HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 663 Cottage Food Operations
SPONSOR(S): Regulatory Reform Subcommittee, Salzman
TIED BILLS: IDEN./SIM. BILLS: SB 1294
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Regulatory Reform Subcommittee 15 Y, 2 N, As CS Thompson Anstead
2) Commerce Committee 20 Y, 3 N Thompson Hamon
SUMMARY ANALYSIS
Cottage foods are certain food products which have been determined by the Department of Agriculture and
Consumer Services (DACS) to be safe for production at a person’s residence. Examples of permissible cottage
foods are breads, honey, cakes, and popcorn. Food products containing meats and fresh fruits and vegetables
or those that require temperature control are generally prohibited cottage foods.
Current law allows a cottage food operation to sell cottage foods without conforming to state food and building
permitting requirements if the annual gross sales of such products do not exceed $50,000. Certain local, state
and federal operating standards must be followed, including those governing methods of sale, delivery,
labeling, and storage.
DACS is authorized to investigate complaints regarding food safety violations involving cottage foods.
The “Home Sweet Home Act”:
Allows the sale and delivery of cottage food products by United States Postal Service or commercial
mail delivery service.
Increases the gross annual sales threshold from $50,000 to $250,000.
Revises the definition of a “cottage food operation” to clarify that an operator is allowed to have
business partners.
Preempts the regulation of cottage food operations to the state, and prohibits local laws, ordinances, or
regulations that prohibit a cottage food operation or regulate the preparation, processing, storage or
sale of cottage food products.
The bill may have a positive fiscal impact on the private sector.
The bill provides an effective date of July 1, 2021.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives .
STORAGE NAME: h0663c.COM
DATE: 3/9/2021
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Present Situation
Cottage Foods
The Department of Agriculture and Consumer Services (DACS) is responsible for the administration
and enforcement of the Florida Food Safety Act.1 The act is intended to:
Safeguard the public health and promote the public welfare by protecting the consuming public
from injury from intrastate commerce in food.
Provide legislation conforming with the Federal Food, Drug, and Cosmetic Act, the Agriculture
Marketing Act of 1946, and Federal Trade Commission Act, to the extent that it expressly
prohibits the false advertisement of food; and
Promote uniformity of state and federal laws and their administration and enforcement
throughout the United States (U.S.) and in the states.2
State and local governments have primary authority over food production. Therefore, states, and not
the federal government, have the ability to decide whether or not in-home food productions are allowed
in that state and what foods qualify for such in-home production.3 The act allows such operations under
certain circumstances.4
Current law defines “cottage food products” (cottage foods), as not a potentially hazardous food as
defined by DACS rule, and which are sold in accordance with cottage food operating requirements.5
Like many other states, DACS adopts the U.S. Food & Drug Administration (FDA) food code.6 The food
code/DACS rule defines “Potentially Hazardous Food/Time/Temperature Control for Safety Food”
(PHF/TCS) as food that requires time/temperature control for safety (TCS) to limit pathogenic
microorganism growth or toxin formation.7
Although DACS has not adopted a rule on cottage food operations, DACS has published guidance
defining foods that are, and those that are not, considered cottage food products. These examples
include the following:8
Permitted Cottage Foods:
Loaf breads, rolls, and biscuits;
Cakes, pastries, and cookies;
Candies and confections;
Honey;
Jams, jellies, and preserves;
Fruit pies and dried fruits;
Dry herbs, seasonings, and mixtures;
Homemade pasta;
1
See ch. 500, F.S.
2
S. 500.02, F.S.
3
Christina Rice, Emily Broad Leib, Cottage Food Laws in the United States, Harvard Law School Food Law and
Policy Clinic (FLPC) (August 2018), https://www.chlpi.org/wp-content/uploads/2013/12/FLPC_Cottage-Foods-Report_August-
2018.pdf (last visited Feb. 19, 2021).
4
S. 500.80, F.S.
5
S. 500.03(1)(k), F.S.
6
U.S. Food & Drug Administration, 2017 Food Code, https://www.fda.gov/media/110822/download (last visited Feb. 21, 2021).
7
R. 5K-4.0010(9), F.A.C.
8
DACS Division of Food Safety, Cottage Food Operations, https://www.fdacs.gov/Business-Services/Food/Food-
Establishments/Cottage-Foods (last visited Feb. 19, 2021). The United States Food and Drug Administration (FDA) model food code
includes a definition for such foods; DACS formed a definition that is similar. FDA Food Code §1-201.10 (2017).
