Minnesota passed a new law in 2015 (SF 5) which greatly improves their former cottage food law, which used to be one of the most restrictive in the nation. Cottage food operations can now sell most types of non-potentially hazardous foods from home and at some local markets, and they can sell up to $18,000 of products per year. Before starting their business, an operation needs to register with the ag department and take a food safety training course.
In 2013, a couple Minnesota bakers aligned with the Institute of Justice to bring a lawsuit to the State Department of Agriculture, which hoped to prove that the ag department doesn’t have the right to limit homemade food sales. It was the first time a lawsuit had been created to improve a cottage food law. Despite their compelling video to gain support, the case was dismissed by a state court. Although the case was eventually reinstated, it doesn’t appear that the Institute of Justice intends to press the case further, now that the cottage food law is in place.
“Events” only refers to community events: you cannot sell your products at other types of events.
You can sell online, but you cannot ship products to customers. All deliveries must be delivered by you personally (for instance, a family member could not deliver a product for you).
All canned goods must have a pH of 4.6 or below, and all products need to be classified as non-potentially hazardous. If you are not sure if one of your products is potentially hazardous, you should contact the ag department for more information.
You cannot set up your cottage food operation as an LLC. In addition, you cannot start a cottage food operation if you run another type of business out of your home.
All cottage food operations need to take a food handlers training course before registering, which is very easy, as it only consists of reading the information in the document. It’s possible that the ag department will eventually develop a more robust training course for operations who sell over $5,000 of products per year. Training must be renewed every three years.
The University of Minnesota Extension has also created a series of Farmers Market Academies around the state, which fulfills the training requirement and also provides additional info and good networking opportunities. The academy costs $35.
All cottage food operations must register with the ag department, regardless of how much they sell per year. However, operations with $5,000 or less of annual sales can register for free, while operations with more than $5,000 of annual sales need to pay a $50 registration fee. Registrations need to be renewed every year and always expire on December 31st.
Sales amounts are calculated based on the prior year’s sales — therefore, your first registration is free and you only need to pay for renewals if you sold more than $5,000 of products in the past year.
Before registering, you need to prove that your local ordinances will allow your business. Cities or counties can prevent cottage food operations from starting in their area. Contact the department that enforces zoning regulations in your area to get approval for your cottage food operation.
You may need to get a business license before starting your business. Contact the department in your city or county that issues business licenses to find out if you need one.
Only individuals — not businesses — can use the cottage food law, so you cannot establish an LLC. In addition, if you run any other form of business out of your home, you are not eligible to start a cottage food operation.
You may be required to collect sales tax on the products you sell. You should call the Minnesota Department of Revenue at 651-556-3000 to learn more.
Chocolate Chip Cookies
Forrager Cookie Company
123 Chewy Way, Cookietown, MN 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
Produced on 12/14/2018
You must also place a placard at the point of sale with this statement: “”These products are homemade and not subject to state inspection.” If you sell your products online, you must include this statement on the website. For those producing canned goods, the statement must start with “These canned goods…” instead of “These products…”