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cottage food community

Maryland

Maryland’s laws are quite restrictive, only allowing cottage food businesses to sell at farmers markets or at public events, and limiting them to $25,000 of sales per year.  However, there are no licensing procedures or fees, so it’s really easy to get started.

Selling

The laws state that the food must be sold at “a location in a farmer’s market or at a public festival or event where raw agricultural products are sold”.

Allowed Foods

Honey must be unflavored.

Only "non-potentially hazardous" foods are allowed, but certain non-PHFs may not be allowed. Most foods that don't need to be refrigerated (foods without meat, cheese, etc.) are considered non-potentially hazardous. Learn more

Limitations

Limitations
Sales are limited to $25,000 per year

Business

Cottage food businesses do not have to collect state sales tax in Maryland.

Labeling

Sample Label

Chocolate Chip Cookies

"Made by a cottage food business that is not subject to Maryland's food safety regulations." (10-point type)


Forrager Cookie Company

123 Chewy Way, Cookietown, MD 73531


Ingredients: enriched flour (wheat flour, malted barley flour, niacin, iron, thiamin mononitrate, riboflavin, folic acid), butter (cream, salt), semi-sweet chocolate (sugar, chocolate, cocoa butter, milkfat, soy lecithin, natural flavors), brown sugar, granulated sugar, eggs, vanilla extract (vanilla bean extract, alcohol, sugar), baking soda, salt (salt, calcium silicate)


Contains: milk, eggs, wheat, soy


NET WT 2 lb 4 oz (1.02 kg)


If any nutritional claims are made, they must adhere to the federal labeling requirements.

Resources

Contacts

Lisa Staley

Job Title
Chief of Department
Organization
Center for Facility & Process Review, Office of Food Protection, Maryland Department of Health and Mental Hygiene
Email
lisa.staley@maryland.gov
Telephone
410-767-8407

Deanna Baldwin

Job Title
Administrator
Organization
Food Quality Assurance, Maryland Department of Agriculture
Email
deanna.baldwin@maryland.gov
Telephone
410-841-5769
Law Dates
October 2012
SB 550
This page was last updated on

Comments

We’re a group of volunteers and starting a new scheme in our community.
Your site provided us with valuable information to work on. You have done an impressive job and our entire community will be thankful to you.

Hi there! This is kind of off topic but I need some help
from an established blog. Is it hard to set up your own blog?

I’m not very techincal but I can figure things out pretty quick.

I’m thinking about making my own but I’m not sure where to start.
Do you have any ideas or suggestions? Many thanks

    I’m glad you’re interested in improving the law in MD… it definitely needs it! In fact, I’d like to put your petition above in the resources area so that it’s more visible. However, there are some things I think could be improved before I would ask this website’s visitors to sign it.

    First of all, I see you’ve addressed your letter to Lisa in the health dept. The health dept’s job is to follow and enforce the law, not change it or create new laws. Since the venue restriction in MD is written directly into the law, changing it will require a bill to be introduced into a legislative session.

    A cottage food law petition is usually targeted toward a congressman or representative that can help initiate a bill. I think it would be good for your petition to include a rough draft of how exactly you’d like to amend the existing law. If you were able to enter a bill into the next legislative session, it would eventually need to be reviewed by the health dept, and it’s at that point that Lisa would take notice. Hope that helps.

I live in Maryland and would like to sell my homemade cookies. Do I have to rent a commercial kitchen or can I use my own after it is inspected?

    You can use your own kitchen without needing an inspection, but you can only sell at farmers markets and some public events. If you want to sell your products elsewhere, then yes, you need a commercial license from the health dept.

What are the regulations regarding beverage sales? We are thinking of serving iced herbal tea at a farmers market. Could we have it in single serve cups with lids and wrapped straws with it?

Thanks,
Nick

Hi, I was thinking about selling my jars of jellies and jams but getting stated is so expensive. I was told about the Cottage Law and was very happy when I looked into. I do not understand 1 thing maybe you could help me with? If I get a spot in a farmers market do I have to have a permit? and if so can you give me some information on how and where to apply and the cost? Also is this a yearly thing or do you need a permit for every spot ( if it is a different market in a different location )? Also can I also do Salsa’s Chow Chows and Cowboy Candy ( Jalapeños ) ? Thanks so much for any and all information you can supply.

    You should check with your planning division to see if there are any requirements you need to adhere to. If not, then you don’t need a permit to sell at a farmers market. However, the farmers market may require one, and they will tell you the steps you need to take to get it.

    You cannot sell homemade canned vegetables.

