I found this site kinda helpful with regards to ARizona Permits and when they are required.

http://www.maricopa.gov/envsvc/envhlth/fdwkr/docs/SchoolFood.pdf

Still looking more as to what we need to do to work out of the home. If anyone else knows, please tell!!!

Hi Gina!
I have not called to ask about home businesses but from others that have I have been told it isn't possible. I have been wondering if it would be possible if the building were seperate but like I said I have not called yet. I do have a business though and this is how I do it. I rent a legal kitchen where I bake everything. The baking is what they are worried about as it is open eggs etc. Then I am able to legally decorate the cakes at home. The place I rent from called the health dept to double check that for me too. So that is how I do it and it is legal. You have to have a dba which from what I understand is the trade name form.. So I have that and I had to geta food handlers card as well. Oh and I also have insurance.
HTH!