How to Start a Resort in Minnesota: MDH Resort License for Lake Cabins

If you plan to rent lake cabins in Minnesota, the state treats your property as a resort, and that brings the Minnesota Department of Health (MDH) into the picture. This guide covers how to start a resort business in Minnesota in the order that saves the most rework: confirm the property qualifies, set up the business entity and tax accounts, get plans reviewed, apply for the annual resort license, then handle county, city and activity-specific rules. Where a figure is not confirmed, we say so and name the agency to check.

Informational content, not legal or tax advice. This article explains how the process generally works in Minnesota. It does not replace advice from a Minnesota attorney or a CPA. Zoning, shoreland, septic, lodging tax and licensing questions depend on your specific parcel and plans.

What Counts as a Resort in Minnesota

Minnesota defines a resort in Minn. Stat. 157.15, subd. 11. A resort is a building or property on or near a lake, stream, skiing or hunting area, or other recreational area. It is held out as sleeping accommodations for people seeking recreation for a day, a week or longer, and it has five or more cottages, rooms or enclosures for rent.

Three parts of that definition decide most cases:

• The unit count. Five is the threshold. Count every rentable cabin, room and enclosure, including camper cabins and bunkhouses, which fall under the same license. With fewer than five units, the property does not meet this definition, so ask MDH how it would be treated before you buy.
• The location. The property must sit on or near a lake, stream or recreational area. A cabin cluster in a town with no recreational draw raises a different question.
• The offering. The units must be held out as sleeping accommodations for recreation. That is what makes the property a resort under the statute.

Materials and Information to Gather First

Pull these together before you contact any agency. Most delays in resort projects come from missing unit counts and unanswered land-use questions.

• A unit count and a simple site plan showing each cabin, lake or stream frontage, parking, and where the well, septic system and any water or sewer lines run.
• Written zoning and shoreland answers from the county, plus the city or township if the parcel is inside one. Keep every letter or email.
• Well and septic records, including the design and any inspection report for the existing system.
• Plans for any new construction or remodel, drawn to show every unit, because MDH plan review fees depend on cabin count.
• A list of optional features: pools, spas, private water or sewer, and any food service. Each one adds a license category.
• A proposed business name, checked against Secretary of State records.
• A federal Employer Identification Number (EIN) from the IRS, if your entity or payroll needs one.
• Insurance quotes for the property and liability coverage from a Minnesota agent.

Step-by-Step: Starting a Minnesota Resort

Step 1: Confirm the property qualifies

Start with the unit count and location from the section above. If you are buying, make the purchase agreement contingent on the zoning and septic answers from Step 2. A parcel that cannot legally host guests is an expensive mistake, and it is far easier to walk away before closing.

Step 2: Check zoning, shoreland and septic with the county

Minnesota has 87 counties, about 853 cities and about 1,780 townships. Each can set its own land use rules, so the answer for your parcel comes from the local office, not a statewide rule. Ask four questions in writing: whether commercial lodging is allowed on the parcel, what the shoreland standards require for the lot, whether the septic system can handle your planned guest count, and whether setback or density limits apply to adding cabins. Shoreland standards come from the Department of Natural Resources (DNR) and are applied through local ordinances, so the county is the right first call.

Step 3: Form the business entity

Most resort owners use a limited liability company (LLC) or a corporation. Filing with the Secretary of State is a filing, not a license, so you still need the licenses in Steps 7 to 9.

• LLC: File Articles of Organization under Minn. Stat. chapter 322C. The fee is $155 online or in person, which is the expedited price, or $135 by mail, which is not expedited. The name must include “limited liability company” or “LLC,” may not include “corporation” or “incorporated,” and must be distinguishable from every domestic LLC, LLP, corporation and limited partnership on record.
• Corporation: File Articles of Incorporation under Minn. Stat. chapter 302A. The filing fee is $155.