Thank you for all the great info here! I was wondering if a home based business can use frostings like buttercream, Swiss/Italian/French meringue, etc, or if only shortening-based frostings or glazes would be acceptable. How do you determine if a frosting would be restricted? Thank you!

    Thank you for the info! I intend to call with several questions, so I will add this one to the list! On another note, I know you mentioned to the person before me that chocolate dipped items or home made chocolates are restricted. Does this also mean that cookies, cakes, etc cannot be drizzled with chocolate? If that is against the rules, does the same apply to white chocolate, which isn’t really chocolate at all?

    Most of my info is based on the two resources above. On those it doesn’t say anything about candy being allowed, which is the basis of my previous comment. I’m not sure at what point something goes from being a candy to a baked good. Everything is very ambiguous in Maryland… you could help a lot by sharing whatever you learn!

    Hello, again!

    So I spoke with a state inspector and went over numerous details of the cottage foods law. I’ll include all the details here. Sorry in advance for the length of the post! ^_^

    1) Frosting, fillings, & glazes
    -certain frosting based on butter margarine with a higher fat content are permitted
    -acceptable as long as these mixtures do not contain hazardous items requiring refrigeration and are shelf stable (for example, shortening based frostings are acceptable, as would be a peanut butter and confectioner’s sugar mixture, royal icing, etc)
    -a water chocolate panache recipe would be acceptable

    2) Toppings & Additions after Baking
    -essentially same rule of thumb: as long as it is shelf stable/does not include potentially hazardous ingredients then you are fine
    -you can add toppings after baking, including but not limited to candy pieces, coconut flakes, etc
    -fondant is acceptable
    -carob or other “chocolate” is acceptable
    -melting chocolate is acceptable
    -the inspector went over the law and, while not entirely sure, seemed to think that drizzling chocolate (not coating) would be acceptable
    -white chocolate seems to be viable as well

    3) Confections
    -same rule regarding shelf stable requirements and non potentially hazardous ingredients
    -the inspector indicated that non potentially hazardous and shelf stable candy was acceptable
    -he specifically indicated that caramels, marshmallows, and fudge were acceptable under cottage law

    4) Alcohol
    -acceptable as an ingredient that cooks off
    -if included as an ingredient that does not cook off, you need to contact your county liquor control offices, as there are regulations regarding alcohol as an ingredient (the inspector hadn’t heard of this, but when I spoke to the county in the past, they indicated that typical regulations indicate that alcohol cannot make up more than a certain volume/portion of the item)

    4) Labeling & Packaging
    -everything must be fully wrapped and packaged, at home, prior to event
    -on label, the font must be size 10 or larger
    -ingredients listed in descending order, from most to least
    -he was not 100%, but the inspector indicated that if a particular item is stored in a container, then that container or an obviously related placard may contain the warning and ingredient information while that individual item does not need to. For example, if I have individually wrapped biscotti in a jar for customers to take from, I can put the ingredient and warning label on the jar containing the biscotti and do not have to have it on the biscotti itself.

    5) Sales Venues
    -farmers’ markets require a county specific farmers’ market permit, which you should apply for AFTER confirming your spot at a market (although it’s not required to wait until after securing your spot, he STRONGLY recommended it)
    -any event

    I hope all that was helpful! ^_^ The inspector is sending me copies of the cottage law and related regulations, so if David wants, I can forward them to him and he can send them along to anyone here who is interested. (What do you think of that, David?)

    Have a great day, everyone! Good luck with your sweet endeavors!

    -Alyssa

    You can ONLY use sugar, shortening and water in your “buttercream”. I was just called today and told I cannot use milk or butter AT ALL. It’s considered “potentially hazardous” if you use them…..

    Yup, that’s what I was told regarding milk. In terms of butter, the inspector I spoke to indicated that certain butters and margarines posses a high enough fat content such that the resulting mixtures -baring the addition of other potentially hazardous ingredients- become shelf stable. It’s possible that he was wrong and the person you spoke to was right, or vice versa. Regardless, it’s still good to know that there are variations of buttercreams, fillings, etc that are viable for us to produce and work with! ^_^

    The inspector also said that to identify which butters and margarines are acceptable you should reference the FDA guidelines. Not sure where to find those, but that’s what he said.

    Thanks so much Alyssa… great info in this post!

    I do think the inspector was wrong about the labeling… customers should be carrying your label away with them. The only time you could label a container of biscotti instead of the biscotti itself is if the customer is buying the whole container. This allows the health or ag dept to use the label to find the address of production in the event of a complaint.

