Income Caps and Why They Exist
Many states in the US have caps on the amount of income a home baker can make under a cottage food permit. The reason for this is to encourage home bakers to expand their business into a commercial kitchen or brick and mortar bakery once their income reaches a certain amount. There are many ways to get around this law, one of which is to ensure you also have a business license rather than only a cottage food license. A business license will allow you to sell items that are not food related and do not fall under your state’s cottage food laws. Examples of additional items you can sell are baking tools and supplies, recipes, courses, and more.
Below is a list of current states that cap the income a home baker can make. If you do not see your state listed they did not have a cap at the time of this document being published. However, as always, stay up to date on your state’s laws as they can change at any time and may not always be reflected in this document. Please let us know if you notice a change in your state that is not reflected here.
Alaska
$25,000 per year
California
$75,000 per year
Colorado
$10,000 per product
Connecticut
$50,000 per year (see link)
Delaware
$25,000 per year
District of Columbia
$25,000 per year
Florida
$250,000 per year
Iowa
$50,000 per year
Kentucky
$60,000 per year
Louisiana
$30,000 per year
Maryland
$50,000 per year
Michigan
$25,000 per year
Minnesota
$78,000 per year
Mississippi
$35,000 per year
Nevada
$35,000 per year
New Hampshire
$35,000 per year
New Jersey
$50,000 per year
Oklahoma
$75,000 per year
Oregon
$20,000 per year
South Dakota
$5,000 per year but does not include what is sold at farmer’s markets and festivals, etc.
Texas
$50,000 per year
Vermont
$6500 per year or $10,000 under the Home Food Processor exemption
Washington
$25,000 per year
Wyoming
$250,000 per year