Baking and cooking can be fun and restorative hobbies. They can also be ways to bring in extra income. In Colorado, home bakers and chefs can sell certain food products without getting a commercial license or permit, which is referred to as starting a cottage food business.

You can make foods in your home, or you can rent commercial kitchen space to make items for your cottage food business. Before starting a cottage food business in Colorado, it’s essential to familiarize yourself with the rules regarding what foods can be sold, how to label them and how to ensure food safety.

Selling Food in Colorado From Home

Colorado’s cottage food laws allow the production of certain foods that are not considered hazardous. You can sell:

  • Teas and spices. * Nuts, seeds and roasted coffee beans. * Jams, jellies, preserves and most fruit butters. * Honey. * Candies. * Certain baked goods. * Pickled fruits and vegetables. * Dehydrated produce. * Tortillas. * Flour. * Fruit empanadas.

Colorado law also states that you can sell other foods that are not potentially hazardous. In general, these are foods that don’t require refrigeration.

What Foods Are Prohibited?

Colorado’s home-cooked food and bakery rules prohibit some foods that could be hazardous. These foods include:

  • Ready-to-drink beverages such as coffee. * Pepper jelly. * Pumpkin butter. * Fresh or canned fruits and vegetables. * Condiments and sauces. * Baked goods with ingredients that require refrigeration, such as cream, custard or meringue. * Milk or dairy products. * Oils or vinegar. * Fresh or dehydrated pasta. * Fresh or dehydrated meat.

If you have questions, the Colorado State University Extension offers extensive resources as does the Colorado Department of Public Health and Environment.

Where Can You Sell Foods?

You can sell foods directly from your home or at a farmers' market or roadside stand. You can also sell online as long as you only sell your products within the state of Colorado. You can't sell to restaurants or grocery stores.

Other Cottage Food Requirements

The label must also have the following disclaimer: “_This product was produced in a home kitchen that is not subject to state licensure or inspection and that may also contain common food allergens such as:

  • tree nuts
  • peanuts
  • eggs
  • soy
  • wheat
  • milk
  • fish
  • crustacean shellfish

This product is not intended for resale_.”

Business Tax Responsibility

Since you are operating your own business, you will also be responsible for paying taxes on what you make. You can utilize software or hire an accountant to help you determine how much you owe and how often you need to make tax payments.

You are also responsible for paying sales tax. To collect and pay sales tax, you will need to set up an account with the Colorado Department of Revenue and obtain a sales tax license. Depending on how much you collect in sales tax, you may have to pay annually, quarterly or monthly.

Business Registration and Insurance

You are not required to register your business with the state, but you can if you like. You may have to register your business locally. If you are using a trade name that’s different from your legal name, you are required to register the trade name with the Secretary of State.

You are also not required to carry insurance. You may choose to do so, though, for extra protection for your business, and some farmers' markets require you to carry liability insurance.