Neither formation requires a published notice. Both need an Annual Renewal, which costs $0 but must be filed by December 31 every year. Missing it can end an LLC through termination, or dissolve a corporation, without further notice. Put the date on the calendar the day you form.

Minnesota requires a registered office at a Minnesota street address. A PO box alone is not accepted, and the office does not have to be where the resort operates. A registered agent is optional for a Minnesota entity. If you need time to settle the name, a name reservation costs $55 and lasts 12 months, renewable in 12 month periods.

Tax treatment is a separate decision. An LLC taxed as a partnership or disregarded entity passes income 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, while a single member LLC that reports only on the owner’s individual return is exempt. Ask a CPA before you choose.

Step 4: File an assumed name if you will trade under another name

If the resort will operate under a name other than the legal entity name, such as “Loon Bay Cabins” for “Loon Bay Holdings LLC,” file a Certificate of Assumed Name (DBA) with the Secretary of State’s Business Services office. The fee is $50 online or in person, or $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. The certificate must be renewed each year at no charge. The newspaper’s charge is not set by the state, so ask the newspaper for its rate. Publication applies to DBAs only, not to LLC or corporation formation.

Step 5: Register with the Department of Revenue

Revenue registration is not a license, but you must complete it before making taxable sales. Lodging rentals are taxable. Register for a Minnesota Tax ID and a Sales and Use Tax account through Revenue’s new business registration. The state sales tax rate is 6.875 percent, and local lodging taxes apply on top in some areas. As of Revenue’s July 2026 list, those areas include Lake County, Lake of the Woods County, the Lake Vermilion area, Grand Rapids, Two Harbors and Giants Ridge. Confirm the current list, and whether your parcel falls inside a listed area, before you set nightly rates.

Step 6: Get plans reviewed before you build

New cabins and remodels go through MDH plan review. For new construction, the fee is $400 for fewer than five cabins, $450 for five to nine, and $500 for ten or more. For remodels, the fees are $300, $400 and $450 at the same thresholds. Do not start construction until you have confirmed with MDH what review it requires and how long it takes. This guide does not state an MDH processing time.

Step 7: Apply for the annual MDH resort license

MDH licenses resorts every year under Minn. Stat. 157.16. The base fee is $300, plus $15 per unit with the per-unit charge capped at $1,500. Every license also carries a $50 statewide hospitality fee and a $5 technology fee. A five-unit resort therefore pays $430 ($300 base, $75 for units, $50 hospitality, $5 technology). A 20-unit resort pays $655. Add-on categories cost extra:

• Pools: $455 for the first pool.
• Spa: $300.
• Private water or sewer: $85.
• Food service: a category applies, but this guide does not state its fee. Check with MDH before you plan a restaurant or serving program.

Camper cabins and bunkhouses fall under the same license, so count them in your unit total. Budget for the license every year, not just the first.

Step 8: Check activity-specific state licenses

Minnesota has no general statewide business license. Licenses are issued by agency and by activity. Search the License Minnesota site at mn.gov/elicense by topic, agency or A to Z index. Items that often come up for resorts include:

• Liquor: The Alcohol and Gambling Enforcement Division licenses alcohol sales. A resort bar or bottle sales to guests need a separate liquor license, so check with the Alcohol and Gambling Enforcement Division and your city or county.
• Trades: The Department of Labor and Industry (DLI) licenses certain trades. Confirm whether the contractors who build or repair your cabins must hold a DLI license.
• Child programs: The Department of Children, Youth, and Families (DCYF) oversees certain child care and youth programs. Confirm before you offer a kids’ camp or day program.
• Roads and vehicles: MnDOT controls state highway access and signage. If you operate guest shuttles or rental vehicles, check the Driver and Vehicle Services (DVS) requirements.

Step 9: Get city, township and county permits

Local requirements sit on top of the state license. Minneapolis and Saint Paul license by category, and neither issues a general business license. Other cities, townships and counties may require their own lodging, food or signage permits. Ask the local office for every permit tied to lodging and guest services, and get the answers in writing.

