Cottage Food Sales Caps Explained: Why States Set Limits and How Much They Vary

If you sell under a cottage food law, there is probably a number in your state's statute that you are not supposed to cross in a year. In Florida it is $250,000. In Michigan it was $25,000 until this past March. In Wisconsin, if what you sell is pickles or salsa, it is $5,000. That number is the sales cap: the point where the state expects you to become a licensed food business with an inspected kitchen.

What a sales cap is, in plain terms

Cottage food laws are exemptions. Ordinarily, anyone who makes food for sale needs a license and a kitchen an inspector can walk through. A cottage food law carves out a category of lower-risk foods (the list is in our guide to what counts as cottage food) that you may make at home and sell without that license, as long as you meet the conditions attached. The sales cap is one of those conditions.

It is the edge of the exemption. Harvard Law School's Food Law and Policy Clinic put it plainly in its 2018 fifty-state review: once an operation exceeds the cap, "typical food establishment requirements and permitting rules kick in." Minnesota's Department of Agriculture says the same thing in its FAQ: sell more than $78,000 and "you need a food license."

Gross means gross

Every cap we reviewed is written in gross sales, not profit. Florida's statute says "annual gross sales." California's says "verifiable gross annual sales." Texas uses "annual gross income." Minnesota's guidance spells out what that means: the figure is "gross annual receipts, not just profits, meaning the total amount for all sales as measured by the sales price."

So if a customer hands you $8 for a loaf that cost you $2.50 to make and bag, the cap counts $8. Market fees and the stand mixer you bought in March do not come off either. For the cap, think in terms of what went into the cash box, not what you took home.

Two details vary. The unit: Minnesota's $78,000 applies "for an individual" and Wisconsin's $5,000 canning limit is "per person," while Florida and California attach the number to the operation, and Michigan counts everything sold from one residence together rather than per person. The period: Minnesota measures "a calendar year"; most other states say "annual" and stop there. If you collect sales tax and pass it through, ask your agency whether it counts; none of the pages we read address it.

Why states set limits at all

Legislators rarely put the reason for a particular figure on the record (Connecticut's own legislative researchers could not find one for the state's original $25,000), but they have been candid about the purpose. The Harvard report summarizes it: "Sales limits are likely appealing to state policymakers because they limit the scale of operations that are allowed to sell without full food safety precautions in place." If a home kitchen ever does cause an outbreak, a cap "limits the potential harm from the outbreak by limiting the total sales." The report also notes that "many early cottage food laws were passed with the intention of only allowing home-based food businesses to be a side business or hobby," which is why so many original caps were small.

Connecticut's legislative record shows the trade-off in real time. When the state doubled its cap from $25,000 to $50,000 in 2022, the General Law Committee's ranking House member called it "an inflation adjustment," and the committee's Senate chair said it "will enable them to grow to $50,000 of revenue before they need to seek out a commercial facility." People at the public hearing had asked for no ceiling at all. The committee's ranking senator explained the refusal: "we didn't feel comfortable at this time to do that because these kitchens are not inspected." That is the whole argument in one debate: the cap sits wherever a state's comfort with uninspected kitchens runs out.

How much the caps vary

Here is where a sample of states stood when we read their official pages on September 2, 2026.

The lowest cap here attaches to one product category rather than to cottage food generally: Wisconsin's $5,000 covers only home-canned goods. The highest come from states that have rewritten their laws as economic policy; Florida's rose more than sixteenfold between 2017 and 2021. And the no-cap group is not a fringe: Harvard's 2018 review found "about half of the states" set a limit, and Connecticut's 2024 legislative research found New York and every New England state except Connecticut and Rhode Island without one (Vermont has no cap, though home bakeries there need a license at $6,500 in sales).

Caps that move on their own

Most caps are fixed numbers that stay put until a legislature votes, so they quietly shrink in real terms. Minnesota's original cap was $5,000; it took a 2013 lawsuit and a 2015 amendment to move it to $18,000.

Two states in our sample have built inflation into the statute. California adjusts both classes every January using the California Consumer Price Index and publishes the new figures in a one-page notice; the 2026 numbers sit about 18 percent above the 2022 base. Michigan's 2025 amendments allow adjustment at the rate of the Detroit CPI beginning December 1, 2026. In an indexed state, last year's number is probably wrong this year; check the agency's current notice.

What happens when you get close

Tiered states give you a smaller step before the big one.

• California splits cottage food into Class A (direct sales only, registered with a self-certification checklist) and Class B (direct and indirect sales, with a permit from the local enforcement agency). A Class A seller closing in on the limit can move to Class B and double the ceiling, at the cost of that permit.
• Minnesota has a line inside the cap. At $7,666 in annual sales you move from Tier 1 (free online training each year, no fee) to Tier 2 (a $50 fee and an approved food safety course every three years). Above $78,000 you need a food license.
• Michigan allows $75,000 instead of $50,000 if your products are priced at $250 or more per unit, a tier only high-ticket items like custom cakes will reach.
• Florida has no intermediate step, but it has teeth: an operation must "provide the department, upon request, with written documentation to verify the operation's annual gross sales."

When the cap itself is in sight, you have three honest options. Slow down, which usually means turning away orders in your best season. Raise prices, which spends the cap faster per sale but may leave more margin on the sales you keep (our pricing guide shows how to check). Or start licensing before you need it, because finding a kitchen and clearing plan review takes longer than most sellers expect. Our guide to moving from a cottage kitchen to a commercial kitchen walks through that decision.

How to track your number

You do not need software. You need one ledger, kept the same way every week, that can answer two questions at any moment: how much have I sold this year, gross, and how far is that from the next line that matters?

1. Pick the period your state uses. Minnesota says calendar year. If your agency's page just says "annual," ask which twelve months it means and write the answer at the top of the ledger.
2. Record gross, by day and venue. Date, venue or channel, and payment type. Reconcile against your card processor and cash box the same day.
3. Run the total monthly. Divide it by your cap and write down the percentage. At 50 percent, estimate where the season will land you. At 75 percent, decide: slow down, reprice, or start licensing.
4. Watch the tier lines, not just the cap. Minnesota's $7,665 line, Michigan's $250-per-unit condition, and California's Class A figure all change your obligations before you reach the top number.
5. Keep proof. Florida can ask for documentation, and California's statute says "verifiable." Processor statements and a dated sales log are the records an agency would expect to see. Our recordkeeping guide shows a layout that also works at tax time.

One last caveat. The direction of travel has been up: Florida, Connecticut, California, and Michigan all raised their caps between 2017 and 2026, and Texas and Minnesota now sit far above the $50,000 and $18,000 that Harvard recorded for them in 2018. Our analysis of how cottage food laws have expanded tells that story. But a rising cap in someone else's state does nothing for you until your own legislature votes. Until then, the number on your agency's page is the number, and the ledger is how you stay under it.