Colorado

Law status: ENACTED


Sales type
Direct only
Sales venues
5 out of 8 allowed
Allowed foods
Many

Sales limit
$5,000 per product per year
Startup cost
$16

The “Colorado Cottage Foods Act” began in 2012 and was recently amended in 2013. The law restricts producers to direct sales only, but no license or permit from the health department is required. However, producers must take a training course before they can start selling.

One thing that differentiates Colorado from other states is that rather than limiting overall sales per year, they limit the sales of each product.  This is interesting in that it essentially allows producers to sell an unlimited amount of food, as long as they keep creating different products.  Colorado is also different in that they allow products to be made in other kitchens beyond the producer’s home kitchen.

Selling

Sales Venues
  • Home
  • Farmers markets
  • Food stands
  • Retail stores
  • Restaurants
  • Events
  • Mail orders
  • Internet

Only direct sales to consumers are allowed.  The law is not specific enough to include or exclude internet sales.  It is up to the interpretation of producers to determine whether or not they are doing direct sales to consumers.

The producer can make no more than $5,000 of net revenue per year from a product, but product variants are considered different products.  For instance, strawberry jelly and grape jelly are two different products.

Sales are limited to $5,000 per product per year

Business

Base Startup Cost$16

    Requirements

  • License
  • Home inspection
  • Training
  • Business License

Even though no license or permit (from the health department) is necessary, every cottage food producer must take a food handler training course. This can be a course from CSU Extension’s Food Safety Works program, or something similar. Courses from the CSU Extension program occur regularly around the state and usually cost between $5 and $30. You can contact your local health department to learn about the upcoming courses in your area.

Cottage food operations are not required to collect state sales tax, but they may be required to collect local sales taxes. To see if this could apply to you, check out this page and click on “View Local Sales Tax Rates”. Even if your county does require sales tax, you may still get an exemption because you’re selling food that won’t be consumed on your premises. But you need to check with your city and/or county about that.

Cottage food operations must operate as a sole-proprietorship.

Allowed Foods

  • Biscuits
  • Breads
  • Brittles
  • Brownies
  • Cakes
  • Cereals
  • Chocolate
  • Chocolate-covered fruit
  • Chocolate-covered items
  • Cobblers
  • Confections with alcohol
  • Cookies
  • Cotton candy
  • Crackers
  • Dried fruit
  • Dried vegetables
  • Dry coffee
  • Dry tea
  • Fruit butters
  • Fudge
  • Granola
  • Hard candies
  • Herbs
  • Honey
  • Jams & jellies
  • Mixes
  • Muffins
  • Nuts & seeds
  • Pastries
  • Pies
  • Preserves
  • Pretzels
  • Rolls
  • Scones
  • Seasonings
  • Soft candies
  • Spices
  • Sweet breads
  • Whole eggs

Jalapenos jellies/preserves, pumpkin butter, and jams/jellies with low sugar are not allowed. Whole eggs may only be sold under certain conditions, including a 250 dozen per-month limit.

Labeling

Label Requirements
  • Product name
  • Business name
  • Business address
  • Phone number
  • Email address
  • Ingredients
  • Net weight
  • Date produced
  • Allergens
  • Nutrition info
  • Statement
Sample Label

Chocolate Chip Cookies

"This product was produced in a home kitchen that is not subject to state licensure or inspection and that may also process common food allergens such as tree nuts, peanuts, eggs, soy, wheat, milk, fish, and crustacean shellfish. This product is not intended for resale."

Forrager Cookie Company
123 Chewy Way
Cookietown, CO 73531
(123) 456-7890

Ingredients: enriched flour (wheat flour, malted barley flour, niacin, iron, thiamin mononitrate, riboflavin, folic acid), butter (cream, salt), semi-sweet chocolate (sugar, chocolate, cocoa butter, milkfat, soy lecithin, natural flavors), brown sugar, granulated sugar, eggs, vanilla extract (vanilla bean extract, alcohol, sugar), baking soda, salt (salt, calcium silicate)

Produced on 4/18/2014

Alternatively, an email address can be substituted for a phone number.

The address on the label should be the location where the product was made.

Workplace

Beyond their home kitchen, a producer can also make their products at other private, public, or commercial kitchens.

This page was last updated on July 15th, 2013

Lillian

I will be selling cakes, cookies, rolls etc. by cottage foods laws. I was wondering if you knew if I need to pay occupational privilege tax (Denver). Also, I plan on selling these goods from my home and around on my bicycle. Being Cottage Foods, I am not technically a food vendor, so do I still need some sort of license and what kind?

Are internet sales out of the state allowed?

Jennifer

David:

Thank you for all of his great information. I can say that perhaps my dream can begin to take place now that I have discovered this web page and all of the info!

Stacey

I noticed that Jams/Jellies with low sugar a not allowed. Why is that? What if I used a sugar substitute like Xylitol or Stevia?