    Actually, even frostings made with milk are usually non-PHF. That doesn’t mean they’re allowed, but they are actually quite safe without refrigeration. Butter should definitely be allowed because it doesn’t even need to be refrigerated when it’s on its own. Generally-speaking, when you add sugar to something, it will stabilize whatever it’s added to. So a buttercream is even more stable than plain butter. If you are using a couple tbsps of milk in your frosting, all the sugar that goes into it will stabilize it. I think at the point that there is too much milk in your frosting, it wouldn’t really even be a frosting! Even some frostings with eggs, like swiss meringue buttercream, can be non-PHF, although those usually aren’t allowed in states. You might want to run that info by the inspector and ask him about it again.

    Oh and I would be interested in any extra resources (having them uploaded to a govt website would be much better). I already have the link to the law above.

    I’m glad that I could be helpful! With regards to labeling, I’ll probably be more conservative and err on the side of caution, even though the inspector seemed to think the container vs individual item was fine. And I agree with you on the buttercream being stabilized. He said something along those lines too but, like with packaging, I’d rather be overly cautious and avoid time and money consuming issues than use a technically legal recipe that raises eyebrows. I didn’t ask about meringue based frostings though, so I’ll check back with him to clarify.

    With regards to the documents the inspector sent me, how can I send them to you?

    Meringues are much more unsafe than a buttercream or standard frosting, so I doubt those would be allowed. I’ll send you an email about the documents.

Hi there. Thanks for the article. Great info. I am interested in selling chocolates that I temper, mold, and fill at home. Chocolate-dipped fruit as well. Would there be any restrictions on such an endeavor?

In the Maryland Cottage Food Law document, it states the label must say: : “MADE BY A COTTAGE FOOD BUSINESS THAT IS NOT SUBJECT TO MARYLAND’S FOOD SAFETY REGULATIONS.” (page 5 section II). Do you know if that is still accurate and necessary? That’s not a very inviting statement…

    Yeah… it’s not meant to be inviting. They want customers to be very aware that they are taking a risk by buying your product. It is still accurate and necessary. And thanks for mentioning it… somehow I didn’t mark the “statement” checkbox so it wasn’t showing up on here.

I am interested in starting a meal prep business from my home. This is where I prepare all meals for the week for people who are health conscious but too busy to do it themselves. Do these laws apply? I would advertise in gyms and corporate offices and then do an in person consultation and take meal orders from a prepared meal list.

I have a degree in patisserie and baking and have been making specialty cakes out of my home for the last few years in Texas. I recently relocated to Maryland and I am beginning to find out that I may no longer be able to continue this. Is this true?

I recently started a home based baking business. When setting up at farmers markets is it ok to take a future birthday cake order for example and have someone pay for it that day but pick it up from my house on the day needed or should they pick it up on the next farmers market day?

    I’m not sure. My guess is that the health dept would decide that the product must change hands at the farmers market, but you’ll need to call them for a final answer.

David,

Out of curiosity, would you know anything about the laws regarding a baking party business for children where we would bring the ingredients but the kids would do the baking in their own homes as a birthday party. Are there any special laws regarding this type of practice? The only thing my husband and I have thought of is liability insurance against food allergies. Can you think of any other Maryland food service law that would apply? We love in Baltimore County.

Thanks,
Jen

    If a mother decided to do this for her child’s birthday party, there wouldn’t be a law they’d have to adhere to. But since this is a business you are trying to start, you’d definitely be regulated in some way by the govt, but I neither know whether there is a law for this or if it’s even possible. This is a really special case that I haven’t heard of before, and I recommend you talk to the health dept about it.

Hi, my name is Hanna and I’m 16 years old. I want to sell my baked goods at near-by farmer’s markets, but I noticed that I need to have a “Business”. Can I just call my house a nice name and have that count? If not, what other requirements do I need to fulfill in order to have a legit businness? Thank you so much.

    You need to call your county’s planning department and see if you need to get a business license from the county or city. You don’t need a permit from the health or ag dept, but you will need approval from the farmers market.

Is there a cottage license you can present to a farmers market? I want to sell cookies at a farmers market. What do I need to present to them. I have liability insurance for baking at home but do I need more for the market? Any ideas about a system to do the labeling?

    I don’t think there’s any sort of license you need. The farmers market may disallow homemade foods, but they can allow them if they want without needing you to show a license from the health dept. Your local planning division may require you to get a business license though. I don’t know of a system for labeling… hopefully this site will eventually include one.

    The online resources aren’t very specific about what’s allowed. I think those would be fine, but you need to check with the health dept.

hi I’m Danielle I’m 11 yrs. and want to sell cookies with my 2 best friends
why cant I sell at a stand and why do girls scouts not have to have a vendors permit why do little kids selling have to have it
my church was selling food to raise for their mission trip they didn’t have a permit they never got in trouble I just want to sell cookies to my friends, family and school. they even know that I sell cookies and bake cookies that taste scrumptious

    I’m sure your cookies taste amazing. Have you tried selling your cookies and someone stopped you? If you set up a little stand outside your house, usually people won’t stop you because you’re 11-years-old, even though it is illegal. If you try to sell at school or on a busy street, you will probably get stopped eventually.

