How to Start a Bakery in Virginia: Home Bakery Rules After 2026-07-01, VDACS vs VDH and No $25,000 Cap

October 29, 2026

Starting a bakery in Virginia begins with one decision: will you sell from your home kitchen, from a permitted commercial kitchen, or from a storefront? Each path has different permits, agencies and limits, and mixing them up is the costliest mistake new bakers make. This guide covers all three and points you to the agency that sets each requirement.

The short version: a home baker making qualifying baked goods needs no permit, and since July 1, 2026, can sell online or by phone to individuals in Virginia. A home baker still cannot sell to coffee shops, stores or restaurants. Wholesale production and anything that needs temperature control belong in a permitted facility.

Materials and Information You Need

• A business name that meets SCC rules. An LLC name must include LLC, LC, limited company or limited liability company, and be distinguishable from names already on file.
• A federal Employer Identification Number (EIN), which the IRS issues online at no charge.
• A product list with full ingredients for every item, so you can disclose the nine major food allergens, including sesame, in writing.
• An equipment list and a simple floor plan, which health districts typically request for plan review. Confirm with your local health district.
• A Virginia Tax sales and use tax account, and access to the SCC Clerk's Information System (CIS) at cis.scc.virginia.gov.

Step 1: Choose Your Path

Path	Where you can sell	Permit or license	Agency
Home bakery	Online, by phone, at events, or by delivery to Virginia individuals for personal consumption	None under Va. Code 3.2-5130 C	VDACS may inspect after a complaint
Commercial kitchen	Wholesale to cafes and stores, or foods that need temperature control	Facility permit	VDACS or VDH, depending on the facility
Retail storefront	Walk-in customers, seating, prepared food and drinks	Facility permit, plus local certificate of occupancy and BPOL	Generally VDH, confirmed with your local health district and VDACS

Step 2: Form Your Business With the SCC

The State Corporation Commission (SCC) forms entities and registers assumed names. It issues no business license. File online at https://cis.scc.virginia.gov/ and read the guidance at https://www.scc.virginia.gov/businesses/.

1. Choose your entity. An LLC files Articles of Organization (Form LLC1011) for $100. A corporation files Articles of Incorporation (Form SCC619) for $75 and must also file annual reports.
2. Reserve your name if needed. A name reservation costs $10 and holds the name for 120 days. It can be renewed in the 45 days before it expires.
3. Appoint a registered agent. The agent must be a Virginia resident with a Virginia street address, available during business hours, and either a Virginia State Bar member or a member, manager, officer, trustee or general partner of the entity. An entity cannot be its own agent.
4. Decide on speed. Online LLC filings can be expedited: next day for $50 or $100 (submitted by 2:00 PM Eastern, response by 4:00 PM the next business day), or same day for $200 (submitted by 10:00 AM Eastern, response by 4:00 PM). Expedited service is online only and nonrefundable.
5. Calendar the annual fee. Virginia LLCs file no annual report. They pay a $50 annual registration fee due the last day of the 12th month after the month the LLC was organized, then every year. A late payment adds a $25 penalty, and the LLC is canceled at the end of the third month after the due date.
6. File an assumed name if you need one. Selling under a name other than your legal name requires an Assumed Name Certificate, filed with the SCC for $10. It is not filed with the circuit court and needs no newspaper publication.

Path 1: Home Bakery Under the Cottage Food Rules

Under Va. Code 3.2-5130 C 3, a Virginia resident may make qualifying foods in a private home without a permit, inspection or fee. Baked goods qualify when they do not need time or temperature control after preparation. The statute's list also covers candies, jams and jellies that are not low-acid, dried fruit, dry mixes, nuts, granola, roasted coffee and similar items.

Since July 1, 2026 (2026 Acts c. 605), these foods may be sold at any location, online or by phone to an individual in Virginia for personal consumption, and delivered in person, by mail or by delivery service. The statute sets no dollar cap on qualifying sales. The $25,000 limit in older guides is not in the law.

1. Confirm each product qualifies. Cakes with cream or custard fillings need temperature control and do not qualify. If a product must be refrigerated to stay safe, keep it out of the home program.
2. Print the statutory label. It must show your name as preparer, your physical address or post office box, your telephone number, the date processed, and the statement NOT FOR RESALE PROCESSED AND PREPARED WITHOUT STATE INSPECTION. The statute prescribes that statement, so do not shorten it or substitute a business label.
3. Set up your sales channel. Markets, events, online checkout and phone orders are all permitted. Buyers must be individuals in Virginia buying for personal consumption.
4. Check taxes separately. Section 3.2-5130 does not answer every tax question. Confirm your sales tax position with Virginia Tax at https://www.tax.virginia.gov/ before your first sale.

Home foods cannot be offered for use or sale in retail food establishments, so this path never covers coffee shops, stores or restaurants. VDACS may inspect after a complaint, and violating the section is a Class 1 misdemeanor. For the full cottage food rules, see the cottage food guide on this site.

Path 2: Commercial Kitchen for Wholesale and Temperature-Controlled Foods

If you supply cafes, sell to stores or make anything that needs temperature control, you must work in a permitted facility. Under Va. Code 3.2-5130 A, food manufacturers, food storage warehouses and retail food establishments are permitted by the VDACS Commissioner. Restaurants and food service are permitted by the Virginia Department of Health (VDH). A VDH permit does not let you wholesale to stores, so the agency question matters before you sign a lease.

