Vermont Cottage Food Law: Act 42 Exempts Sales of $30,000 or Less, and the $100 Home Bakery and $155 Home Caterer Licenses
Vermont Cottage Food Law: Act 42 Exempts Sales of $30,000 or Less, and the $100 Home Bakery and $155 Home Caterer Licenses
If you bake bread, cookies, granola or jam in your home kitchen and want to sell it in Vermont, the most important fact is this: since July 1, 2025, Act 42 of 2025 lets home food sellers operate with no license and no fee as long as their gross annual cottage food sales are $30,000 or less. That is the state's cottage food exemption, and it is what most people searching for a vermont cottage food law answer actually need. The $100 Home Bakery and $155 Home Caterer licenses come into play when your sales go above that level or when your food falls outside what the exemption covers. Many sellers who hear the phrase vermont cottage food license are really asking about the exemption, so this guide starts there.
This guide explains who qualifies, what the exemption requires, when you need one of the two licenses, and which taxes and local rules still apply. It is written for Vermont sellers and is informational only. See the disclaimer at the end.
Who the cottage food exemption covers
Under Act 42, a cottage food operator who produces food in the home kitchen of a private residence, or in a kitchen on personal property, needs no license and pays no fee if gross annual cottage food sales are $30,000 or less. The exemption depends on two things: where you produce the food and how much you gross in a year. You do not need a commercial kitchen to qualify for it when your products are cottage foods.
Food processors who are not cottage food operators are also exempt if their annual gross sales are $10,000 or less. The state fee table begins at $10,001, so a seller above that line falls under the fee schedule. Confirm with the Vermont Department of Health which category fits your operation before you rely on either threshold.
What you must do to keep the exemption
The exemption comes with four conditions. If you miss any one of them, you are outside the exemption.
Complete the training every year
You must complete the Vermont Department of Health online training each year. Treat it as a recurring task on your calendar, not a one-time step.
File the online exemption by January 15
File the online exemption with the Department of Health by January 15 each year. The first deadline was January 15, 2026, so it has already passed for this cycle. The next deadline is January 15, 2027. If you began selling after the first deadline, file as soon as you start and confirm with the Health Department how your first year should be handled.
Label every package
Each product label must show:
- Your name and address as the producer
- The product name
- Ingredients listed by weight
- Net weight
- Federal allergens
- The statement “Made in a home kitchen not inspected by the Vermont Department of Health” in 10-point type, in a contrasting color
Check the label against this list before every batch. A missing allergen or a missing home kitchen statement is one of the easiest ways to fall out of compliance.
Stick to shelf-stable products
Cottage foods must be non-TCS, meaning they do not require time or temperature control for safety. Products on the cottage food list include breads, cookies, candy, jams, granola, dry herbs and coffee beans. Items that depend on refrigeration do not qualify. Cheesecake, quiche and cheese danish are examples of products that are not cottage foods.
Sell directly to customers
Exempt food cannot be sold to restaurants or other licensed establishments. Your customers buy from you directly, at a farmers market, a farm stand, through a pickup arrangement or by similar direct means. The Manufactured Food Rule sanitation requirements still apply to your operation even though you are exempt from licensing.
When you need a Home Bakery or Home Caterer license
You need a license when your gross sales exceed $30,000 or when your product falls outside the exemption. Vermont has two licenses designed for home kitchens, and they are not interchangeable.
| Feature | Home Bakery license | Home Caterer license |
|---|---|---|
| Fee | $100 | $155 |
| What it covers | Non-TCS baked goods, domestic kitchen only | Prepared food sold direct to customers, or food prepped for later cooking at an event or farmers market |
| Application | Online, at least 30 days before you start | Online, at least 30 days before you start |
| Inspection | Required | Required |
| Private well | Annual well-water test | Annual well-water test |
The 30-day lead time is the step sellers most often underestimate. Build it into your launch date, and do not start selling until your license is in hand. If you rent your home, get your landlord's permission before you apply. Without it, the application will not move forward.
Taxes: the meals and rooms tax still applies
The cottage food exemption is a licensing exemption. It does not exempt you from tax. Vermont's 6% sales tax applies to goods and a short list of items, and it reaches almost no services. Prepared food, coffee, bakery items eaten on the spot and catering fall under the separate 9% meals and rooms tax, which is 10% on alcohol. Fifty Vermont towns also add a 1% local option tax on top, so check whether yours is one of them.
