I am curious if there are any legal issues with selling cakes, cupcakes or fillings made with alcohol. Considering champagne cake is a popular one and most recipes use real champagne, are there any business or legal issues to address?

I assume you wouldn't need a liquor license but do you have to disclose the percentage of alcohol? For example 1 cup of champagne in the batter . This is a significantly higher percentage than vanilla extract and some of it cooks off. 4 tablespoons of champagne in the frosting...nothing gets baked off in that case. Just wondering if I'm over analyzing this.

I have never heard of it being a problem at all. I think you'd be puking cake long before buzzing on alcohol

I'm not worried about getting anyone drunk I'm just curious what the legal issues if any are involved in using alcohol in the cakes. I'm in Texas so I'm not a business yet but we have a cottage food bill in the house and I've seriously considered renting a commercial kitchen so I'm starting to do more research on the business side of things.

The laws vary from state to state, I'd recommend contacting the TABC for the official word on requirements for liquor licensing in TX:
http://www.tabc.state.tx.us/

So far I have not had that be an issue.

An interesting side note:

I watched an certain episode of Foodology awhile ago (I even recorded it and saved it).

Alcohol does not dissipate as we thought when baked, cooked or sauteed. In fact, when sauteed it barely burns off at all. But they also baked some in a dessert. It had 1 cup of wine added. After baking, it still had the content of 1/2 cup of the wine. This was very interesting and contrary to everything I was ever taught.

So I would not be surprised if the ATF people cared. But so far so good.

I saw that same episode and it really freaked me out.

Total opposite of anything I was ever told.

Yeah, me too. I thought of all the things I let the kids eat growing up that had wine cooked in it. LOL - I guess I'm lucky they are not alcoholics!

But then again, we're hard core Italian - I was raised with a glass of wine at most dinners, from a very young age. It may or may not have dissuaded me - but I really thought I was withholding wine from them until grown, which was my intention.

Listen carefully to the wording of those statistics. Most refer to the amount of spirit, the drink, that is left behind. The alcohol burns faster than the non-alcohol portion of the spirit, leaving the remaining spirit with a lower alcohol content than where it started. Also, vanilla extract is 35% alcohol per the FDA. That is 70 proof. Liqueur is usually 20% and wine is less than that. You can do the math to find how much alcohol you actually have compared to the extract. You can also divide the remaining alcohol content by the number of servings to determine how much is in each serving. Even a cup of wine, baked, is still divided by 12 to 24 servings.

Thanks everyone. I guess when (yes I'm being optimistic) the cottage food law passes, I will contact the TABC and make sure everything is OK I can't imagine it's an issue considering the number of restaurants that cook and bake with wine but I fall under the highly paranoid category.