    There is a law in Maryland that states that all sold food must be made in a kitchen that the Health Department inspects. The reason Girl Scouts can sell the cookies without a permit is because those cookies were made in a commercial kitchen which has been inspected and approved. Home kitchens cannot be inspected or approved, so it wouldn’t be legal if the Girl Scouts made the cookies themselves.

    There is also a rule that specifically allows churches and other charities to have bake sales without having a permit. Because you are selling the cookies to make money for yourself, you cannot use that rule.

    You might like this article: http://forrager.com/2014/01/29/11-year-old-girls-cupcake-business-gets-shut/

    I don’t know for sure, but it appears that sauces like that are not allowed. You can call your health dept to see if they say anything different.

I just came up with a veggie burger (all grains) and would love to market it small scale, but seems so confusing. Anybody have any info or ideas? I would love to market it on the net via a website. ??? Thanks!

    Assuming that you are not frying it and it doesn’t need to be refrigerated, it may be allowed to be made from home. You need to call your health dept and check. If you can do this from home, then you would be allowed to advertise (but not sell) online.

Am I allowed to sample my food as a cottage food operation? Or would I need a food license? We sell cookies at a local farmers market.

    The law isn’t clear about this, but I would say that if your farmers market will allow you to do samples, then you can do them.

    I have not confirmed whether or not those items are allowed, and you should call the health dept for more info. If you get a clear answer, please let us know!

Hi David-

I’m interested in preparing hummus type bean dips for sale at MD farmer’s markets. Does this fall under cottage food? If not, what license would I need to obtain? Thanks!

What about dried herbs, such as herbal tea blends or tinctures? They would not be herbs I grow myself, but would be herbs I purchase in bulk supply and create my own blends with. Thank you in advance : )

    I’m really not sure if dried herbs are allowed or if you’d even need to use the cottage food law to repackage commercial items. I recommend calling your health dept.

David,
My 15 year old daughter sold cupcakes at a neighborhood yard sale and received lots of positive feedback. She wants to start a “business” selling locally via the internet and social media. Do the Cottage Food Laws apply to kids? Is there a minimum income amount before the laws apply?

    The laws do apply to kids and there is no minimum, but in this case, your daughter’s business is not covered by the cottage food law. She needs to only sell at farmers markets and events (she can advertise, not sell, online) if she is using your home kitchen. If she were to sell at other venues, she’d need to get a commercial license. http://forrager.com/faq/#commercial

I was asked to bake for several events such as at a wedding and a baby shower….they are willing to give me money for it. Am I allow to do this? Especially if I am not interested in becoming a baker anyways.

When they mentioned “public events”, does that include neighborhood picnics, church events, at a club (if owner is willing), & boutiques?

    No it wouldn’t. In Maryland, the event specifically needs to have an agricultural focus — perhaps like a county fair. If you’re not one of many vendors at the event, then it’s probably not included. There is a separate allowance for events like church bake sales, if you’re not selling for personal profit. http://forrager.com/faq/#nonprofit

Thanks for answering all these questions. By reading through this I have gotten the answer to many of my questions. Can you tell me if hot sauce/hot pepper paste is allowable?

    I don’t think almond butters will be allowed, but the law is not very specific about what is and is not allowed. You should call your health dept to verify.

Hi! My friend and I are starting a baking business. We have found a commercial kitchen that will allow us to bake in their facility. What other requirements are there before we can begin our business?

    If you’re using a commercial kitchen rather than a home one, then you need to use standard food laws instead of the cottage food law on this site. I’d recommend you call your health dept to learn what the requirements are.

Hi there. So I am reading about the sales tax on recent comments but I am still confused. I am planning on selling cupcakes and muffins at local farmers markets that I will bake out of my home. Is it different if I sell one single cupcake or if I sell a dozen of them? I’m not sure if it makes a difference but would just like this clarified! Thanks!

Hi.
I make vanilla and cocoa extracts that I would like to sell at farmers markets. They are tinctures, made with alcohol and vanilla beans or cocoa nibs. Could these possibly fall under the cottage law? Thank you!

Hi!
This is a really helpful article. I’m thinking of starting a business in MD where I teach food preservation. I’ve called both the city and the state health departments and they haven’t been very helpful. The idea is basically I would go into a person’s home and teach them how to make jam or pickles or something, or I would host events at community centers or churches doing the same thing. It’s a unique situation because although I am charging money for the class I’m really selling the learning experience and not food – however the participants will leave the class with a jar of preserves that they helped make. Do you think cottage laws apply here?

