Truth be told, it is quite easy to start a food business today. A good number of food businesses online and at farmer’s markets are home-based and they make very good profits. However, before you decide to start selling food in any form, there are a few legal questions you need to ask, and also legal answers you have to comply with.
First and foremost, do you need a permit to sell food from that location? How much is a food service license? Maybe more precisely, “do I need a food permit to sell cotton candy?” Or do you need a permit to offer free food? You have to understand that the answer to questions like these will vary from state to state. However, the bottom line is that selling cooked or baked food to the public requires some form of planning and adherence to state guidelines.
In most places in the United States, you are not allowed to legally operate a business that serves food for pay without a permit or license from the state or local health department. In most places, you will need a health permit before you can even attempt to open your doors to customers. To acquire a valid health permit, your business will have to arrange for an inspector to come to inspect the premises. If for some reason the inspection doesn’t go well, you may not get a health permit.
Note that the penalty for selling food without a permit will be a fine more exorbitant than the cost of the initial permit. This fine can go up if you don’t have a business license, coupled with the implications of unpaid taxes. You may also run the risk of your business being closed by the state.
Howbeit, that doesn’t mean that all activities where food is sold require a health inspection. In recent times, some states have enacted laws to help the growth of home-based food businesses. Wyoming, North Dakota, Utah, Montana, and Oklahoma all currently have food freedom laws that allow food operations that don’t need permits.
List of Food Operations That are Permit Exempt
While inspection laws are meant to prevent businesses from serving food in unsafe or unsanitary conditions, there may be some situations where an inspection sticker isn’t necessary. In many states, the following food operations are exempt from the health inspection regulations and permits.
Table of Content
- Farm/Garden Sales or Produce Stands
- Bake Sales
- Potlucks and Private Events
- Churches/Religious/Donated Food Distribution Organizations
- Licensed pharmacies
- 6. Food sampling and demonstration, farmer’s market, or community events
- “Cottage” food operations
- Well Registered Retail Operations
- Motels, Bed, and Breakfasts
- Food Banks
Farm/Garden Sales or Produce Stands
In most places in the United States, foods grown on your land (or land that you are renting) that contain no added ingredients from that land can be sold without a license or permit. There are no permits required when selling on agriculture zoned parcels.
Popular States
- Oregon
- Washington
- California
- Minnesota
Bake Sales
A bake sale is defined as a “nonprofit organization operating for religious, charitable, or educational purposes and selling baked goods that do not need temperature control (non-potentially hazardous foods). However, not all states offer non-profits a blanket exemption from sales and use tax, and even states with broad exemptions may still require the transactions to further the non-profit’s charitable purposes to be tax-exempt.
Popular States
- Florida
- Michigan
- Arizona
- Washington
Potlucks and Private Events
A potluck is defined as an event where: (a) people come together to share food; (b) people attending are expected to bring food to share; (c) there is no form of payment made or provided to people for bringing food to the event; (d) there is no charge for any food or beverage at the event; and (e) the event is not conducted for financial or commercial purposes.
Popular States
- Arizona
- Minnesota
- Massachusetts
- Rhode Island
- New Hampshire(Just 4 days in 30 days period)
- Vermont (Just for one day in a calendar month)
- New York
Churches/Religious/Donated Food Distribution Organizations
In locations like this where food is made available to their congregation, you do not need a food permit. In most states, these organizations are considered private groups. Also, note that organizations that provide food to homeless individuals also do not need a food permit because there are considered a Donated Food Distributing Organization.
Popular States
- Washington
- Virginia
- Delaware
- Minnesota
Licensed pharmacies
In some states, a licensed pharmacy is allowed to sell food additives, food supplements, prepackaged and canned infant formulae, ice produced and packaged by another business, bottled and canned soft drinks, prepackaged candy, and nuts to retail customers without a permit.
Popular States
- Minnesota
- Pennsylvania
- South Carolina
- Michigan
6. Food sampling and demonstration, farmer’s market, or community events
In most places in the United States, you do not need a license to sample small amounts of food for promotional or educational purposes at a farmers’ market or community event.
Popular States
- Minnesota
- New York
- Alabama
- South Carolina
- Illinois
“Cottage” food operations
In the United States, there are some states and cities that will allow “cottage” businesses to sell a limited set of foods out of their homes or community events without a health inspection or a permit. Any cottage food laws are always state-specific and are subject to change at any time. Below are the most popular states with cottage food laws:
Popular States
- Minnesota
- Alaska
- California
- Georgia
- Texas
- Wisconsin
- Florida
- New York
Well Registered Retail Operations
In some places, anyone who sells non-food products such as clothing, books, art objects, souvenirs, etc., can also sell ice produced and packaged by another business, bottled and canned soft drinks, prepackaged candy, and nuts to retail customers without a license. As an example, a bookshop could sell prepackaged candy without a license.
Popular States
- Michigan
- Minnesota
- Washington
- South Carolina
Motels, Bed, and Breakfasts
A kitchen in a private home like a small family day-care provider; or a bed-and-breakfast operation that makes and offers food to guests if the home is owner-occupied. Note that the number of available guest bedrooms will not have to exceed 6, and breakfast is the only meal offered.
Also, the number of guests served should not exceed 18, and the consumer is informed by statements contained in published advertisements, mailed brochures, and placards posted at the registration area that the food is prepared in a kitchen that is not regulated inspected.
Popular States
- South Carolina
- Delaware
Food Banks
Some states waive permit fees, fines, and other charges for charitable feeding organizations like food banks and soup kitchens that give food to vulnerable populations. The waiver also applies to operational requirements and grease traps for food establishments.
Popular States
- Texas
- Minnesota
- South Carolina
- Washington State
Ideally, there aren’t many food operations that do not need permits. Your local jurisdiction may allow you to sell minimally processed drinks (like lemonade) without one, but some form of business permit will be necessary for anyone who wants to make a profit from selling items. However, whether or not a food operation has a food license, they are still required to produce safe, sanitary food products.