Texas Cottage Food Law 2026: Sales Cap, Allowed Foods, and Label Rules Explained

Texas allows home bakers to sell baked goods, candy, jams, and — since September 1, 2025 — most other homemade foods directly to consumers under its cottage food law, with an annual gross income cap of $150,000 that the state adjusts each year for inflation. The governing statute is Texas Health and Safety Code, Chapter 437, administered by the Texas Department of State Health Services (DSHS). No permit, license, or inspection is required by the state or by local governments, but you must complete an accredited food handler course before you sell.

Last verified: September 2026. Laws change — confirm current rules at the Texas DSHS Cottage Food Production page.

This is general information, not legal advice. Consult a licensed attorney or DSHS for guidance specific to your situation.

Key takeaways

• Texas cottage food operators can earn up to $150,000 per year in gross income from food sales — tripled from $50,000 by Senate Bill 541, effective September 1, 2025, and indexed to inflation going forward.
• No state or local permit, license, fee, or kitchen inspection is required. Cities and counties are barred from regulating cottage food production. You do need to complete an accredited basic food handler course.
• You can sell directly to consumers anywhere in Texas — at home, at farmers' markets and farm stands, at fairs and events, and through online orders — but online orders must be personally delivered by you, an employee, or a household member. Mail and carrier shipping are not allowed.
• Almost any food is allowed except meat and poultry, seafood, ice cream and other frozen desserts, low-acid canned goods, CBD/THC products, and raw milk. Refrigerated (TCS) foods such as cheesecake and cream cheese frosting are now allowed if you register with DSHS and follow temperature and labeling rules.
• Every package must carry a label with the operation's name, its address or DSHS registry number, the product name, common allergens, and the exact state-mandated statement.
• Non-TCS foods can now reach stores and restaurants through a registered cottage food vendor; TCS foods cannot be sold wholesale.

What the Texas cottage food law covers

Texas defines a cottage food production operation as an individual (or, since 2025, a nonprofit organization) producing food in a home kitchen for direct sale to consumers or to a cottage food vendor. The law was expanded in 2019 by Senate Bill 572, which broadened the allowed food list and permitted online orders with personal delivery, and rewritten in 2025 by Senate Bill 541, which raised the cap, opened the door to refrigerated foods, and stripped local governments of the power to permit, fee, or inspect cottage food operations.

The statute sits in Texas Health and Safety Code, Chapter 437 (definitions in Section 437.001; the cottage food sections run from 437.0191 onward). The Texas DSHS oversees food safety statewide, but cottage food operations are specifically exempted from the requirement to obtain a food manufacturer's license — provided you stay within the rules below.

Annual sales cap and what counts

The cap is $150,000 in gross income from food sales per year, and DSHS adjusts that figure annually using the Consumer Price Index for All Urban Consumers (CPI-U). Gross means total revenue before expenses. If you sell $150,000 worth of cookies but spent $60,000 on ingredients and packaging, you have hit the cap — your profit does not matter for this calculation.

To put that in perspective: a baker selling decorated sugar cookies at $48 per dozen could fill about 3,125 dozen orders per year before reaching the cap. That is roughly 260 dozen per month, or about 60 dozen per week. For nearly every single-person home bakery, this is a comfortable ceiling. If you outgrow it, you would need to move into a licensed commercial kitchen.

When you are setting your prices, think carefully about your cost of goods. A dozen cookies that costs you $14 in ingredients and packaging and sells for $48 gives you a $34 margin — but only if you have accounted for everything. Pricing baked goods for a home bakery is one of the places where most new bakers leave money on the table.

Permits, registration, and training

Texas is one of the most permissive states for cottage food. Here is what you do not need:

• No permit or license from DSHS
• No permit, license, or fee from your city or county — Health and Safety Code Chapter 437 now bars local governments from requiring any
• No home kitchen inspection (DSHS retains emergency and recall authority if a product poses an immediate and serious threat)

Here is what you do need:

• An accredited basic food safety course for food handlers. The operator must complete a food handler education or training program accredited under Health and Safety Code Chapter 438, Subchapter D. DSHS also accepts a Food Manager Certification from an accredited program. These courses are inexpensive and available online; a Texas food handler certificate is valid for two years unless the card shows a different expiration date.
• DSHS Online Licensing Registry — only in some cases. Registration is required if you sell time/temperature-control-for-safety (TCS) foods or act as a cottage food vendor. It is optional otherwise, but registering lets you print your DSHS identification number on labels instead of your home address. Confirm with DSHS whether any fee applies to the registry.

You will still need a Texas Sales Tax Permit from the Texas Comptroller if you sell taxable items. Many bakery items sold without utensils are not taxable in Texas, but candy and some other products may be. Confirm your products' status with the Comptroller; the permit itself is free.

If you plan to operate under a business name other than your own legal name, you will need to file a DBA ("doing business as") with your county clerk for a small fee that varies by county.

