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cottage food community

South Carolina

South Carolina’s cottage food laws are very basic and are intended to get someone started before opening a full-scale commercial operation. They only allow operators to make baked goods and candy, which is more restrictive than most other states. However, the main limitation is that they only allow $15,000 of sales per year. Sales must be made directly to the consumer, so while selling to retail stores or restaurants is prohibited, most other venues are permitted.

Although there is no license for cottage food operations, all home-based food businesses in South Carolina must get a business license for tax purposes. Only operators that sell their food at external locations like farmers markets must apply for an exemption from getting their home inspected, so all in all, the process to get setup with these laws is quite minimal.

Selling

Custom made items, like wedding cakes, may only be sold from home (delivery of the item is also allowed).

Allowed Foods

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 $15,000 per year

Business

State business license

While there is no license specific to the cottage food laws, each operation must be licensed as a business by the state for tax purposes, which costs $50. The code for this license is 445291. Operators must file taxes every month (even if they make no sales).

Operators that sell from anywhere other than from their home (farmers markets, road stands, etc.) must apply for an exemption from inspection and labeling.

Labeling

Sample Label

Chocolate Chip Cookies

"Not for Resale – Processed and prepared by a home‐based food production operation that is not subject to South Carolina’s Food Safety Regulations."


Forrager Cookie Company

123 Chewy Way, Cookietown, SC 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)


Workplace

Ingredients for the business must be kept separate from those for personal use.

Resources

Contacts

Alicia Attaway

Organization
Food Safety & Compliance, SC Department of Agriculture
Email
ahendrix@scda.sc.gov
Telephone
803-737-9700
Address
123 Ballard Court
West Columbia, SC 29172
Law Dates
June 2012
SC Code 44-1-143
This page was last updated on

Comments

I use the cottage food law and I was told by the lady in charge of the exemption That I could sell my baked goods in my store as long as I sell it and keep the money separate. we run a small grocery store and the days I! Working I bring in a few breads and stuff to sell.

I have several questions please. If I bake goods in my home under the “cottage food law”, have the proper packaging and labeling…
1. Can I sell it in a NON-FOOD store such as in a booth at a Local Artisan & Crafts Marketplace?
2. Can the consumer purchase it and eat it there in a “seating area”.
3. Can we sell coffee without a DHEC approved kitchen onsite if we use bottled water in the machine?
4. Can we sell other bottled/canned beverages under the marketplace owner’s retail license?

    The first two are gray area questions that only your ag dept can give accurate answers to.
    1. As far as I know, you cannot sell at permanent retail facilities. However, if you are setting up a booth to sell directly to the consumer, your ag dept might allow it.
    2. There is a gray line that separates a food establishment from a non-food establishment. If there is a seating area and customers expect to eat the items they purchase on-site, then you probably can’t sell there. But at an event, a customer can eat your product while standing at your booth if they choose to.
    3. No. You need to get approval from some dept before selling any consumable item (expect for uncut produce in some cases).
    4. I believe you would need to get your own seller’s permit, assuming that you are reselling commercially-produced beverages. I’m not that familiar with the details on reselling, which falls outside the scope of the cottage food law.

    Raw nuts are not a potentially hazardous food, but SC doesn’t allow them because they only allow non-PHF baked goods and candy. Cooked or boiled nuts are usually considered potentially hazardous.

Is it illegal to sell home canned goods to friends and co-workers? I have had people ask if they could buy my jam. I haven’t sold any yet, I was just checking the law.

    You should have your well water tested since the law requires a safe water supply. It’s a fairly easy process. Go to your local health department and ask for a well testing kit. It comes with a container and instructions on how to collect the sample. Return it to them within the specified time, and in a few weeks, a letter will come with the results and a bill for $20 (unless the fee has gone up).

I was curious about the address part on the label. I currently have a PO Box will that work? Also can you put your products in service shops, such as Automotive, Beauty Shops, and any type of service area if you put out a collection jar instead of them collecting the money. Or is it possible for them to collect for you as the are service areas not retail?

    The address needs to tell someone (the health dept in the event of a complaint) where the product was made, so a PO box won’t work.

    Indirect sales are not allowed. You must be handing over the item and collecting money personally.

    They can only inspect your kitchen if someone complains about your product. In that case, they could check anything, from the temp of your refrigerator, to the cleanliness of your kitchen, to the ingredients you’re using.

