How to Open a Hair Salon in Minnesota: Salon License, Practitioner Licenses and the Booth-Rent Penalty

Opening a hair salon in Minnesota means running two sets of paperwork side by side. The first is business formation with the Secretary of State and tax registration with the Department of Revenue. The second is licensing with the Minnesota Board of Cosmetologist Examiners, which licenses the salon and every person who works in it. Most first-time owners underestimate the second set, and that is where delays and fines usually come from. This guide covers how to start a cosmetology salon business in Minnesota in the order that avoids the most common problems.

Disclaimer: This article is informational content, not legal or tax advice. Fees, rules and agency practices change. Confirm every figure with the agency named before you file or pay, and talk to a qualified attorney and CPA before you sign a lease, a booth rental agreement or a contract with stylists.

What You Need Before You Start

Gather these items before you file anything or sign a lease:

• A Minnesota street address for the salon. Zoning depends on the address, so check it before you commit to a space.
• A business name checked against Secretary of State records. A name reservation costs $55 and holds the name for 12 months, renewable in 12-month periods.
• Your entity choice and its filing fee. An LLC files Articles of Organization ($155 online or in person, $135 by mail). A corporation files Articles of Incorporation ($155).
• A registered office: a Minnesota street address. A PO box alone is not accepted.
• Training transcripts for every person who will work in the salon, showing hours completed.
• A floor plan showing the salon room, each station, sinks, storage and any shared space.
• A budget that covers the license fees, the build-out, and several months of rent before your chair schedule fills.

Step 1: Confirm the Training Hours for Each Role

Minnesota licenses people by the work they do, so the hours you need depend on the license category. The training hours set by Minn. R. 2105.0145 are:

• 1,550 hours for a cosmetologist
• 600 hours for an esthetician
• 350 hours for a nail technician
• 14 hours for an eyelash technician

The hour requirement and exam steps for a hair technician are not listed here. Confirm both with the Board of Cosmetologist Examiners before you hire or enroll anyone. Ask the board whether it accepts your staff's school hours and whether it recognizes any out-of-state training or license. The board's current contact details are on the state's directory at mn.gov. Do not rely on a stylist's word for their hours. Ask for the school's transcript.

Step 2: Form the Business With the Secretary of State

Forming the entity is a filing, not a license. Minnesota has no general statewide business license, and filing with the Secretary of State does not authorize anyone to cut hair. You still need the entity in place before you open a business bank account or sign a lease in its name.

For an LLC, file Articles of Organization under Minn. Stat. chapter 322C through the Business Filings Online portal at mblsportal.sos.mn.gov. Your name must contain “limited liability company” or “LLC” and may not contain “corporation” or “incorporated” or their abbreviations. It must also be distinguishable from every domestic LLC, LLP, corporation and limited partnership on file in Minnesota. Online and in-person filings cost $155 and are treated as expedited. Mail filings cost $135 and are not expedited. The Secretary of State does not publish a guaranteed turnaround in business days, so do not promise a landlord or stylist an opening date until the filing is accepted.

An LLC needs no publication. Its annual renewal costs $0 and is due December 31 every year. If you miss it, the LLC is terminated without further notice, and reinstatement costs $65 by mail or $85 online or in person.

Entity choice affects taxes, so ask a CPA before you pick one. Minnesota has no separate LLC franchise tax. An LLC taxed as a partnership or disregarded entity passes income through to its owners, who pay individual income tax at 5.35 to 9.85 percent. An LLC that files federally as a C corporation pays the 9.8 percent corporation franchise tax. A minimum fee under Minn. Stat. 290.0922 applies to C corporations, S corporations and partnerships. Single-member LLCs that report only on the owner's individual return are exempt. For 2026, the minimum fee is $0 below $1,280,000 of Minnesota property, payroll and sales, and rises in brackets from there.