Foods allowed under Texas cottage food law

Since September 1, 2025, the rule is nearly the reverse of the old law: you can sell any food except the prohibited categories listed in the next section. The statute still names the traditional categories, which remain the core of most home bakeries:

• Baked goods — bread, cookies, cakes, pastries, pies, muffins, brownies, sweet breads
• Candy and confections — fudge, pralines, toffee, brittle
• Coated and uncoated nuts
• Nut butters
• Fruit butters
• Canned jams, jellies, and preserves
• Dried herbs and herb mixes
• Dry baking mixes and cereals — cookie mixes, cake mixes, pancake mixes, granola
• Dehydrated fruits and vegetables
• Popcorn and popcorn snacks
• Vinegar and mustard
• Pickled fruits and vegetables (pH of 4.6 or below)
• Fermented vegetables (pH of 4.6 or below)
• Roasted coffee and dried tea
• Frozen raw and uncut produce
• Any other non-TCS food
• TCS foods — foods that need refrigeration, such as cheesecakes, custard and cream pies, and cream cheese frosting — if you register on the DSHS Online Licensing Registry, store and deliver the food at a safe temperature, and add the date made and the safe-handling statement to the label

If you bake gluten-free goods — say, almond flour-based cookies or brown rice flour bread — those are allowed. The law does not distinguish between gluten-free and conventional baked goods.

Foods that are prohibited

The statute excludes six categories outright, regardless of registration:

• Meat, meat products, poultry, or poultry products
• Seafood — fish, shellfish, and products made from them
• Ice and ice products — shaved ice, ice cream, frozen custard, popsicles, gelato, and other frozen desserts
• Low-acid canned goods
• Products containing CBD or THC
• Raw milk and raw milk products

A practical example: you can sell a buttercream-frosted cake with no registration at all, and you can now sell a cake with cream cheese frosting if you are registered with DSHS, keep it refrigerated through delivery, and label it as a TCS food. If you would rather skip the registry and the cold chain, stick to non-TCS recipes.

Where you can (and cannot) sell

Texas allows cottage food sales through several channels, but with clear limits:

The core of the statute is still the direct sale to consumers. What changed in 2025 is the cottage food vendor: a person or business in Texas that signs a contract with you, registers with DSHS, and then sells your non-TCS products directly to consumers at a farmers' market, a farm stand, a food service establishment, or any retail store. A coffee shop can carry your muffins under this arrangement; a grocery store can stock your cookies. Refrigerated (TCS) products cannot go through a vendor at all.

One area that confuses bakers: online ordering. You can take orders through a website, Instagram, or Facebook, but the actual handoff must be in person — either the customer picks up from you, or you (or an employee or household member) deliver to them. You cannot ship products through USPS, UPS, or FedEx under the cottage food exemption.

Label requirements

Every product you sell must have a legible label. Texas law requires the following information on each package:

1. The name of the cottage food production operation
2. Your address — or your DSHS registry identification number if you have registered on the DSHS Online Licensing Registry
3. The name of the product — "Chocolate Chip Cookies," "Lemon Blueberry Muffins," etc.
4. Common allergen information — DSHS lists eggs, tree nuts, soy, peanuts, milk, wheat, and sesame; declare any that your product contains
5. The exact required statement: "THIS PRODUCT WAS PRODUCED IN A PRIVATE RESIDENCE THAT IS NOT SUBJECT TO GOVERNMENTAL LICENSING OR INSPECTION."

Additional elements apply to certain products: pickled, fermented, and acidified foods need a batch number; products sold through a cottage food vendor need the date made; and TCS foods need the date made plus this statement in at least 12-point type: "SAFE HANDLING INSTRUCTIONS: To prevent illness from bacteria, keep this food refrigerated or frozen."

A practical label for a bag of gluten-free almond flour cookies might look like this:

Almond Flour Chocolate Chip Cookies
Made by: Maria Gonzalez, 1234 Oak Street, Austin, TX 78701
Ingredients: Almond flour, butter, sugar, eggs, chocolate chips (sugar, cocoa butter, chocolate liquor, soy lecithin), vanilla extract, baking soda, salt.
Contains: Tree nuts (almonds), milk, eggs, soy
THIS PRODUCT WAS PRODUCED IN A PRIVATE RESIDENCE THAT IS NOT SUBJECT TO GOVERNMENTAL LICENSING OR INSPECTION.

Quick-reference summary table

Practical tips for Texas cottage food bakers

Keep records of every sale

Even though Texas does not require you to report your sales to DSHS, you need to track your gross revenue to prove you are under the $150,000 cap if questioned. A simple spreadsheet works. Record the date, product, quantity, and dollar amount for every transaction. This also makes tax time easier — you will report cottage food income on your federal tax return regardless of whether Texas collects sales tax on it.

Check your city and county rules

Since September 1, 2025, local health departments may not require cottage food operators to register, obtain a permit, pay a fee, or submit to an inspection. What local governments can still enforce are ordinary rules that apply to any home business — zoning, signage, parking, and traffic — and your HOA may have its own restrictions. Check those before your first sale, and if a local official asks for a cottage food permit, point them to Health and Safety Code Chapter 437.

