Exemptions · 21 CFR 1.1305

Are you exempt? The thresholds and carve-outs

The exemptions live in one section, 21 CFR 1.1305. The two figures people confuse most are the $25,000 small-farm test and the $250,000 retail and restaurant test. They are not the same test, and they apply to different businesses.

Before you map any records, it is worth checking whether an exemption applies, because a full exemption takes you out of the recordkeeping entirely, and a partial one changes what you have to keep. All of the following are in 21 CFR 1.1305.

The two dollar thresholds, kept straight

Small produce farms: $25,000 1.1305(a)(1)

A produce farm with an average annual monetary value of produce sales of no more than $25,000, measured on a rolling basis and adjusted for inflation from a 2020 baseline, is exempt. The same $25,000 threshold applies to other raw agricultural commodity producers under 1.1305(a)(3). This is a farm-level test about produce sales.

Small retail and restaurants: $250,000 1.1305(i)

A retail food establishment or restaurant with an average annual monetary value of food sold or provided during the previous 3-year period of no more than $250,000, on a rolling basis and inflation-adjusted, is exempt. This is a very different business and a very different number from the farm test, and mixing the two up is the most common mistake we see. If you are a restaurant, the figure you care about is $250,000, not $25,000.

Farm and process carve-outs

Small shell-egg producers 1.1305(a)(2): a farm with fewer than 3,000 laying hens at that farm.
Direct-to-consumer farm sales 1.1305(b): food produced, and if applicable packaged, on the farm and sold or donated directly to a consumer.
Farm-packaged foods 1.1305(c): where packaging maintains product integrity and carries the farm's name, complete address, and business phone number.
Kill step or certain commercial processing 1.1305(d): produce that receives commercial processing that adequately reduces microorganisms of public-health significance; foods that undergo a kill step where the receipt and application records are kept; and foods changed so they are no longer an FTL food.
Produce rarely consumed raw 1.1305(e): the commodities listed in 21 CFR 112.2(a)(1).
Foods under USDA jurisdiction 1.1305(g): during the time the food is within USDA's exclusive jurisdiction.

Role carve-outs

Transporters 1.1305(n): a person is exempt with respect to transporting food.
Fishing vessels 1.1305(m): the owner, operator, or agent is exempt with respect to the food until it is sold.
Farm-to-school and farm-to-institution 1.1305(l): with 180-day source documentation.
Nonprofit food establishments 1.1305(o) and personal consumption 1.1305(p).

Two things to watch

First, several exemptions are partial or conditional. The kill-step exemption, for instance, can require you to keep specific receipt and application records. Being "exempt" is not always the same as keeping nothing. Second, an exemption depends on your own numbers and your own process, which change over time. A farm that grows past the $25,000 line, or a restaurant past $250,000, loses the exemption, so document the basis and re-check it.

Because the thresholds are inflation-adjusted from a 2020 baseline, FDA may publish updated figures. We re-verify the thresholds annually and stamp the check date. Treat the nominal figures here as current as at the date on this page, and confirm before you rely on them.

Think you might be exempt? The free scope check flags the exemption that fits and cites the subsection, and the report confirms the determination and sets out what to keep on file. Get my report →