    That is an interesting and unique concept. I’ve dealt with health depts enough that I wouldn’t be surprised if they didn’t exactly warm up to the idea.

    No, the cottage food laws would not apply. You probably won’t be able to legally do this unless you are teaching in a commercial kitchen space. You might look into something that’s gotten fairly popular recently (which I’m fairly ignorant about) — I believe chefs are hired to come to a home and prepare a custom meal, and now there are many sites out there for those services. I’m still not sure if it’s legal though.

Hi David,
I am interested in selling confections (mainly marshmallow and caramels). Does candy fall under the cottage laws in Maryland? Thank you.

    It’s possible (if not probable) that those would be allowed. I haven’t found anything online to verify that candy is allowed, but if you talk to your health dept, my guess is that they would allow it. The law only says “nonhazardous” goods, and marshmallows and caramels are both nonhazardous.

Hello David,

My question is this ..Selling bulk nuts,mixes,dried fruits,gummy bears, and the like in the state of maryland ..selling in open aired markets (flea markets) and festivals like plant shows ,boat shows,,etc…how would you go about this ..ie , licenses…permits,etc..can these items be ordered and shipped directly to your house and then housed there between shows or market dates to be sold in bulk in 1/4 lbs , 1/2 lbs and 1 lbs…
please assit
thank you
vanessa

    It sounds like you’re talking about reselling, rather than selling items produced in your home. In this case, these cottage food laws do not apply. You may only need a seller’s permit to do this, but you should check with your health dept to see what the requirements are. Sorry, I don’t really know much about resales.

Hi David,
What would be considered a public venue/ event? Would a job be considered public if it is open to the public? Does the area have to be a farmers market or would a flea market per say, be considered a public venue? Are events ok if open to the general public or is it ok to take orders from people and sell them to people directly for public events?
How are taxes done in situations where people are not selling their items in public areas? I just dont understand how someone can legally file their taxes but illegally sell the items.

    The exact line is “a location in a farmer’s market or at a public festival or event where raw agricultural products are sold”.

    It does have to be at a public event — not just a venue — that is ag-related. A farmers market or county fair should fall under this definition. A flea market would work if produce is being sold there.

    All sales must be done in a public area. It would probably be okay to take pre-orders, but the transaction must take place at the event. If someone is doing sales under-the-table outside events, then presumably they wouldn’t be paying taxes on those sales. They are illegal sales and assuming the person knows that, they probably wouldn’t want to make the government aware by filing taxes for them.

Hello David,
Does this maryland law require packaged mixes not be used? I have heard that in some states that no store bought mixes could be used? Like box cake mix, pie shells, puff pastry etc… Is this the case in Maryland?

    Hi Chinwe, where did you hear that? I have not heard that such mixes are disallowed in any state. I couldn’t imagine the companies disallowing it — they’re in business to sell boxes!

How are items that are edible but not eaten seen? Example being flowers made of fondant only to be used as a food safe cake topper or cake decorations or sugar art

I am starting a coffee roasting business. I plan to roast the beans at home, bag them, and sell them to individuals and through the farmers markets and at events. Have you heard whether or not coffee beans fall under the MD cottage food laws? Thanks for your help. Freeman

Hi! I am currently selling artisan ice pops at our local county farmers’ markets as a Maryland Cottage Business. I would like to offer free samples next season. I cannot find anywhere if I need a permit for this! Can you help?

    Tracy, are you making the ice pops yourself, and are you making them from home? Generally speaking, if you are licensed to legally sell at a farmers market (which would mean the ice pops are being made in a commercial kitchen) then you should also be able to offer a sample, though in the cottage food industry those samples usually need to be prepackaged at home. Ice pops don’t fall under the cottage food industry and I don’t know too much beyond this specific industry, so that’s probably all the advice I can reliably give.

Hello David,
Can I bake cupcakes and cakes from my home and delivery them to customers? I’m thinking about a mobile business. I wouldnt want people coming to my house and find that it would be better to just take the product to them. Can you give me some advice?

    Sales from home are not allowed, and therefore delivery would also not be allowed. Sales may only be made at farmers markets and ag-related public events.

Hi, David,
I am wondering where do dog treats fall into the guidelines?
What is and isn’t needed?
And any further guidance for this?
Thanks, in advance, for your help.

    In most states, only products intended for human consumption are allowed. I haven’t heard about Maryland specifically, but I also haven’t heard of a state that allows pet food in their cottage food law. For the final word on this, you will need to call the state health department, but it’s very likely that your dog treats won’t be allowed.