Step 3: Choose the Location and Check Zoning

Minnesota has 87 counties, about 853 cities and about 1,780 townships. Your address determines which unit of government controls zoning and any local license: a city, a township or a county. Call the zoning office before you sign a lease. Ask whether a hair salon is a permitted use in that zone, what parking it requires and whether it needs a certificate of occupancy for your build-out.

Minnesota issues no general business license. Cities license by category, so ask what category covers a personal services business in your city and what that license costs. Minneapolis and St. Paul also license by category, and neither issues a general business license. License Minnesota at mn.gov/elicense lets you browse licenses by topic, by agency or through an A to Z index, which is a useful cross-check against what your city tells you.

Home salons need extra care. A salon cannot be located in a room used for residential purposes. A salon in a home must be completely partitioned from the living quarters under Minn. Stat. 155A.29, subd. 3a. A partition that looks finished is not enough. Confirm the layout with the board and your city before you buy equipment.

Step 4: Apply for the Salon License

The Board of Cosmetologist Examiners licenses salons and practitioners on a three-year cycle under Minn. Stat. 155A.25. The salon license costs $350 initially and $225 to renew. The board inspects salons, and an expired salon found on inspection can be fined up to $500. Renewal is a calendar item, not a reminder you can afford to miss.

Before you apply, confirm three things with the board: the current application method, the documents it wants with the application, and whether it needs to see your floor plan before it issues the license. Do not advertise services, take bookings or accept payment for services until the salon license is in hand.

Some salon activity falls outside a standard salon license. A homebound service permit costs $50 for three years. A special event permit costs $75 per year. Ask the board whether your plans need either one.

Step 5: License Every Practitioner

Each person who performs services needs their own practitioner license. Initial practitioner licenses cost $195. Renewals cost $115, and manager or instructor renewals cost $145. Confirm with the board whether a manager or instructor role at your salon needs a separate license category before you assign titles on your staff roster.

Build a license tracker with one row per person: category, license number, issue date, renewal date and the document you filed. A salon license cannot protect you from an operator whose license has lapsed. Your inspection will focus on the people working at the chairs, so keep copies in the salon and in your office.

Step 6: Decide How Stylists Will Work, and Avoid the Booth-Rent Penalty

This is the step most new owners get wrong. Many salons want to rent chairs to stylists who run their own books. The Board of Cosmetologist Examiners can fine an owner or manager up to $200 for allowing an operator to work as an independent contractor, and it can fine the operator up to $100. The fines are modest. The larger risk is a structure you have to unwind after your stylists have built clients on it.

Two models are common. In the employee model, you pay wages, withhold taxes and carry the payroll obligations that come with employees. In a booth rental model, the stylist pays a fee for the chair and works as an independent contractor. The board's penalty language shows that the second model needs careful review, and whether your specific arrangement is allowed is a question for a lawyer, not this article. Do not describe any arrangement as “just rent” in a contract until counsel has reviewed how the work is controlled, scheduled and paid.

If you choose employees, confirm your payroll registration and withholding obligations with the Department of Revenue. Your CPA can model whether the employee or contractor route makes more sense for your pricing and staffing plan.

Step 7: Register for Taxes Before Your First Taxable Sale

Register with the Minnesota Department of Revenue for a Minnesota Tax ID and a Sales and Use Tax account before you make any taxable sale. The new business registration form is at the Revenue e-services page, and the agency's main site is revenue.state.mn.us.

The state sales tax rate is 6.875 percent, and local taxes are added on top. Retail products you sell, such as shampoo or styling tools, are the most common taxable sales in a salon. Ask Revenue which of your services and products are taxable before you set prices, rather than assuming every line on your menu is treated the same way.

Step 8: File an Assumed Name if You Will Use a DBA

If you will operate as “Maple Street Hair Studio” while your legal name is “Maple Street Hair LLC,” you need a Certificate of Assumed Name. This is filed only with the Secretary of State, Business Services, under Minn. Stat. chapter 333. It costs $50 online or in person and $30 by mail. After filing, the certificate must be published for two consecutive issues in the legal notices section of a qualified legal newspaper in the county of your principal place of business. Failure to publish may render the certificate invalid. Get a quote from the newspaper before you budget for publication, because the state filing fee does not include that cost. The certificate must be renewed annually at no charge. The filing page is at sos.mn.gov.

