If you bake sourdough, decorate cakes, or jar jam from your Michigan home kitchen, the ceiling on your business just doubled — and the "in person only" rule that kept you chained to farmers market tables is gone. Two new laws signed in early 2026, House Bill 4122 and Senate Bill 93, are the biggest overhaul of Michigan's cottage food rules in years. Here is what changed, what stayed the same, and how to keep your books clean under the new limits.
What HB 4122 Changes for Cottage Food Operations
HB 4122, signed into law and effective March 24, 2026, rewrites three of the most restrictive parts of the original Michigan Cottage Food Law. Previously, every sale had to happen face to face: you handed the product directly to the customer at a farmers market, farm stand, or roadside stand, and internet or mail-order sales were flatly prohibited.
You can now sell online, by mail, and through third-party delivery
Cottage food products may now be sold by internet or mail order, and you may deliver to customers through a third-party delivery platform. That means an Etsy-style storefront, your own website with shipping, and app-based local delivery are all on the table for the first time.
There are two important guardrails:
- Michigan buyers only. The exemption covers direct sales to consumers within the state. Shipping across state lines puts you under federal food rules and the other state's laws, so keep your checkout geo-fenced to Michigan addresses.
- The buyer must have a chance to interact with you. The law requires an opportunity for face-to-face or virtual interaction between producer and consumer. In practice, that means your online storefront should give customers a real way to reach you — a chat option, a phone number, a video call link, or a live market schedule — not an anonymous shopping cart with no human behind it.
Wholesale and consignment sales remain prohibited. Every product must still go directly from your operation to the person who will eat it.
The sales cap doubles to $50,000 — and higher for premium products
The old gross annual sales cap of $25,000 is now $50,000. If you sell individual products priced at $250 or more per unit — think large wedding cakes or bulk holiday gift collections — your annual cap rises to $75,000.
Starting October 1, 2026, both caps adjust annually for inflation, so the ceiling will creep upward instead of sitting frozen for another decade. Track which tier you fall into: the $75,000 tier depends on your per-unit pricing, not your total revenue, so a single product line priced at $250 or above changes the math for your whole operation.
A voluntary registration system protects your home address
Under the labeling rules, every cottage food product must carry the name and address of your business — which, for a home operation, has always meant printing your home address on every loaf and jar. HB 4122 creates a voluntary registration system that lets you put a registration number on the label instead, keeping your home address private.
Registration is optional, not a license. Michigan cottage food operations remain exempt from licensing and routine inspection. But if you sell online, where labels are photographed, shared, and screenshotted far beyond the farmers market crowd, the privacy benefit alone makes registration worth doing.
What SB 93 Changes for Honey and Maple Syrup Producers
Honey and maple syrup are not technically cottage food products under Michigan law — they live under a separate licensure exemption. SB 93 raises the gross-sales threshold at which a honey or maple syrup producer loses that exemption from $15,001 to $25,000, aligning these producers with the cottage food framework and tying future increases to the cottage food cap so the two move together.
If you run a small apiary or sugarbush and sell prepackaged Michigan-made product from your own retail outlet, you now have considerably more room to grow before licensing kicks in. Note the threshold applies to the producer's gross sales, so the same careful revenue tracking that cottage food bakers need applies to you too.
What Did Not Change
The new laws expand where and how much you can sell, but the core food-safety bargain is untouched:
- Only non-potentially-hazardous foods qualify. Products must be safe at room temperature with no refrigeration: breads, cakes, cookies, jams, dry mixes, popcorn, and similar items. Anything requiring temperature control for safety — cheesecakes, cream pies, fresh salsa, meat products — still needs a licensed kitchen.
- Labeling is still mandatory. Name and business address (or your new registration number), product name, ingredients in descending order of predominance, net weight, allergen information, and the required cottage food disclaimer statement all still belong on the package. For cakes that cannot take a sticker — wedding cakes, birthday cakes — the full labeling goes on the invoice delivered with the cake.
- No license, no routine inspection, no required certification. You still do not need a food establishment license, a kitchen inspection, or ServSafe certification to operate under the exemption.
- Local rules still apply. Zoning, home-occupation ordinances, and individual farmers market vendor requirements sit on top of state law. A city can still restrict home businesses or require vendor permits even when the state exempts you from food licensing.
The Bookkeeping Playbook for the New Rules
A bigger cap and online sales are only good news if your records can prove you stayed inside the lines. Gross sales is the number the state cares about, and it means every dollar of product revenue before expenses — not profit, not net of shipping fees, not "what hit my bank account after the platform took its cut."