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Cereals, trail mixes, and granola;
Coated or uncoated nuts;
Vinegar and flavored vinegars; and
Popcorn and popcorn balls.
Prohibited Cottage Foods:
Fresh or dried meat or meat products including jerky;
Canned fruits and vegetables, chutneys, vegetable butters and jellies, flavored oils, hummus,
garlic dip, salsas, etc.;
Fish or shellfish products;
Canned pickled products such as corn relish, pickles, and sauerkraut;
Raw seed sprouts;
Bakery goods which require any type of refrigeration, such as cream, custard, or meringue pies
and cakes or pastries with cream cheese icings or fillings;
Milk and dairy products including hard, soft, and cottage cheeses and yogurt;
Cut fresh fruits and/or vegetables;
Juices made from fresh fruits or vegetables;
Ice and/or ice products;
Barbeque sauces, ketchups, and/or mustards; and
Focaccia-style breads with vegetables and/or cheeses.
Cottage Food Operating Requirements
In Florida, a “cottage food operation” is defined as a natural person who produces or packages cottage
foods at his or her residence and is exempt from food and building permitting requirements9 if he or she
sells such products in accordance with the cottage food operating requirements.10
A cottage food operation must comply with the following requirements in order to operate:
• Sales Limit: Annual gross sales of cottage foods may not exceed $50,000;11
• Internet Sales: In order to sell, offer for sale, and accept payment for cottage food products over
the Internet, such products must be delivered in person directly to the consumer or to a specific
event venue.
• Delivery: A cottage food operation is prohibited from offering for sale or delivering cottage food
products by mail order.
• Wholesale Sales: A cottage food operation is prohibited from offering cottage food products at
wholesale.
• Labeling: Cottage foods must be sold prepackaged with a label affixed containing the following
information:
o Name and address of the cottage food operation;
o Name of the cottage food;
o Ingredients of the cottage food, in descending order of predominance by weight;
o Net weight or net volume of the cottage food;
o Allergen information as specified by federal labeling requirements;
o If any nutritional claim is made, appropriate nutritional information as specified by federal
labeling requirements; and
o A statement printed in at least 10-point font and in a color that provides clear contrast to
the background of the label which reads “Made in a cottage food operation that is not
subject to Florida’s food safety regulations;”12
• Storage: Only cottage foods that are stored on the premises of the cottage food operation may
be sold;
9
See s. 500.12, F.S.
10
S. 500.03(1)(j), F.S.
11
S. 500.80(1)(b), F.S. This includes all sales of products from any location, regardless of the types of products sold or number of
persons involved in any operation. Documentation of sales must be available to DACS for verification.
12
Cottage food products must be labeled in accordance with the requirements as outlined in s. 500.80(3), F.S., and U.S. Code of
Federal Regulations Title 21, Part 101.
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• State and Federal: A cottage food operation must comply with applicable state or federal tax
laws, rules, regulations, or certificates;
• Local Government: A cottage food operation must comply with applicable county and municipal
laws and ordinances regulating the preparation, processing, storage, and sale of cottage foods
by a cottage food operation or from a person’s residence.13
Some local governments throughout the state place additional requirements on cottage food
operations. For example, many counties and cities require a cottage food operation, like any other
business endeavor, to obtain a business tax receipt14 prior to commencing his or her production.15
Enforcement
DACS may enter and inspect the premises of a cottage food operation to determine compliance with
the cottage food operations requirements only upon receipt of a complaint, which alleges that a cottage
food operation has violated any of the cottage food operating requirements. If a cottage food operation
refuses to permit DACS to enter the premises or to conduct the inspection, he or she is subject to
disciplinary action.16
Recent Trends
Sales Limits
A study conducted by the Harvard Law School Food Law and Policy Clinic provides the following data
regarding annual gross sales limits for cottage food operations in other states:
Sales limits differ among the states, ranging from $10,000 to no limit at all.
About half of the states place a limitation on the amount of income a cottage food operation can
earn in a year.
In those states, once a cottage food operation exceeds the cap, typical food establishment
requirements and permitting rules kick in.
South Carolina only allows $15,000 in annual gross sales.
Other states like Texas limit the sale of cottage foods to $50,000 per year.
