
• Farmers markets
• Farm stands
• Special events and festivals

Third-Party Venues (New in 2025):

• Retail stores that agree to sell your products
• Coffee shops and cafes
• Gift shops and boutiques

Online Sales:

Texas allows online sales of cottage food products, but with an important restriction: you can only ship within Texas. You cannot sell to customers in other states, even if they're willing to drive across state lines to pick up their order.

Wholesale: Limited wholesale is permitted to retail food establishments within Texas, but check with individual retailers about their policies for accepting cottage food products.

Registration Requirements

Texas uses a registration system rather than requiring permits or licenses for cottage food operations.

Cost: Registration is free

Renewal: Annual renewal required

Processing Time: Typically 2-3 weeks

Required Information for Registration:

• Business name and operator contact information
• Home address where food will be produced
• Types of foods you plan to produce
• Projected annual sales
• List of ingredients for each product type

Step-by-Step Registration Process

1. Complete Food Safety Training

Before you can register, you must complete a food safety course from an approved provider. The Texas Department of State Health Services maintains a list of acceptable programs. This typically costs $10-50 and takes 2-4 hours to complete.

2. Gather Required Documentation

• Certificate of completion from food safety training
• Detailed product list with ingredients
• Sample labels for each product type
• Business formation documents (if applicable)

3. Submit Registration Application

File your cottage food registration with the Texas Department of State Health Services online at dshs.texas.gov. Include all required documentation and information about your planned operation.

4. Wait for Approval

The state has 30 days to review your application. Most registrations are approved within 2-3 weeks if all documentation is complete and accurate.

5. Renew Annually

Your registration expires one year from the date of approval. Mark your calendar and submit renewal paperwork 30-60 days before expiration to avoid any lapse in authorization.

Labeling Requirements

Texas cottage food products must include specific information on every label:

Required Label Information:

• Product name
• Ingredient list (in descending order by weight)
• Net weight or volume
• Your business name
• Statement: "This food is made in a home kitchen and has not been inspected by the Department of State Health Services or a local health department"

Important Note: Unlike many states, Texas does not require your home address on the label. You can use a business name and contact method (phone number or email) instead, which many home-based operators appreciate for privacy reasons.

Allergen Warnings: Include "Contains [allergen]" statements for any of the major food allergens: milk, eggs, fish, shellfish, tree nuts, peanuts, wheat, and soybeans.

Kitchen and Inspection Requirements

One of the biggest advantages of cottage food operations in Texas is that no kitchen inspections are required. Your home kitchen must meet basic sanitation standards, but you won't have health department officials visiting your home.

Kitchen Standards:

• Clean, sanitary food preparation area
• Proper food storage (off the floor, covered containers)
• Safe water supply
• Adequate lighting and ventilation
• Separate storage for cottage food ingredients and finished products

Best Practices:

• Designate specific storage areas for cottage food business ingredients and supplies
• Clean and sanitize surfaces before each production session
• Keep pets away from food preparation areas
• Maintain temperature logs for any temperature-sensitive ingredients

Record Keeping Requirements

Texas requires cottage food operators to maintain certain records:

Sales Records: Track all sales, including customer names (for direct sales), products sold, quantities, and dates

Ingredient Records: Maintain documentation of ingredient sources and purchase dates

Production Records: Log what you produce, when you produce it, and batch sizes

Keep these records for at least one year. They're essential for tracking your progress toward the annual sales cap and may be requested if there are any food safety concerns.

Special Considerations for 2025

The recent updates to Texas cottage food law bring several new opportunities and considerations:

Higher Income Potential: The jump from $50,000 to $150,000 in annual sales means cottage food businesses can now generate substantial household income or even become full-time ventures.

Third-Party Sales: The ability to sell through retail partners opens up new distribution channels, but also requires building relationships with store owners and maintaining consistent product availability.

Scaling Challenges: As your business grows closer to the $150,000 cap, you'll need to decide whether to transition to a commercial food business or find ways to maximize profitability within the cottage food framework.

Common Mistakes to Avoid

Ignoring the Intrastate Rule: Remember that all sales must be to Texas customers. Don't ship across state lines, even if customers request it.

Inadequate Record Keeping: Poor sales tracking can lead to accidentally exceeding the annual cap, which would disqualify you from cottage food status.

Skipping Food Safety Training: This isn't optional—you must complete approved food safety training before registering.

Improper Labeling: Missing required label elements can result in fines and force you to relabel existing inventory.

Next Steps

Ready to start your Texas cottage food business? Here's what to do next:

1. Complete your food safety training

2. Develop your product recipes and test them with friends and family

3. Research your local market to understand pricing and demand

4. Create your labels and branding materials

5. Register with the Texas Department of State Health Services

The cottage food industry in Texas is thriving, with thousands of operators building successful businesses from their home kitchens. Whether you're looking to earn extra income or build a full-time food business, cottage food offers an accessible entry point with minimal startup costs and regulatory burden.

At Koti, we help cottage food producers across Texas build their businesses with tools for online sales, customer management, and compliance tracking. Ready to turn your kitchen skills into income? Visit koti.market/sell to learn how we can support your cottage food journey.