    I’m not an expert on the science behind this, but it has something to do with the fact that sugar will prevent the growth of bacteria, thus significantly reducing (or eliminating) the chances of botulism. I’m not sure if sugar substitutes carry the same properties as regular sugar to prevent bacteria growth.

chris

What about hot sauces?

Emalie Irons

Is peanut butter or almond butter allowed?

    Based on the info they’ve posted online, I highly doubt that the health dept allows nut butters, but you can call them to make sure.

According to the act, as I read it, milk products are considered a potentially hazardous ingredient; yet your list if foods includes fudge. Would a ganache truffle (made with cream and chocolate) covered in a tempered chocolate coating be acceptable under the law?

    Milk products are potentially hazardous under certain circumstances. When milk is added to cake batter and then baked, it is no longer potentially hazardous. A ganache truffle would probably be borderline, and whether or not it needs refrigeration would depend on factors that would probably need to be tested in a lab. You can ask your health dept and see if they will allow it without lab testing.

Janna

Does BBQ sauce fall under cottage law?

Ron

I’m looking to sell smoothies at local farmers markets. There would be a pre-packaged mix, fresh fruit, milk, and no prep would be done at home. How would that fall under CO law?

Kate

Thank you for this easy to follow information!

Lisa

What legal document directs that in the state of Colorado that the business structure must be a sole-proprietorship? I have seen posts from the Colorado extension webinar that it can also be a limited partnership (husband and wife, sisters, etc.) and I have an e-mail from Boulder County indicating that even an LLC may be allowed. Where is the governing document about business structure for cottage foods business in Colorado?

I am curious about a baking business, I am just getting started and want to be able to sell my cakes and just curious about the laws. It seems like I would be covered but I just wanted to make sure. I probably would make little to no profit off of it because I am just getting started. I just need some help getting pointed in the right direction! Please HELP!!!

Where would i find information for small business food sales that do include the other items, like meat, poultry and fish?

    I wish I knew — it seems like there are too many rules in too many counties to really have a comprehensive site about them. http://cottagefoods.org/faq/#commercial

    connie bobka

    I know a lady who owns a custard shop and she said I could see my cookies, cupcakes and muffins in her store. Is this allowed under the cottage law?If not what license would apply here?

    Also, what about selling to a grocery store?

    Indirect sales like that are not allowed under the cottage food law, and you would have to create a commercial business. http://cottagefoods.org/faq/#commercial

    Steve Ruhl

    Pay a visit to your local health dept. I had a commercial bakery for three and a half years and they are a great
    source of information and help, that is in fact what they are paid to do as well as insure public safety.
    As with any agency there are those who are sometimes a bit surly, but if you look forward to their
    help, it works a WHOLE lot better.

Mary

I am trying to start a small tea room. Am I looking in the correct site for a cottage industry? I will be making limited sweets and savories to be consumed basically on premises.

    A cottage industry means that you are preparing the items in your home kitchen. This site only covers the laws for selling dry tea that you prepare at home. If you are trying to start a business outside your home, then you should contact the health dept for more info.

    connie bobka

    If I am preparing cookies, cakes etc. Out of my home but selling them not only to consumers but to businesses, is selling my goods to businesses allowed?

    No — you must sell them yourself and they cannot be resold.

    Steve Ruhl

    One note of clarification, one cannot sell wholesale under the cottage law. However one can sell at two separate
    farmer’s markets that are taking place at the same time, another person can sell for you direct to the public.

I’m trying to start by selling coffee out of my home and running a coffee shop out of my home is that ok???

    It’s only okay if it’s dry, roasted coffee beans. You definitely cannot run a coffee shop from your home… you’d run into all sorts of legal problems, like zoning issues. Many people illegally sell things they make at home, and often the health dept doesn’t really care, but if you started a coffee shop at your home illegally, expect the health department to come after you. Just letting you know!

I see that confections with alcohol are listed under the allowed foods, but I am curious as to if there is a certain alcohol percentage the goods must stay under? Also, does “confection” solely designate a hard candy/baked good, or can it be fruit preserved in alcohol?

    I do not know for sure… I got the info about alcoholic confections here.

    I do know that your final product must be safe without refrigeration. My guess is that non-hard candies, like truffles, would be allowed, but you need to talk to the health dept.

It looks like I do not need to charge sales tax in Colorado Springs, El Paso county. (?) It says on Revenue Online that I’m am in a Home Rule city. Can you confirm or do I charge 2.9%? Thanks!

    I can’t really confirm, but that sounds like it’s probably right. Usually cottage food operations don’t need to charge state sales tax, but sometimes they need to charge local sales taxes. Your best bet is to call around in the government departments to find someone who knows the answer. I know it’s hard to find this info online.

    Tiffani

    Sheila, what did you find out? I’m a cookie baker in Colorado Springs.

