Let’s Talk Baking Laws: What Home Bakers Actually Need to Be Legal

Have you ever found yourself pulling your hair out trying to figure out what’s actually legally required to run your business as a home baker?

Yeah. Me too. And honestly… all of us.

Trying to untangle baking laws can feel confusing, overwhelming, and wildly inconsistent — sometimes even the government offices you call don’t seem totally sure. So let’s break it down in plain English and walk through what you really need to know.

First Things First: Cottage Food Laws

Cottage food laws are the foundation of home baking legality. These laws and regulations are all about consumer safety- educating you as a food facility to keep your customers safe.

Cottage food laws determine:

• What you’re allowed to sell from home

• Where you’re allowed to sell it

And here’s the tricky part: every state decides its own cottage food laws.

That means:

• Rules vary widely from state to state

• Information can be hard to find

• Laws change as legislation updates or leadership shifts

The very first legal question every baker needs to ask is:

Do I need a cottage food license to sell baked goods from home in my state?

Cottage food laws regulate both what you can sell and where you can sell it, and those rules can change — sometimes for the better.

If your state currently has restrictive laws, don’t lose hope. They can improve.

I talked about this on my Business Is Sweet podcast with Katie from New Mexico, who played a major role in updating her state’s cottage food laws. She went from not being allowed to sell from home at all to fully operating her business — all through community involvement and advocacy. It’s more possible than you think.

Some states:

• Require inspections

• Limit certain products

• Have fewer restrictions overall

Your job is to research your state’s cottage food law and understand how to comply so you can confidently check that box.

Business Registration: A Totally Separate Thing

This is where a lot of bakers get confused.

Business registration is NOT the same as a cottage food license.
They are:

• Separate requirements

• Run by different government departments

• Often both required

While Cottage food regulation is all about consumer safety, Business Registration is all about ownership definition, liability, taxes, and managing community impact.

Business registration happens at two levels: State and city.

State business registration

This part is usually straightforward:

• Done online

• You select which type of business entity you are (sole proprietorship, LLC, etc)

• File the application and pay the fee and you're good to go

City business registration

This is where things can get more complicated.

Cities care about:

• Zoning restrictions

• Tax compliance

• Making sure you’re not running a disruptive business from your home

Cities are allowed to be more restrictive than the state, which is frustrating — but important to check. Always ask:

• Does my city allow home-based baking businesses?

• Are there requirements beyond cottage food law?

Sales Tax: Yes, You Need to Handle This

If you’re selling something, you need to collect and pay sales tax.

A few key things to know:

• Sales tax is charged to the customer, not taken from your profit

• It’s added after you’ve priced your product properly

• Rates vary by location

You’ll get your sales tax license through your state, again through a different department than the others.

Sometimes registering for one thing, like registering your business with the state, signals the Sales Tax department to send you information… sometimes it doesn’t. Unfortunately, you often have to be the one connecting the dots.

Don’t Forget the Food Handler’s Permit

Most bakers will also need a food handler’s permit. Even if your state licensing doesn't require it, I highly recommend it! 

Most cases of food poisoning actually happen at home. And there's a lot of important habits and practices for safely handling food that you may not know about.

Food handler permits are typically:

• Issued through a certification course (if you're getting your permit to fulfill a state requirement, be sure that the course you take is accepted in your state)

• Available online (the easiest option)

• Quick to complete

It’s another box to check — but not a hard one.

The Simple Checklist for Home Bakers

If this all feels overwhelming, take a breath. Here’s the order I recommend:

1. Research your state’s cottage food laws

   • Do you need a license?

   • What and where can you sell?

2. Register your business

   • With your state

   • With your city (and check for extra requirements)

3. Get your sales tax license (state)

4. Complete a food handler’s permit

One step at a time.

If You’re Feeling Overwhelmed, You’re Not Alone

I know exactly how this feels. I’ve stared at this information and wanted to shut down my website and walk away — and honestly, at one point, I did.

But once I started breaking it down step by step, I realized it wasn’t nearly as scary as it looked on paper.

I’ve done this:

• For my own businesses

• More than once

• And helped many other bakers get through it too

You can do this.

Don’t be afraid. Start with the research, take it one task at a time, and trust that clarity comes with action.

You’ve got this. 💛