Texas Cottage Food: $150,000 Cap, No Permit, No Local Rules

The definition in Section 437.001(2-b) covers an individual operating out of the individual's home, and also a nonprofit organization producing at the home of one of its directors or officers, where Section 437.001(5-a) limits nonprofits to entities described by Section 501(c)(3) of the Internal Revenue Code. Section 437.001(5) defines the home as a primary residence containing a kitchen and appliances designed for common residential usage, so a rented commissary or a detached outbuilding kitchen falls outside the exemption. What you may not make is a closed list of six items: meat, meat products, poultry and poultry products; seafood, fish and shellfish and their products; ice and ice products, which the statute spells out as including shaved ice, ice cream, frozen custard, popsicles and gelato; low-acid canned goods; products containing cannabidiol or tetrahydrocannabinol; and raw milk and raw milk products. Everything else is fair game, which is why Texas cottage food reaches further than the shelf-stable exemptions used in most states.

The money limit is $150,000 or less in annual gross income from the sale of qualifying food, and Section 437.001(2-b)(B) directs the Department of State Health Services to adjust that figure annually for inflation using the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics. The definition was last amended by Acts 2025, 89th Leg., R.S., Ch. 303 (S.B. 541), effective September 1, 2025, which is also the act that added the cottage food vendor and refrigerated food provisions described below.

Section 437.001(2-b)(C) and (D) fix the sales channel: the operation sells directly to consumers or to a cottage food vendor, and delivers at the point of sale or another location the buyer designates. Online selling is allowed but tightly conditioned. Under Section 437.0194(b) an operation may sell over the Internet only if the operator, an employee, or a household member personally delivers the food to the consumer, and only if the required labeling information is posted as a legible statement on the operation's website before payment is accepted. Section 437.0194(a) otherwise bans wholesale outright, with one exception added in 2025: Section 437.0194(a-1) permits wholesale to a cottage food vendor for anything that is not on the excluded list and is not a time and temperature control for safety food, and Section 437.01965 then lets that vendor resell to consumers at a farmers' market, a farm stand, a food service establishment, or any retail store.

Labeling is where the statute is most prescriptive. Section 437.0193(a) requires packaging that prevents contamination unless the item is too large or bulky for conventional packaging, and Section 437.0193(b) requires every label sold to consumers to carry the name and address of the operation plus this exact disclosure: THIS PRODUCT WAS PRODUCED IN A PRIVATE RESIDENCE THAT IS NOT SUBJECT TO GOVERNMENTAL LICENSING OR INSPECTION. Producers who would rather not print a home address on every jar can register with the department and print a unique identification number instead under Section 437.0193(b-1). For items too bulky to package, Section 437.0193(c) allows the same information on an invoice or receipt. A refrigerated item carries two extras under Section 437.0193(e): the date the food was made, and a safe handling instruction in at least 12-point font telling the buyer to keep the food refrigerated or frozen until it is prepared for consumption.

Training is a real requirement, not a formality. Section 437.0195(a) requires the individual operating a cottage food production operation to have completed a basic food safety education or training program for food handlers accredited under Subchapter D, Chapter 438. Section 437.0195(b) then bars anyone else from processing, preparing, packaging or handling the products unless that person has the same training, is directly supervised by someone who does, or is a member of the household where the products are made.

Two product categories carry their own rules. Under Section 437.01951, an operation selling pickled fruit or vegetables, fermented vegetable products, or plant-based acidified canned goods must use a recipe from a department-approved source, a recipe lab-tested to an equilibrium pH of 4.6 or less, or a recipe approved by a qualified process authority, or else test every batch with a calibrated pH meter. Each batch gets a unique number and a record kept for at least 12 months showing the batch number, the recipe, the recipe source or test results, and the date it was prepared. Section 437.01951(g) exempts pickled cucumbers from the whole section. Separately, Section 437.01953, added by S.B. 541 and effective September 1, 2025, lets an operation sell time and temperature control for safety food if it registers with the department, stores and delivers the food at the air temperature needed to prevent bacterial growth, and labels it under Section 437.0193.

The preemption is the part cities test most often. Section 437.0192(a) bars a local government authority, including a local health department, from regulating production at a cottage food production operation and from requiring any license, permit or fee to produce or sell to consumers or a cottage food vendor, or to hand out samples. Section 437.0192(c) goes a step further than most preemption clauses by prohibiting a local government authority from employing, or continuing to employ, a person who knowingly requires or attempts to require a cottage food production operation to get a license or permit in violation of that ban. The preemption is not total: Section 437.0192(b) requires both the local health department and the state department to keep a record of any complaint made against an operation, and Section 437.0191(b) preserves the department's and a local health authority's power under Sections 431.045, 431.0495 and 431.247 to act against an immediate and serious threat to human life or health. Section 437.01955 also lets an operation give out samples anywhere in the state under the farmers' market sampling standards of Section 437.020(c) and donate non-refrigerated food to events such as a church bake sale on the same footing as any individual.

The exemption is self-executing, so the real consequence of breaking a rule is losing it. 0192(a) shield against local permitting. 0194(b). 01951(b). 018 against a person who holds a permit or who is regulated under Chapter 437, up to $10,000 per violation, with each day a violation continues counted as a separate violation. 0192(c) makes the employee who knowingly makes that demand a firing matter for the local authority.