Get your pricing right from the start

With a $150,000 cap, you have room to build a real income — but only if your margins are healthy. A baker selling custom cakes at $150 each with $55 in costs per cake earns $95 in gross profit per order. At 10 cakes per week, that is $950 per week in gross profit, or about $49,400 per year — on gross sales of $78,000. That would have blown past the old $50,000 cap; under the current law it sits comfortably inside the limit.

Think about this math before you set prices. If you are selling lower-priced items like cookies or bread, your path to the cap is longer, but your margins may be thinner.

Consider liability insurance

Texas does not require cottage food operators to carry liability insurance, but one foodborne illness complaint — even an unfounded one — can cost thousands in legal fees. Policies designed for home-based food businesses typically run $250–$500 per year. That is a small price for peace of mind when you are selling food to strangers.

Think about your business structure

Many Texas cottage food bakers operate as sole proprietors, which is the simplest structure. But if your sales grow toward the $150,000 cap, forming an LLC can protect your personal assets. Filing an LLC in Texas costs $300 with the Secretary of State. Weigh the cost against your risk level and expected revenue.

When you outgrow the cottage food law

If you hit the $150,000 cap — or if you want to ship products, sell refrigerated foods through stores, or sell any of the prohibited categories — you will need to move into a licensed commercial kitchen. Options include:

• Renting time in a shared commercial kitchen — typically $15–$30 per hour in Texas metro areas
• Building out a licensed kitchen in your home — possible in some Texas jurisdictions, but requires a full health department inspection and can cost $10,000–$40,000 depending on what you need
• Renting a standalone commercial space — the most expensive option, but gives you the most flexibility

You will also need a food manufacturer's license from DSHS, which involves an application, an inspection, and an annual renewal fee. The fee varies by operation size — check the DSHS website for current amounts.

Gluten-free baking under Texas cottage food rules

If you specialize in gluten-free baked goods, the cottage food law does not impose any extra requirements beyond what applies to all cottage food operators. However, there are practical considerations worth noting.

Cross-contamination is a real concern when you bake in a home kitchen that also handles wheat flour. If you market your products as "gluten-free," you are making a claim that customers with celiac disease or gluten sensitivity will rely on. The FDA defines "gluten-free" as containing less than 20 parts per million of gluten. You do not need to test every batch, but you should have a clear protocol — dedicated equipment, thorough cleaning, and careful ingredient sourcing. Our guide on gluten-free baking fundamentals covers the basics of avoiding cross-contamination.

Popular gluten-free cottage food items in Texas include almond flour cookies, cassava flour tortillas, and brown rice flour banana bread. These are all non-TCS and clearly within the allowed food categories.

Frequently asked questions

Do I need a permit to sell baked goods from home in Texas?

No. Texas does not require a permit or license for cottage food production operations, and since September 1, 2025, cities and counties may not require one either. You do need to complete an accredited basic food handler course, and you must register on the DSHS Online Licensing Registry if you sell refrigerated (TCS) foods.

What is the annual sales limit for Texas cottage food in 2026?

The base cap is $150,000 in gross income from food sales per year, and DSHS adjusts it annually for inflation using the CPI-U — check the DSHS cottage food page for the current figure. This is total revenue, not profit. Once you exceed the cap, you must stop selling under the cottage food exemption or obtain a food manufacturer's license and operate from a licensed commercial kitchen.

Can I sell cottage food online in Texas?

You can take orders online — through a website, social media, or messaging apps — but the product must be delivered in person by you, an employee, or a member of your household, or picked up by the customer. Shipping through USPS, UPS, FedEx, or any mail carrier is not allowed under the cottage food law, and you cannot sell to consumers outside Texas.

Can I sell cream cheese frosted cakes under Texas cottage food law?

Yes, since September 1, 2025 — with conditions. Cream cheese frosting is a time/temperature-control-for-safety (TCS) food. To sell TCS foods you must register on the DSHS Online Licensing Registry, store and deliver the product at a safe temperature, and add the date made and the 12-point safe-handling statement to the label. Buttercream made with butter, powdered sugar, and vanilla is generally treated as non-TCS and needs none of that. If you are unsure about a specific recipe, contact DSHS for clarification.

Do I need to list allergens on my cottage food labels in Texas?

Yes. Texas requires cottage food labels to include common allergen declarations — DSHS lists eggs, tree nuts, soy, peanuts, milk, wheat, and sesame. You also need to include your operation's name, your address or DSHS registry number, the product name, and the exact statement: "THIS PRODUCT WAS PRODUCED IN A PRIVATE RESIDENCE THAT IS NOT SUBJECT TO GOVERNMENTAL LICENSING OR INSPECTION." For gluten-free products, follow FDA labeling guidelines if you make a gluten-free claim.