More than half of states, including Georgia, Massachusetts, New York, North Carolina, and
Tennessee, do not place a sales limit on cottage food operations or have no limit on at least
some types of cottage food operations.17
According to the study, sales limits “limit the scale of operations that are allowed to sell without full food
safety precautions in place… sales limits also prevent cottage food operators from scaling up and
generating a livable income from their business.”18
According to an Institute for Justice article on cottage food laws, “the national trend line is moving
toward more food freedom. More laws pass every year, expanding the right to sell homemade food.”19
13
S. 500.80(1)-(6), F.S.
14
Chapter 205, F.S., allows counties and cities to impose taxes for the privilege of engaging in or managing any business, occupation,
or profession within its jurisdiction. This tax is administered through the issuance of a local business tax receipt. In order to impose
this tax, the local government entity must adopt an ordinance, which outlines the amount of the tax, method of computation, and other
requirements.
15
Examples include City of Miramar and St. John’s County. City of Miramar, Business Tax (Occupational Licenses),
http://www.miramarfl.gov/201/Business-Tax-Occupational-Licenses (last visited Feb. 19, 2021); and County of St. John’s Tax
Collector, Business Tax FAQs, http://www.sjctax.us/BusinessTaxFAQ.aspx (last visited Feb. 19, 2021).
16
S. 500.08(7)(a)-(b), F.S.
17
Christina Rice, Emily Broad Leib, Cottage Food Laws in the United States, Harvard Law School Food Law and
Policy Clinic (FLPC) (August 2018), https://www.chlpi.org/wp-content/uploads/2013/12/FLPC_Cottage-Foods-Report_August-
2018.pdf (last visited Feb. 19, 2021).
18
Rice, Leib, Supra note 17, at 14.
19
Institute for Justice, Defending Your Right to Sell Homemade Food, https://ij.org/issues/economic-liberty/homemade-food-seller/
(last visited Feb. 22, 2021).
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Florida’s gross annual sales limit is $50,000.20 It was raised from $15,000 to $50,000 in 2017.21
Business Partnerships
According to the Internal Revenue Service (IRS) Partnerships webpage, “a partnership is the
relationship between two or more people to do trade or business. Each person contributes money,
property, labor or skill, and shares in the profits and losses of the business.”22
Florida partnership law is governed by ch. 620, F.S. The law sets forth requirements for anyone
wanting to establish a new partnership in the state of Florida. Under these rules are specific
requirements regarding all types of partnerships, including the following:
Limited partnerships;
General partnerships;
Limited Liability partnerships; and
Foreign limited partnerships.
All partnerships must be registered with the Florida Department of State and follow all requirements
found within ch. 620, F.S., which include the creation of the business, the paperwork and fees
associated with creation, and the ongoing upkeep and maintenance of such partnerships.23
According to an American Express online article on advantages and disadvantages of business
partnerships, for those considering a business partnership as a way to grow a company, a partnership
can offer the following benefits:
Bridging the Gap in Expertise and Knowledge: access to a wider range of expertise, additional
knowledge and experience, and complementary skills.
More Cash: infusion of cash into the business, more strategic connections, and enhanced
borrowing ability to finance growth.
Cost Savings: shared financial burden for expenses and capital expenditures needed to run the
business, and more substantial savings.
Better Work/Life Balance: shared labor, lightened workload, allowing time off when needed,
knowing that there's a trusted person in charge, and positive impact on personal life.
Moral Support: ability to brainstorm or debrief on important issues, support when setbacks are
encountered, and help coping with everyday frustrations.
Potential Tax Benefits: does not pay income tax, instead, "passes through" profits or losses to
its partners. Each partner reports their share of the partnership's income or loss on their
personal tax return. This may allow partners to deduct any business losses from their individual
tax return.24
Some disadvantages include liabilities, loss of autonomy, personal conflicts, future selling issues, and
lack of stability. However, in analyzing advantages and disadvantages of a partnership, the advantages
may outweigh the disadvantages, and some of the disadvantages of a partnership may be overcome
with due diligence.25
Current law does not appear to specifically allow cottage food operators to participate in partnerships.
The law defines a “cottage food operation” as a natural person who produces or packages cottage food
products at his or her residence and sells such products in accordance with s. 500.80, F.S.26 The
20
S. 500.80(1)(a), F.S.
21
Ch. 2017-32, Laws of Fla.
22
Internal Revenue Service, Tax Information for Partnerships, https://www.irs.gov/businesses/partnerships (last visited Feb. 22,
2021).
23
Ch. 620, F.S.
24
American Express Trends and Insights, What Are the Advantages and Disadvantages of a Partnership?,
https://www.americanexpress.com/en-us/business/trends-and-insights/articles/what-are-the-advantages-and-disadvantages-of-a-
partnership/ (last visited Feb. 22,