Mike

What about hot coffee and sodas?

Liz

We are wanting to make vinegar, vanilla, and maybe a spice rub, are these considered cottage foods in Colorado? I don’t see the vinegar or vanilla listed one way or the other.

Thanks!
Liz

    I don’t think vinegar and vanilla are allowed. They are neither on the allowed or disallowed lists, but usually they would list these items if they were allowed. The spice rub should be okay.

Sue Minnick

I have a sweet hot mustard relish. Would this come under the cottage law? It does not need to be refridgerated until it is opened. Also, it comes in mild, med hot and ex hot, is that four different products under the $5,000 per product per year?

Dee

I’m a little confused. You state that you don’t need a license, but then I see that under this act you have to register as a Sole Proprietor. Can you clarify. I’ve already registered a Trade Name, do I still need to register as a Sole Proprietor? Is the Tax ID number registered under my Trade Name?

    Sorry for the confusion… that statement on this page refers to the fact that you don’t need a license from the health department. Technically, you don’t actually need to register to operate as a sole proprietor. If your county doesn’t require a business license, then you would just be considered a sole proprietor by default for tax purposes. When you say you have a trade name, that sounds like you have a DBA (doing business as). I know that you can do income taxes as a sole proprietor with a DBA… I’m not sure about the trade name but it sounds like the same thing for your area.

Kayla

As far as the 5k income cut off per product, is that yearly quarterly or ever?

    Yearly, but remember that you can slightly tweak your products to create new ones, so it doesn’t need to be that limiting, depending on what you’re making. For example, you could turn chocolate chip cookies into white chocolate chip cookies, dark chocolate chip cookies, milk chocolate chip cookies, chocolate chocolate chip cookies, and walnut chocolate chip cookies for five different products. Also, thanks for pointing out that missing info — I’ve now added it.

Linda

What about homemade salsa? People tell me MINE is awesome and I would like to can and sell it at different venues.

For the date produced can it just be the year or year and month or does it have to include the day?

Name *

What about taxes on the sales and reporting it to the irs

    You shouldn’t have to collect state sales taxes, but you may need to pay local sales taxes. To see if this could apply to you, check out this page and click on “View Local Sales Tax Rates”.

    Even if your county does require sales tax, you may still get an exemption because you’re selling food that won’t be consumed on your premises. But you need to check with your city and/or county about that.

1. Do you know if I can I sale my cookies online? If so, can I sale them to out of state customers?
2. And can I sale Indonesian bakery (cookies, cakes, mostly vegan) from my home kitchen?
3. Where can I get the license?

Thanks.

    1. Please read the notes in the selling section. In addition to that, it’s worth noting that shipping would not be allowed. If it were my business, I would sell online, but you must meet the buyer in-person to deliver their purchase.
    The law does not say whether or not interstate sales are allowed. Almost all states disallow interstate sales, since the federal food laws disallow sales of homemade food. If it were my business, I would not do interstate sales. I doubt, however, given that you can’t ship, that interstate sales would ever really be feasible anyhow.

    2. As long as they fall into the list of allowed foods and don’t need refrigeration, then yes.

    3. You don’t need a license — all you need is training.

I am Servsafe certified until 2018, would I still be required to complete a food handler training course?

Ann

Can I sell shelf stable syrups? I do not see it specifically listed.

Jen

If I use a commercial kitchen does the labeling change? I am not technically making food…simply repackaging spices and teas.

    Assuming that you’re operating as a cottage food business and not with a commercial license, then the labeling would not change. It’s funny that you ask this, simply because Colorado is one of the only states that actually allows cottage food operators to also use a commercial kitchen for preparing their products. In basically any other state, you would need to follow the federal labeling requirements.

Tamara

Can I sell my cake pops to local businesses?

I am trying to find out what the scoop is on cream cheese icing with a pH of 4.85 that is used with my GF cinnamon rolls.

    If it needs refrigeration, it would not be allowed. I assume you’re trying to determine if it needs to be refrigerated or not.
    Interestingly, each state has different rules about what “non-potentially hazardous” means, but generally, it refers to items that are below a pH of 4.6 or below a water activity level of 0.85. I would think that a frosting would have a rather high water activity level. You can get products tested in a lab to determine if they are shelf-stable… I know a shelf-stable cream cheese frosting is possible, but my guess is that yours is not quite there. That’s just a guess though.

I am curious about the 5,000 sale limit of each product. What if I sold Sugar cookies and were shaped and decorated a different way? Would that fall into all the same sugar cookie product or would they each be different??

    I think different shapes would be the same product, since it’s the same recipe. But if you get creative, you could probably pretty easily expand your sugar cookie business. For instance, you could simply switch the extracts used for different products… you could have “Lemon Sugar Cookies”, “Almond Sugar Cookies”, etc.

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