I get the part about we can sell baked goods and not refrigeration such as cheesecake but what about eggs and the other things you use to actually bake the cakes. the icing also has to be refrigeration………

    A few eggs and a little milk is fine as long as they are thoroughly baked. You can’t use frostings that require refrigeration… many frostings don’t.

I live in SC and have just heard of the Cottage Law. I have just been told by Clemson Agricultural that custom order cakes such as bday, wedding, and shower cakes do not fall under the cottage law. Is this true?

    I just learned that this is not true, actually. The ag dept’s FAQ page isn’t very clear about it, but custom ordered items cannot be sold at farmers markets, events, and roadside stands. However, they CAN be sold from your home, or delivered to a customer.

So making peanut butter is illegal, but making peanut butter chocolate candies are okay? Sorry, I’m a little confused. Thanks!

    Peanut butter chocolate candies would probably be okay, but I doubt you’d be able to use homemade peanut butter in the candy.

what is the business code to sell the baked goods from home and at festivals? I am trying to apply for my business license and I am not sure what code I am supposed to use whether it is 722330 or 445291.
Thank you.

What about a mix that turns milk or yogurt into a healthy dessert? Which category applies? Is it acceptable if the product is not baked and only mixed? Thank you for your feedback.

I just purchased a cake pop with the exact labeling described in the SC Cottage Food Law example. “Not for resale. Processed and prepared by a home based food production operation that is not subject to SC food safety regulations.” I purchased the cake pop at a retail ice cream shop for $2. I checked out the facebook page and web site of the home baker listed on the label and these sites actually direct people to that same retail store to buy the cake pops and cupcakes. The cake pops are displayed at the checkout counter with a sign that reads “Cake pops $1.99″ The same person who rang up our ice cream also rang up the sale of the cake pop and the money was placed in the same cash register. Is there some sort of exemption or loophole that allows the sale of home baked goods in a retail store?

    I think that some rules are being misinterpreted here or maybe I am not following the conversation correctly. After many conversations with DHEC and Department of Agriculture, my interpretation is that food prepared at home under the cottage food law can be sold in a retail environment but not a retail business that already has a DHEC approved kitchen. For example, say I own a bakery that is fully approved by DHEC, licensed, the whole 9 yards legal. I cannot bake cakes at home under the cottage food law and bring to my bakery. I can however, rent a booth from a non-food retail establishment and sell my cottage food items with the proper cottage food labeling. I can also rent a store front and sell my cottage food (properly labeled) as a retail business.

    JH, thanks for the clarification. I’ve seen states go both ways: some prohibit all sales at retail stores, and others allow direct sales at non-food establishments. There isn’t anything in SC’s law that would prevent a CFO from selling directly at a non-food shop.

    However, in Kacey’s instance, the sale was happening both indirectly and at a food facility, so it was illegal on two accounts. There is no loophole for her case, but her actual question was quite generic, so thanks for addressing that.

So as long as I pay the 50 bucks I can sell only the listed items out of my house without an inspection? What to do if I want to sell soul food plates from home or go out in community to sell?

So in order to sell cakes out of my home I have to pay $50 to get a business license? Does DHEC have to come out and inspect my kitchen?

    You don’t need any kind of license, inspection, or approval from the DHEC. The $50 is just to register your business with the state.

Can you explain the restrictions on selling across state lines? Is that for internet sales? I have friends who live in NC, can I sell my product to them? Would they need to pick up the product at my home?

It says pets aren’t allowed in the kitchen while prepping. It’s OK to have pets in the home in South Carolina, correct? It says in NC, pets are not even allowed to be in the residence. Thanks!

While it’s great that you mention the need to get a business license, where does the referenced $50 come from? “Although there is no license for cottage food operations, all home-based food businesses in South Carolina must get a business license for tax purposes, which costs $50.” Each city and county with business licenses have their own rates, and the State of SC does not have a “State” business license. This is misleading and can cause much confusion.

    Pam, thanks for mentioning that. I honestly can’t remember where I came up with $50… my guess is that I found a business license online that had a $50 fee. Back then, I may have been unaware that business licenses are usually county/city specific, but I’ve learned a thing or two in the past year and now can easily see that that info is faulty. I also am no longer including business licenses in the cost calculations on the law pages because they vary. I have made the adjustments on this page and thank you again for letting me know.

    As a SC home baker operating under the cottage food law, and the admin. for the SC Cottage Food Law FB page, I can tell you that all home bakeries must have a retail business license from the SC Dept. of Revenue (State) which costs $50. I’m sure that’s where the $50 amount came into play. If you choose to be an LLC, there is an additional fee for that when you apply for your retail business license. The only reason we actually have to have this license is we are required to collect sales tax on all our sales.