    Oftentimes goods with alcohol have special restrictions. Michigan is the only state I can think of that specifically lists “baked goods with alcohol” as a cottage food, and in that case, there are special licensing requirements. It is possible, but not probable, that Maryland would allow it. You should call up your health department and see if they know. The alcohol restriction is not applicable when the amount is quite small — for instance, when using vanilla extract in cookies.

Hi David,

I’m interested in starting up a home based business selling jams, jellies, pickled fruits or veg, chutneys, conserves and relishes. I’ve read that Maryland cottage law allows provision for home made jams and jellies. How about the rest that I mentioned? All are preserved with an acid base. I have no problem getting a license. I couldn’t find any information on the Charles County health dept. website for more information. Also, can any of the above referenced products be sold out of state at food events, farmer’s markets, etc.

Looking forward to your input. Thanks!

    The other pickled items are considered separate from jams and jellies, even though they can be non-potentially hazardous. So no, you wouldn’t be able to make them under this law. You also would not be able to sell out-of-state with this law. Info from the government is hard to find online, so you probably have to call them.

    Hi David – thanks for responding to my inquiry. When you say call the government do you mean local county government or federal? Do you by any chance have a phone #?

Hi David– Thanks for responding to all the comments thus far. I have another question for you. Would pickles or sauerkraut apply to the MD Cottage Food Law? They have a high pH, and many other states allow them– would they be considered “non-hazardous” in Maryland? Maybe they could fall under the “jams and jellies” umbrella? I need your expertise! Thanks!!!

    It is possible that these would be allowed. It’s true that some states do allow pickles, and fewer allow sauerkraut — and these items are usually considered non-potentially hazardous if produced correctly. Many states don’t allow them because if you don’t produce them in the right way, they can be dangerous. I’m sorry that I can’t give you an official answer on this one… it’s really up to your health department to decide if it’s okay. They are borderline products that are not generally considered as safe as jams and jellies.

    Ashley, it probably would be allowed, but I haven’t confirmed that. The law says “nonhazardous food, as specified in regulations adopted by the department” are allowed. The health department has listed a number of items they allow (which is the list above), but they haven’t said anything online about granola. You should call them (try Lisa Staley at 410-767-8407) and I think they would approve it, since granola is a non-potentially hazardous food.

Hi,
I’m thinking about selling at a local Farmer’s Market in the near future. I know that the Cottage Law does not require state tax, but what about Federal tax? Would that just be something I take care of on my end when I do my taxes? Also, if I would pay Federal back during tax season, would it be best to register my business so that I can write off my baking expenses?

-Thanks,

Heather

    You do not need to collect sales tax, but you still need to pay all the other taxes for your business (you could probably write off expenses, but I’ve never done it myself). You may need to collect local sales taxes if your city or county requires it.

    Actually, the law specifically says that cottage food vendors are not exempt from federal and state tax laws, including sales taxes. The Comptroller of Maryland’s website states the following:

    Information About Sales of Food

    In general, sales of food are subject to sales and use tax unless a person operating a substantial grocery or market business sells the food for consumption off the premises and is not a taxable prepared food. A grocery or market business is considered substantial if sales of grocery or market food items total at least 10 percent of all sales of food.

    Among other things, the food items that might normally be consumed on the premises of a restaurant, but which are packaged to carry out, are not considered grocery or market food for the purpose of calculating the 10 percent threshold. The taxability of sales of ice cream, frozen yogurt, and other frozen desserts depends upon the size of each container sold. Thus, while the tax will apply to the sale of a single ice cream sandwich, it will not apply to a package of a dozen ice cream sandwiches containing more than one pint of ice cream.

    The following foods are taxable even if they are sold at a substantial grocery or market business:

    Food from salad, soup or dessert bars
    Party platters
    Heated food
    Sandwiches suitable for immediate consumption
    Ice cream, frozen yogurt and other frozen desserts sold in containers of less than one pint

    I put a call into the Comptroller’s office to confirm that the sale of baked goods at public events and farmer’s markets would still require the collection and submission of the Maryland Sales Tax (6%).

    Edison, thanks for looking into this, but I am surprised by the decision coming from the Comptroller of Maryland (assuming you did get ahold of someone at the department?). That tax law is similar to almost all other states, and generally, cottage food operations are not considered food establishments. The food that a CFO is selling should be wholly intended for consumption off the premises that they are making it, which makes it tax exempt. It is very common for govt departments to be unfamiliar with the cottage food laws, and I wonder if the person at the department was unsure.