Step 10: Set up your annual calendar

• December 31: Secretary of State Annual Renewal for your LLC or corporation, at no fee.
• Every year: MDH resort license renewal, plus any add-on categories you hold.
• Every year: DBA renewal at no charge, if you filed one.
• On Revenue’s schedule: sales tax filings and any local lodging tax returns for your area.

Common Mistakes to Avoid

• Treating the Secretary of State filing as a license. The filing creates your entity. It does not authorize you to host guests.
• Undercounting units. Leaving out camper cabins or bunkhouses lowers the fee estimate and can put the property on the wrong side of the five-unit line.
• Assuming the MDH license covers food, pools or spas. Each adds its own category and fee.
• Building before plan review is settled. Confirm the MDH sequence first.
• Using a PO box as the registered office. A Minnesota street address is required.
• Skipping DBA publication. A DBA that is not published may be invalid.
• Collecting rental income before registering with Revenue. Register before your first taxable sale.
• Missing the December 31 renewal. Put it on the calendar the day you form the entity.
• Buying before checking shoreland and septic. Get the county’s written answers first.

Cost Summary

Item	Fee	Agency
Articles of Organization (LLC)	$155 online or in person; $135 by mail	Secretary of State
Articles of Incorporation	$155	Secretary of State
Name reservation	$55 for 12 months	Secretary of State
Assumed name (DBA)	$50 online or in person; $30 by mail, plus newspaper publication	Secretary of State
Annual Renewal	$0, due December 31	Secretary of State
Plan review, new construction	$400 (fewer than five cabins); $450 (five to nine); $500 (ten or more)	MDH
Plan review, remodel	$300; $400; $450 at the same thresholds	MDH
Resort license (annual)	$300 base, plus $15 per unit (capped at $1,500), $50 hospitality fee, $5 technology fee	MDH
Pool	$455 for the first pool	MDH
Spa	$300	MDH
Private water or sewer	$85	MDH
Food service	Confirm with MDH	MDH
Sales and lodging tax	State rate 6.875 percent, plus local lodging taxes in listed areas	Department of Revenue

What to Expect

Timelines depend on the parcel, whether you build, and how quickly the county responds. The Secretary of State does not publish a guaranteed turnaround in business days. Online and in-person filings are processed as expedited service, which is what the higher $155 fee pays for, and mail filings are processed without expediting. This guide does not state an MDH processing time, so ask MDH for one before you set an opening date.

Owners who finish the entity, tax registration and plan review steps before applying for the resort license may find the rest of the process easier to manage, because each step gives the next one its inputs. Outcomes still depend on your property, your plans and how each agency reviews them.

Tips for a Smoother Start

• Keep one spreadsheet of unit counts. It drives the MDH license fee, plan review fee and the five-unit test.
• Get the county’s zoning and shoreland answers in writing before you sign a purchase agreement.
• Use the online or in-person Secretary of State filing if timing matters. The fee difference is $20.
• Use the Minnesota Small Business Development Center Network for planning help, at mn.gov/deed/business/help/sbdc.

When to Get Professional Help

Hire a Minnesota attorney for the entity setup, the purchase agreement and any zoning or shoreland dispute. Hire a CPA for the LLC tax election and for lodging tax setup. Both matter more than the filing fees. This article is informational, not legal or tax advice, and the rules described can change.

Official Resources

• Minnesota Secretary of State: sos.mn.gov
• Business Filings Online (Minnesota Business and Lien System): mblsportal.sos.mn.gov/Business/Search
• Assumed name (DBA) filing: sos.mn.gov assumed name page
• Minnesota Department of Revenue: revenue.state.mn.us
• Revenue new business registration: mndor.state.mn.us new business registration
• License Minnesota: mn.gov/elicense
• Minnesota Small Business Development Center Network: mn.gov/deed/business/help/sbdc
• SBA Minnesota district: sba.gov/district/minnesota