Grocery-type items are treated differently. Under 32 V.S.A. 9202(10), whole pies, cakes and loaves, along with single-serving bakery items sold three or more at a time, are grocery-type items outside the meals tax. Other single items sold the way a restaurant sells food are subject to the 9% meals tax. Because the answer depends on how you package and sell each product, confirm the treatment of your specific items with the Department of Taxes before you set prices.
If you collect sales or meals tax, you must register for a business tax account with the Department of Taxes. Start at tax.vermont.gov/business/register. Registering for a tax account is separate from the health exemption, so completing one does not complete the other.
Zoning and your town
Vermont has 14 counties, but they have no licensing or zoning role for a home food business. Your town, city or village holds zoning authority and any local license, and the rules vary widely from one municipality to the next.
Two state provisions give home food sellers useful protection. Under 24 V.S.A. 4412(4), a town cannot prohibit a home occupation that uses a minor portion of the dwelling. Under 24 V.S.A. 4412(11), a town cannot prohibit accessory on-farm businesses, and that category includes selling bread or baked goods. These protections do not answer every local question. Read your town's zoning bylaws and ask the zoning administrator about signage, parking and customer traffic before you open for sales.
Register your name and, if you choose, your entity
The cottage food exemption does not require an LLC or corporation. Many home sellers operate as sole proprietors under their own name. If you sell under a different name, such as “Hilltop Bakehouse,” register an Assumed Business Name with the Vermont Secretary of State's Business Services Division. The registration costs $70, and reregistering costs $65. Renewal is required every five years. Start at sos.vermont.gov/business-services/business-filings/assumed-name.
An LLC is optional. The Vermont filing fee for an LLC is $155, and the annual report fee is $45. Pass-through entities, including LLCs taxed as partnerships or S corporations, owe a minimum annual entity tax of $250, paid with Form BI-471 or BI-476. A disregarded single-member LLC does not owe that $250 minimum. Whether an LLC makes sense for a small food business depends on your liability exposure, your tax picture and your plans for growth, so talk with a CPA before you decide.
Step-by-step checklist
- Confirm that each product is a cottage food (non-TCS) and that you will sell it directly to customers, not to restaurants or licensed stores.
- Estimate your gross annual cottage food sales. If you expect to exceed $30,000, plan for a Home Bakery or Home Caterer license and its 30-day lead time.
- Complete the Vermont Department of Health online training.
- File the online exemption. The next deadline is January 15, 2027, and the filing repeats every year.
- Print labels with every required element, including the 10-point home kitchen statement.
- If you rent, obtain your landlord's permission in writing before you apply for any license.
- Register with the Department of Taxes if you collect sales or meals tax, and confirm the treatment of each product.
- Check your town's zoning bylaws and ask whether it requires any local license.
- Register an Assumed Business Name if you sell under a name other than your own.
Common mistakes
- Selling refrigerated items such as cheesecake or quiche under the cottage food exemption.
- Supplying a café, restaurant or licensed store while relying on the exemption. Exempt food cannot go to those buyers.
- Missing the January 15 filing or skipping the annual training.
- Omitting the home kitchen statement or the allergen declaration from a label.
- Starting sales before a Home Bakery or Home Caterer license has been issued.
- Assuming that your town's zoning follows the state rule, when local bylaws often add their own requirements.
Official resources
- Vermont Department of Health, home-based food information: healthvermont.gov
- Vermont Secretary of State, Business Services Division: sos.vermont.gov/business-services
- Vermont Department of Taxes: tax.vermont.gov
- Vermont Statutes Online: legislature.vermont.gov/statutes
- Agency of Agriculture, Food and Markets, which handles dairy and meat: agriculture.vermont.gov
- Vermont Small Business Development Center: vtsbdc.org
This guide is informational content, not legal or tax advice. Fees, thresholds and deadlines can change, so confirm current requirements with the Vermont Department of Health, the Department of Taxes and your town before you sell. For a complex situation, such as a growing business, an entity decision or a lease with unusual terms, talk with a qualified attorney or CPA.