If you are looking for a way to make some supplemental income Michigan’s new cottage industry law makes it possible for you to make a little extra income selling things you made at home in your own kitchen , maybe using that extra produce from your garden. If you make the world’s best strawberry jam, garlic bread, chocolate cake or peanut brittle this law may certainly help you make a little money from it.
Starting in June of 2010 the new law allows people to bake or cook certain things and sell them from their own roadside stand or at a farmers market without having to produce those items in an MDA inspected and approved kitchen. The expense of such a kitchen or the trouble of having to find one to rent often deterred start up businesses in the past. Now you can test your products to see if they sell before investing in a lot of expensive upgrades to your kitchen.
Milk and meat items produced at home, (with exception below for poultry) and most items that require refrigeration aren’t included, so that artisanal cheese will have to wait, but there are many other possibilities. Homemade jams, jellies, baked goods, fruit pies, dried herb mixes, flavored vinegars, popcorn, coated nuts and candy are a few possibilities. Canned items such as canned tomatoes or salsa are also excluded as are alcoholic beverages. Cider can be sold if it is made at home and carries a label warning that it is not pasteurized.
Sales from your products can’t exceed $15,000 dollars a year and you can’t sell them over the internet, by mail order, over state lines, or to wholesalers. Products must be labeled with certain statements, including one that says it’s produced in a home kitchen and a list of ingredients. You can find the labeling requirements by going to this site.
You cannot label the food as organic unless it has been produced from products grown on a certified organic farm. You must also avoid any medicinal claims and if you claim any nutritional advantages such as low sodium or high in fiber you must comply with federal labeling requirements.
This isn’t covered by the cottage industry act but in Michigan up to 20,000 units of poultry, such as chicken or turkey can be sold by the grower without having to have the meat inspected. The grower cannot buy birds from other people and process them for sale. He or she must process their own poultry. The poultry must be refrigerated or frozen until sold. Eggs may also be sold by the farmer who produces them directly to the consumer. They must be kept refrigerated until sold and must be in clean egg cartons with the producers contact information on them.
If meat from large farm animals is processed in a continuously inspected facility the producer can sell it from home or a farm market, providing it is properly labeled and kept refrigerated or frozen. However you cannot make jerky, sausage, or other meat products in a home kitchen and sell it unless your kitchen has been inspected and approved.
Remember that sales from your home or putting a stand out by the road may be regulated by local laws. This new law doesn’t change those laws. If this is so you will have to factor the cost of traveling to a farmers market or other site and perhaps paying a booth rental fee into your profit margin.
You may want to talk to an insurance agent about liability insurance if you decide to do a lot of sales. If someone claims to have been sickened or injured by your product
or injured on your property you don’t want to lose everything you own. In general you will not have to pay sales tax as tax isn’t collected on foods. However you will have to pay taxes on your income.
If you have questions about what is allowed to be sold or how it is to be handled or packaged please call the Michigan Department of Agriculture toll-free at 1-800-292-3939. This article is written for general information. Laws and regulations can change. Please research your planned products carefully to make sure they comply with all current legal requirements.
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