1. Ask before you rent. Call your local health district and VDACS to learn which permit fits your products and sales plan.
2. Check the shared kitchen's permit. Ask whether the kitchen's permit covers wholesale production of your products, and whether you need a separate permit in your own name.
3. Confirm fees with the right agency. VDACS sets its own permit fees, so check with VDACS. The $40 plan review and $40 permit fees apply to VDH permits only.
4. Plan any build-out with licensed contractors. Virginia contractor license classes since July 1, 2025 are Class C for jobs over $1,000 to under $30,000, Class B for $30,000 to under $150,000, and Class A for $150,000 or more. Confirm a contractor's license with the Department of Professional and Occupational Regulation (DPOR).
5. Get the permit before you sell. Pass the facility inspection and hold the permit in writing before producing for sale.

Path 3: Retail Bakery Storefront

A storefront with seating, or one that serves prepared food and drinks, is generally handled as a VDH food establishment. Work backward from your opening date, because the sequence is fixed.

1. Submit plan review. Send plans to the local health department with the $40 plan review fee.
2. File the permit application. Submit the $40 permit application at least 30 days before opening.
3. Pass the health inspection. Have your Certified Food Protection Manager (CFPM) and allergen disclosures ready.
4. Get a certificate of occupancy from your locality, and a fire inspection of your ovens and hood system.
5. Obtain your local BPOL license if your locality levies one (see the next section).

Whether a retail bakery falls under VDH or VDACS depends on what you sell and where, so confirm with your local health district and VDACS.

Local License: BPOL Is Not Statewide

Virginia has no general statewide business license, and the SCC issues none. The local license is the Business, Professional and Occupational License (BPOL), a local license tax under Va. Code 58.1-3700 et seq. Each city or county administers its own, usually through the Commissioner of the Revenue, and sets its own rates and filing deadlines.

Not every locality levies one. Va. Code 58.1-3704 allows a locality to levy no general license. Stafford, Rockingham, Bedford County, Washington County, Montgomery County, Louisa and Fluvanna have no general county license, and towns can displace the county tax. Call your locality rather than assuming.

Population sets a floor on what a locality can require. A locality over 50,000 people cannot require a license on gross receipts under $100,000. A locality of 25,000 to 50,000 people cannot require one on gross receipts under $50,000. Below 25,000 people, no floor applies. Localities over 50,000 may waive the license up to $200,000 (verify the waiver ceiling with your Commissioner of the Revenue).

Food Safety, Staffing and Allergens

• CFPM. A food establishment needs a Certified Food Protection Manager among its supervisory staff, unless exempt under 12VAC5-421-55 B or Va. Code 35.1-25. Virginia has no statewide food handler card.
• New rules. Updated Virginia Food Regulations took effect September 10, 2026, including written disclosure of nine major food allergens, sesame among them. Bakeries should check every filling, glaze, topping and mix.
• Workers' compensation. Virginia requires coverage once you have three or more employees (Va. Code 65.2-101).
• Minimum wage. $12.77 in 2026, $13.75 in 2027 and $15.00 in 2028.

Taxes and Alcohol

The base sales tax is 5.3% (state plus local). Regional-tax localities charge 6%, eight localities 6.3%, and the Historic Triangle (James City County, Williamsburg and York County) 7%. Groceries carry a 1% rate. Prepared food sold for immediate consumption is taxable, and whether a specific bakery item counts as grocery food or prepared food is a Virginia Tax question. Ask before you set your price list.

A corporation pays a 6% flat corporate income tax. Owners of pass-through entities report on personal returns at Virginia's individual rates, which run from 2% to 5.75%. Confirm your structure with a certified public accountant.

A bakery cafe that serves beer or wine needs the ABC on-and-off premises wine and beer license, which costs $450 at the state level plus a local maximum of $150 in a city or $37.50 in a county or town. Spirits require a mixed beverage license. Check with ABC for current processing times.

Common Mistakes to Avoid

• Planning around a $25,000 home sales cap. Va. Code 3.2-5130 sets no dollar cap on qualifying home baked goods.
• Believing home sales can go to stores or restaurants. They cannot.
• Skipping online sales because you think they are banned. Since July 1, 2026, qualifying foods may be sold online or by phone to individuals in Virginia.
• Using a shortened label. The statute prescribes the statement.
• Mixing up the agencies. A VDH permit does not lift home sales limits or allow wholesale to stores.
• Putting cream or custard fillings under the home rules.
• Assuming another locality's BPOL rate or filing deadline applies to yours.
• Scheduling a storefront opening without filing the VDH permit application at least 30 days ahead.

What Results to Expect

A home bakery that follows the statute may be able to sell to Virginia individuals online, by phone or in person, with the required label and no state permit. A commercial or storefront bakery usually takes longer, because plan review, permitting, inspection and local licensing run in sequence. Your timing depends on your product, your locality and each agency's review. Nothing in this guide promises approval, a specific timeline or income.

Next Steps

Start with the agency for your path: the SCC for your entity and assumed name, Virginia Tax for sales tax, your Commissioner of the Revenue for BPOL, and your local health district with VDACS for any kitchen or storefront. The Virginia Small Business Development Center network at https://www.virginiasbdc.org/ can help with planning.

This article is general information, not legal, tax or licensing advice. Requirements, fees and deadlines change, so confirm each one with the agency named before you act. For complex situations, including entity choice, lease terms and tax treatment, consult a qualified Virginia attorney or certified public accountant.