    Sorry it took so long to get back to the forum. I actually was just working with someone trying to sell coffee beans. In Maryland, the regulations the comptroller follows dictate that the tax exemptions for sales of food for consumption off-site only apply to substantial grocery businesses (e.g. Giant, Safeway, etc.). As the comptroller’s site also includes (they linked to it at the top where they incorrectly wrote that sales taxes don’t have to be collected) that even vending machine food is taxed in this state. All that withstanding, I question the enforceability of such provisions for taxation and revenue limits so long as you are not selling cottage food as a commercial entity (if you are acting as a sole proprietor rather than acting under an LLC/Inc, etc.), for which you would have to file taxes and claim income.

    Like you said, even regulators are unsure of laws that are passed. It will be a few years before everything will be ironed out. I’m currently in talks with regulators about water activity determinations and expanding the list of approved foods. We’ll see what comes of it over the next few months.

Hi there. I have been wanting to sell my fresh homemade juices (similar to the fruit/veggie juices sold at Starbucks and in stores, but super-fresh and customizable. I have a juicer at home and have made them for hubby’s co-workers for a small profit just to see if they are worthy of pursuing. Is this something I can now do from my home kitchen legally?? It’s so confusing. Thanks!

David,

I would like to sell traditional eastern european cookies at a eastern european festival, along with some not edible crafts. I do not want to follow with a business, it is probably once a year thing for me. Am I right assuming (from the answers you gave above) that I don’t need permit, do not need to collect sales tax, just it would be good to list ingredients and label? Do I need to put ingredients list on each cookie, or would it be enough to have a list of ingredients at my stand. Thanks.

    As long as your cookies don’t need refrigeration and the festival doesn’t require anything else (like a business license or seller’s permit), you should be fine selling these without a license. You need to put a label on each package, so if you individually wrap your cookies, then they each need a label. You should not have them sitting out in the open on a plate — they do need to be packaged at home. I am not sure, but you also might be required to get a sellers permit for the crafts.

I would like to sell fudge but I don’t see it specifically listed as an allowable category. Does it fall into another category or is it not allowed.

    Pam, this is a gray area in the law. I’d also like to know the answer to this. The list above includes the things I know are allowed, based on a guide from the health dept. However, the law says that all nonhazardous foods are allowed, and fudge can easily fall into that category. However, you need to ask: try calling Lisa Staley from the health department at 410-767-8407.

    Dave,
    Thanks for responding with this contact information. I’ll try to remember to report back to you what I find out.

Hi David,
I want to set up a commercial kitchen in my home’s basement, which has an existing kitchen from before I purchased it. How do I get this kitchen licensed by the state of MD? Would a food business (chocolate bars) operating here be considered a cottage food business and not required to collect sales tax?

Also, besides food handling, what other certifications would I need? I’d like to sell at farmers markets and also be able to have retail stores carry the chocolate. Thanks very much.

    You should know that getting a commercial kitchen setup is a complicated and expensive process. It will cost at least thousands, if not tens of thousands of dollars. However, some people have successfully done this. I have to be honest and say that I don’t know much more about the process. You need to contact your health department for more details, and they should be able to tell you what your kitchen needs to have to be commercial.

    A chocolate business may be a cottage food business, but not if you want to sell to retail stores. To do what you want to do, you need to run a standard food business and use a commercial kitchen. You may need a number of certifications — that’s also a health department question.

    So if we limit our sales to farmers markets, do we need to register with the state of MD as a cottage food business, or are we just allowed to operate now that the law exists? If the latter, what do we tell the markets or the health dept when they check on us at a farmers market? We want to make sure we are legal and compliant. What else do we need to do to get properly set up? Thanks again.

    Karen, please see my response to Pam in regards to the sale of chocolate. You don’t need to register… this page lists the main things that are required to get setup. I suggest that all who decide to start as a CFO read the law before getting started, just so you are aware of any details in there. You also should call your planning division to see if you need to get anything else, like a business license.

I am new to the baking world – and want to go about about things legally and correctly. I would like to bake and sale mini desserts, cupcakes, cake pops and etc. for pick up and at private events. I am totally new to this and need to know which way I need to go and what I need to do. I want to do this out of my home.

    Maryland’s cottage food law is only for sales at public events. You would not be able to legally sell your homemade goods at a private event. If you want to be legal, then you need to make your items in a commercial kitchen and get a standard food license. It may be theoretically possible to add a commercial kitchen onto your home, but that is prohibitively expensive.

    No, but you still might consider getting it since it can be done online in a few hours for only $15 or so. You’d learn industry best-practices, and it’s something you could tell your customers to help reassure them if needed.