    Thanks Sheryl. I’ve added this info back in here… now it makes sense as it is a state license that’s applicable to all. In other states, usually business licenses are managed by counties or cities. Would CFOs in SC typically have to get a local business license too?

    Hi David, Sorry for the late response to your question. Some counties do require local business licenses in addition to the state license, but not all. Also, some counties require people to get an exemption from their zoning board to allow the home business and that process may involve making sure the neighbors have no complaint of having a home business near them. We have heard of no one being denied a home bakery in their town. I need to correct some statements that I’ve read here. The cottage food law was designed specifically for the home baker to be able to sell custom ordered birthday and wedding cakes, and other baked goods from their home kitchen to the public without having to have a DHEC inspected kitchen. So cakes ARE allowed. We may advertise as well. Since the law is relatively new, only two years, many agencies and county governments are not familiar with it and give incorrect answers. The Dept. of Agriculture gives us an exemption if we wish to sell at a Farmer’s Market, Flea Market, or similar venue. Custom ordered cakes would not be sold at a Farmer’s Market…mainly foods like cookies, pound cakes, breads, etc. The ability to sell at a Farmer’s Market is at the discretion of the Market Manager. We may NOT sell in a storefront or any retail environment. We may NOT place our items on consignment in another store, and we may NOT sell our items to be resold somewhere else. For opening our business the code is 445291. The cottage food law does not prohibit selling to people who live across state lines if they have come to you and placed an order. There are a good many home bakers that live near the borders of NC and GA who have out of state customers. You can have a web page set up to receive payments for custom orders. You can make deliveries of custom ordered baked goods. I appreciate your link to our Facebook page and the other links for information. I spend a great deal of my personal time educating people on the SC Cottage Food Law and I do have credentials of sorts. I mentioned before I am one of the admins the SC Cottage Food Law Facebook page, but I also was one of two women who initiated the cottage food law movement in SC by getting my Senator to sponsor the bill. I attended the statehouse hearings and spoke before the committees and argued for the law until it was passed. I had detailed conversations with the head of DHEC and officials from the Dept. of Agriculture so I have a very good understanding of the cottage food law.

    This is so helpful — thanks so much.

    In rereading the ag dept’s FAQ page, I think I can see what you’re saying and it looks like I misinterpreted it. So just to be clear, they are saying that since custom made items do not fall under the jurisdiction of the ag dept, the only place you can sell those items is where they were made, or via an individual delivery? I must say, that section of their FAQ page could be worded better to be less confusing.

    Yes, David, that’s correct. The only place we can sell our custom ordered cakes is from our home. A delivery is not considered a place of sale because custom orders are confirmed and payment made prior to the actual delivery. (Or at least they should be). Most of the time, a delivery would only be required for wedding and other large cakes. I agree about the need for better wording on the FAQ’s. The statement that custom cake “do not fall under the jurisdiction of the Dept. of Ag” is correct, but people need to know that doesn’t mean they are not allowed. It just means that they don’t regulate home bakers, but they do regulate farmer’s markets and what gets sold there. Farmer’s markets have a policy that all seller’s of baked goods make their foods in a DHEC approved kitchen and they review labeling to make sure it is in compliance with federal regulations before a person can sell. So the Dept. of Ag. offered home bakers an exemption from that if they want to sell their product at the market. The market manager still has the final authority and may deny a home baker. Another thing to note, is that home bakers in SC do not actually fall under DHEC’s jurisdiction either. We are not considered a retail food establishment, and do not have to have our home kitchens inspected. But they do reserve the right to make an inspection if a complaint is made against the home baker. DHEC made sure guidelines to sanitation, food storage, food safety, etc. were put into the cottage food bill when it was in the statehouse. The law itself is our guideline of what is required of home bakers, and that is the only thing that DHEC puts on their web page…a small link at the bottom of their page that tells who needs to have a license from them. I really consider home bakers in SC to be self-regulated (complying with the law), simply because a person can set up their home bakery without any paperwork or contact with DHEC or the Dept. of AG. It is my hope that all home bakers are setting up according to the guidelines in the law, even though self-regulated. A home baker can’t “cut corners” anywhere, because if they do, they step out of the cottage food “umbrella”, and at that point, DHEC does have the authority to shut you down.

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