I am currently a hobby baker but this is starting to cost me dearly..... but i keep having family and friends come to me asking for cakes and they want to pay me for it but i cannot accept them (at least not that i know of)

Is there a law in Wisconsin against making cakes and selling them out of my home?

It would be best to start with your local health department or dept. of agriculture.

For some links check out the Business Forum here on CC there is a sticky at the top of the forums about states that license home bakeries. In the first post there is an attachment that should have some good starting info fo ryou.

My Wilton instructor lives in Wisconsin. She ended up renting a kitchen space from another business and she outfitted it so that it met code. I'm pretty sure you have to have a 3-basin sink with a back flow preventer. I'm sure there are other things you have to comply with.
Your local building department may be able to help you too.

You can check out the DATCP website for Wisconsin. They have the guidelines on there. I have a licensed kitchen out of our home in Waupaca. It has to be closed off or separate from the rest of the house.