    Great, thank you! Can you point me to where online you can find a course/test for $15ish? I was about to plop down $200 and spend 16 hrs on a Safe Food Handling Managers Cert. I tried looking at the Baltimore City Health Dept page for guidance, but it’s a nightmare to navigate!

    Those manager courses do include a lot more information, but I was just talking about a basic food handlers card for safety training, which all food employees are required to take. There are a lot of options online, and it looks like they run around $10.

Hi David,
The non-food business I work for has just relocated to the Kentands, in Gaithersburg, MD. We are planning to participate in this year’s Kentlands Oktoberfest on October 13. We provide cosmetic treatments and would not be able to hand out free services to visitors, but still would like to have something to give away. We would like to hand out coupons for services, along with free goodie bags, containing edible treats. We had a few options in mind. The first is homemade chocolate dipped Utz Pretzels Rods dipped in Make ‘n Mold Candy Wafers, and Fox Run Halloween Sprinkles, individually wrapped, by us, in cellophane pretzels bags. The second is homemade S’mores kits, which would include cellophane bags filled with prepackaged miniature Hershey Bars, unwrapped Nabisco Graham Crackers, and unwrapped Just Born Halloween Peeps. The third option is, a cellophane bag filled with various Halloween type candies, wrapped by their manufacturers.

Are we legally allowed to hand any of these goodie bags out to visitors at this event? Do we need to obtain any licensing or certification in order to do so? I spoke to the City of Gaithersburg Program Coordinator and she directed me to this page. Any advice will be most appreciated. Thank you.

    Susan, the cottage food laws are for individuals preparing items in their home kitchen. The only item it looks like you’re preparing are the chocolate-dipped pretzels, which would not be included in Maryland’s cottage food law anyway. Everything else you’re doing sounds like reselling (that is, if you were actually selling it). If you are taking prepackaged items, reorganizing them, and then giving them away, you would not need a license for that. If you are opening a package and then handling it, then you are technically preparing it, and things get a bit more complicated. I honestly am not an expert of all the intricacies in the food industry outside of cottage foods, but you might be required to get a vendors license, or even required to prepare the items in a commercial kitchen. It’s amazing that your city’s rep pointed you back here… usually I’m the one pointing people to them! In your case, I think you should call your health department — they would probably know more about your specific case, which is a more unique one, given that you’re just giving these items away. Because of that, you might just be able to do it free and clear.

    In any case, it doesn’t sound like you’re doing anything too crazy… even if a health inspector did show up at your booth, I doubt they’d ask you to stop. And even if they did, you would almost certainly not be fined. I understand your desire to do things legally, but given that this is a one-time thing (right?), if I were you, I’d honestly just move forward without getting caught up in all the complicated procedures intended for food businesses.

How strict are the selling rules? If someone asked me to make them a birthday cake, am I allowed to sell it without having to be at a farmers market to do so? and am i allowed to take online orders?

    Well, I guess all I can say is that rules are rules… you’re either following them or you’re not. If you choose not to follow them, then you would be one of the many illegal home bakers out there. Many illegal bakers do take online orders without getting found out by the health department. The truth is that the consequences for doing so are probably quite small… the department would likely only tell you to stop. Illegal bakers do irk many small businesses that follow the rules and try to do the “right thing”. So no, you are not allowed to sell anything homemade at a non-public market/event, but nobody will probably stop you if you do.

    If I am going to bake my items in a licensed commercial kitchen, are the rules with selling these items still the same?

    Thank you for your prompt response. I am new at this and trying to make sure I do it in the most legal way possible. Where should I look to research rules about selling baked goods that are made in a commercial kitchen? I am looking into renting one to do all of my baking in.

    I’m not really sure about online resources, but you’re just trying to become a regular food business. If you call your health department, they should be able to guide you.

Hi David, do you have any information regarding charging or not charging sales tax on cottage food items in Maryland? Thanks

    Kathryn, you should not be required to collect sales tax, unless the item you are selling is supposed to be consumed on the premises of the sale (this is rare — at a public market, you would probably need a table at your stand for it to apply). Heated food is subject to sales tax, but as a cottage food operation, you’re not supposed to heat or cool food anyway. Here is some more information.

Hi
can anyone advise me on liability protection under the cottage law, specifically in Maryland. If I set up a sole proprietorship, what should I do to protect myself against liability? Thanks

    Pierre, as I think you know, you can seek some protection for your personal assets with an LLC instead of a sole proprietorship. If you’re going with a sole proprietorship, you can get liability insurance for your home business. Your insurance company should be able to offer you some kind of protection if you ask them about it, probably $1,000,000 of coverage for around $200 – $400 per year. Also, some cottage food businesses have used the FLIP Program.

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