Track gross sales against your cap in real time
Set up a simple running total of gross product sales for the calendar year, and check it monthly — weekly once you pass $35,000. If you sell any item at $250 or more per unit, flag it, because that pricing decision is what qualifies you for the $75,000 tier. Keep invoices and order records that document unit prices; if your tier is ever questioned, the per-unit price on the invoice is your evidence.
Platform fees, shipping charges you pass through, and sales tax you collect are worth tracking in separate columns so your gross-sales figure stays clean and defensible. A bookkeeping setup that separates product revenue from reimbursements and fees makes this nearly automatic — see the docs for how plain-text ledgers keep each stream in its own account.
Separate your sales channels
You now have up to four channels — in-person markets, your own website, mail order, and third-party delivery — and each has different fee structures, different refund patterns, and different records. Book revenue by channel so you can see which one actually makes money after platform fees and shipping costs. Delivery-app sales that look strong on gross revenue often shrink dramatically once 15 to 30 percent platform fees come out.
Get sales tax right before your first online order
Michigan's 6 percent sales tax generally exempts food for home consumption, but prepared foods are taxable — and the line between the two is exactly where cottage food products live. A loaf of bread and a ready-to-eat sandwich are treated differently. The agriculture department's own guidance says cottage food businesses may need to collect and remit sales tax and points sellers to the Department of Treasury for product-by-product answers.
Do not guess. Confirm the taxability of your specific products with the Department of Treasury or a tax professional before you configure your online store, because every platform collects based on the settings you enter. Collecting too little leaves you owing the difference plus penalties; collecting on exempt food overcharges customers and creates refund headaches.
Treat it like a real business on your tax return
Cottage food income is self-employment income. Report it on Schedule C, pay quarterly estimated taxes once the business is profitable, and deduct ordinary business expenses: ingredients, packaging, market fees, website costs, delivery mileage, and the business portion of your home internet and phone. A dedicated bank account and a receipt-capture habit turn tax season from a shoebox excavation into a ten-minute export.
If your operation approaches the cap mid-year, you have a genuine growth decision: throttle back until January, raise prices, or step up to a licensed kitchen or commercial space. All three are legitimate — but "accidentally" exceeding the cap is not a strategy, because the exemption is what keeps you out of the licensing regime.
Common Mistakes That Could Cost You the Exemption
- Blowing past the cap without noticing. The old $25,000 ceiling trained producers to think small. Online sales can double revenue in a season. A running total is not optional anymore.
- Selling wholesale "just this once." Supplying a coffee shop, gift store, or restaurant — even a friend's — is wholesale, and it is prohibited under the exemption regardless of the dollar amount.
- Shipping out of state. One order to Ohio or Indiana falls outside the Michigan exemption. Set your store to reject non-Michigan shipping addresses.
- Skipping labels on direct orders. Website and mail-order customers need the same labels market shoppers get, including ingredients, allergens, and the disclaimer. Build labeling into your packing workflow, not as an afterthought.
- Ignoring local zoning. Your township's home-occupation rules did not change when state law did. Increased delivery traffic and commercial shipments from a residential address are exactly the kind of thing that draws neighbor complaints.
Your Action Checklist
- Confirm your products qualify as non-potentially-hazardous cottage foods.
- Decide whether your pricing puts you under the $50,000 or $75,000 cap, and start a running gross-sales total.
- Complete the voluntary registration if you want label privacy, and redesign labels with the registration number.
- Add a visible way for online customers to interact with you — chat, phone, or video link — on every storefront.
- Geo-fence online sales to Michigan and block wholesale and consignment requests in your terms.
- Verify sales-tax treatment of each product with the Department of Treasury or your accountant, then configure your store settings.
- Open a dedicated business bank account and book revenue by channel from day one.
Michigan's home food producers spent years advocating for these changes, and the payoff is real: twice the revenue ceiling, online sales, and privacy on your labels. The producers who benefit most will be the ones whose books are ready — because the freedom to sell more comes with the obligation to prove exactly how much you sold.
Keep Your Cottage Food Books Audit-Ready
As you scale from market table to online storefront, maintaining clear financial records is essential — your gross-sales total is now the number that protects your exemption. Beancount.io provides plain-text accounting that gives you complete transparency and control over your financial data, with per-channel revenue tracking you can verify line by line. Get started for free and see why developers and finance professionals are switching to plain-text accounting.