Step 9: Build Your Renewal Calendar

Set up calendar reminders for every deadline the day your licenses are issued. The table below lists the items covered in this guide.

Item	Fee	Timing or rule
LLC Articles of Organization	$155 online or in person; $135 by mail	One-time filing
Corporation Articles of Incorporation	$155	One-time filing
Name reservation	$55	12 months, renewable
LLC or corporation annual renewal	$0	Due December 31 each year
LLC reinstatement	$65 by mail; $85 online or in person	After missing December 31
Corporation reinstatement	$65 by mail; $85 online or in person	After missing December 31
Assumed name (DBA)	$50 online or in person; $30 by mail	Renew annually at no charge; publish two consecutive issues
Salon license, initial	$350	Three-year cycle
Salon license, renewal	$225	Three-year cycle
Practitioner license, initial	$195	Three-year cycle
Practitioner license, renewal	$115	Three-year cycle
Manager or instructor renewal	$145	Three-year cycle
Homebound service permit	$50	Three years
Special event permit	$75	Per year
Sales tax rate	6.875 percent plus local tax	Applies to taxable sales

Common Mistakes to Avoid

• Signing a lease before the zoning check. A space that works for a salon on paper can fail on parking, signage or a use restriction.
• Opening a home salon in a shared room. A salon cannot sit in a room used for residential purposes, and a home salon must be completely partitioned from the living quarters.
• Assuming a booth rental contract is safe because it is common. The board can fine both the owner and the operator, and an unreviewed structure may need rebuilding.
• Letting a practitioner license lapse. Track every renewal date, because an operator without a current license is a problem for the whole salon.
• Treating the Secretary of State filing as the license. The entity filing lets you contract, bank and pay taxes. It does not authorize services.
• Skipping the DBA publication. A certificate that is not published may be invalid, which can undo the name you were using on your signage and booking page.
• Guessing the hair technician requirements. Confirm the hour and exam steps with the board before you hire.

Tips That Save Time

• File the entity first, then the DBA, then the salon and practitioner applications. Each step depends on the one before it.
• Ask your city and the board the same question about the floor plan in writing, so you have one answer on record.
• Keep one folder with filing receipts, license numbers, renewal dates and the name of each agency contact you spoke with.
• Use the Minnesota Small Business Development Center Network, administered by DEED, at mn.gov/deed/business/help/sbdc for free advising before you sign a lease. The SBA district office for Minnesota is listed at sba.gov/district/minnesota.
• Ask a CPA to review your entity choice and your stylist pay model together, because the two decisions affect each other.

Expected Results and Timeline

A licensed salon is a business that has cleared the state's requirements for opening. It is not a promise of client volume, revenue or any particular outcome for the people who visit. Services are cosmetic, and nothing in this guide is a claim about treating or changing a client's health or condition. Owners who file in the right order and confirm each requirement in writing usually avoid the rework that delays openings. Many owners find the calendar of filings, inspections and renewals takes more ongoing attention than the build-out itself.

Because the Secretary of State does not publish a guaranteed processing time, and the board's timing depends on the application you file, build a buffer into your lease start date and your payroll start date. Expect that a clean application may move faster than a file that needs follow-up, and plan for that difference rather than guessing.

Get Qualified Help

A salon combines entity law, lease terms, licensing, employment and tax questions. A qualified attorney should review your lease, your stylist contracts and any booth rental arrangement. A CPA should review your entity choice, your payroll plan and your sales tax setup. Bring this checklist and the agency's written answers to that first meeting. It will save billable time and keep your opening on track.

This article is informational content, not legal or tax advice. Confirm current fees and requirements with the agency named before you act.