Dept of Health regulates restaurants and food carts. My license is through the Dept of Agriculture. Different AHJ's.
Cookies are considered "low risk" foods and have been allowed as cottage industry goods for decades. From the WA state Cottage Industry Rules-
- Baked good products that are cooked in an oven are allowed, including:
- Loaf breads, rolls, biscuits, quick breads and muffins;
- Cakes including celebration cakes such as birthday, anniversary, and wedding cakes
Sweet breads made with fresh fruit or vegetables are allowed as long as the fruit or vegetables are incorporated into the batter and oven-baked.
- All frostings or glazes must have a cook step or be made with ingredients (such as a large amount of sugar) that when combined are stable at room temperature and won’t spoil.
[*]Pastries and scones
[*]Donuts or other fried products are not allowed.
[*]Cookies and bars
[*]Cereals, trail mixes and granola;
[*]Candies and confections that are cooked in an oven
[*]Pies, except custard style pies, pies with fresh fruit that are unbaked or pies that require refrigeration after baking;
[*]Nuts and nut mixes; and
- Standardized jams, jellies, preserves and fruit butters as identified under 21 C.F.R 150.
- Recombining of packaging of dry herbs, seasoning and mixtures that are obtained from approve sources.
- Including bread mixes, soup mixes and dip mixes.
Prohibited Products (WAC 16-149-130)
- Vinegar and flavored vinegars
This is not all inclusive but provides most of the types of prohibited cottage food products.
- This section lists unacceptable cottage food products. Although not inclusive, it lists most types of unapproved cottage food products:
Fresh or dried meat or meat products including jerky;
- Fresh or dried poultry or poultry products;
- Canned fruits, vegetables, vegetable butters, salsas, etc.;
- Fish or shellfish products;
- Canned pickled products such as corn relish, pickles, 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 or cream cheese fillings, fresh fruit fillings or garnishes, glazes or frostings with low sugar content, cream, or uncooked eggs;
- Tempered or molded chocolate or chocolate type products;
- Milk and dairy products including hard, soft and cottage cheeses and yogurt;
- Cut fresh fruits or vegetables;
- Food products made from cut fresh fruits or vegetables;
- Food products made with cooked vegetable products;
- Garlic in oil mixtures;
- Juices made from fresh fruits or vegetables;
- Ice or ice products;
- Barbeque sauces, ketchups, or mustards;
- Focaccia-style breads with vegetables or cheeses.
Your state might be different, but in WA state, most of my hot sauces would not be allowed, all of Lucky Dog's would not be allowed, and I'm guessing most other peoples hot sauces would not be allowed. Dried pepper powders would not be allowed under cottage industry laws.
Regarding ajdrew's building dilema-
You may be able to get a septic exemption to install a grey water only system. When we installed the kitchen, we installed a new septic system. We couldn't access the domestic tank, and we just thought it would be good to have if we ever had to put a trailer out there for aging parents or something.
My kitchen is in a separate building without a bathroom. This limits who can use the kitchen. Basically, since I can use my house bathroom, only family members can work in the kitchen. If someone else wanted to rent the kitchen, I would have to have some type of bathroom other than our family bathroom available for them. We do have a toilet right inside the back door, so if the back hall could be closed off from the rest of the house, that would qualify. Or I could have a porta-potty on-site (yea...not going there...but it would work...)
the conditions for having a processing kitchen in a house are-
has to have it's own outside entrance.
must be able to be closed off from the rest of the house
And the usual-
tested water supply
sinks/refrigeration as needed for the operation.
I don't think they inspect the rest of the house unless the place looks like a dump with obvious risk factors. If the place is clean and tidy, they will inspect the kitchen/processing area, make sure no pests can get in, it's of good construction, etc., off you go. But that would be a question to ask your AHJ.