How to Start a Hair Salon in Alabama

Who licenses hair salons in Alabama

Hair salons answer to the Alabama Board of Cosmetology and Barbering, a single board that licenses both cosmetology and barbering under Title 34 Chapter 7B of the Code of Alabama and Chapter 250-X of the Administrative Code. The board licenses cosmetologists, Class 2 barbers, estheticians, manicurists and combination credentials, registers eyebrow threaders, and licenses the premises themselves as shops and schools. That structure is this guide's structure, because Alabama licenses the person and the room in the same office, on different calendars and at different fees.

The board also inspects shops and enforces the practice rules in Chapter 250-X-3, which set the boundary every Alabama practitioner works inside: licensed services are non invasive work on the epidermis, specifically the stratum corneum, and no licensee may practice photo rejuvenation, permanent makeup, electrolysis or tattooing. Two other agencies appear later in this guide on their own tracks: the Department of Revenue, which runs sales tax, the Business Privilege Tax and the Title 40 privilege license system, and the county probate office, which is where the privilege license is actually bought.

Alabama hair salon at a glance

The cosmetologist license, step by step

The cosmetologist license is Alabama's broad practitioner credential, covering hair, skin and nail services under Chapter 7B. Section 34-7B-18 sets the route: be at least 16, complete 10 grades of education, and finish either 1,500 hours of training at a licensed school or 3,000 hours as an apprentice under a licensed cosmetologist. The apprentice permit itself costs $75 on the board's fee schedule, and changing an apprentice arrangement costs $25. Either route ends at the same examination door.

The board has contracted with PSI Services to run the national barber and cosmetology testing program for Alabama. The written examination costs $75 and the practical examination costs $130, each charged again on a reexam, and the passing score is at least 70 percent. Rule 250-X-6-.01 gives a candidate 24 months from the original examination application date to pass everything required; the board amended that rule effective May 15, 2026, and its Summer 2026 newsletter notes the amendment removed the older requirement that testing start within two years of finishing school, so the live clock runs from the exam application. The original license itself costs $50.

Renewal runs on the calendar no other state in this series uses. A personal license is valid for at most two years and renews during the licensee's birth month, and cosmetologists renew in odd numbered years, at $100. A renewal postmarked after the last day of the birth month adds the board's $54 late charge. Section 34-7B-14 gives a lapsed license two reinstatement paths: within four years of expiration, pay the lapsed renewal fees, the current renewal and the late fee; after four years, show proof of the prior license, pass the examinations again, and pay renewal fees of not more than $300 plus the current renewal and late fee. The board's renewal materials publish no continuing education requirement, a genuine difference from most states in this series and one less deadline to track. One more staffing credential belongs in an owner's file: the shampoo assistant license, at $75, covers an employee whose work is limited to shampooing, cleansing and applying temporary rinses.

The shop license and the inspection

The shop license is a separate application to the same board, and Alabama defines a shop broadly: any place where barbering or cosmetology is practiced, including a mobile salon. A new shop license costs $200, and Rule 250-X-3-.01 makes two things happen before it issues. A member of the board staff must physically inspect and approve the premises, and the applicant must provide proof that the location is properly zoned. Get the zoning answer in writing before the lease is final, because the board will ask for it and an unzoned address stops the license at the counter. The same statute adds a management rule owners miss: only a properly licensed person who is not an apprentice or student may operate a shop, so an unlicensed owner opens with a licensee running the floor.

Once open, the display rules are mechanical: the shop license hangs at reception, each practitioner's license hangs at their workstation, and the most recent inspection report is posted by the shop license. A shop may sit inside a residence where local rules allow it, separated from the living quarters by a permanent finished partition rising to the ceiling, with a separate entrance for the shop and its own toilet facility, and a shop may never double as living, dining or sleeping quarters. Services stay inside licensed premises: the only off site exception is for a client whose illness or incapacitation prevents travel, performed by a licensee employed by a licensed shop with the appointment made through the shop. Shop licenses expire September 30 and must be renewed by October 31 in odd numbered years at $150, with the $54 late fee after the deadline. Relocating costs $50, and a name change or owner change costs $25, or a single $25 when both are filed together. Mobile salons have been licensable since January 1, 2022 under Section 34-7B-30, under their own chapter of the board's rules.

Forming your business entity

Most Alabama hair salons form as a limited liability company, and Alabama adds a step before the formation filing that most states skip. The Secretary of State requires a Certificate of Name Reservation before the formation documents are filed, under Section 10A-1-4.02(f): the name must contain Limited Liability Company or the abbreviation LLC, the reservation fee on the Secretary of State's fee schedule is $25, or $28 requested online, and only then does the Certificate of Formation go in, at a filing fee of $200, filed as the original and one copy. A foreign LLC registering from another state pays $150 and reserves its name the same way.

What the Alabama LLC never files is an annual report to the Secretary of State. Its recurring state obligation is a tax return, and it is the signature Alabama trap: the Business Privilege Tax, levied under Section 40-14A-22 on the privilege of being organized under Alabama law or doing business in the state and computed on the entity's net worth. The initial return, Form BPT-IN, is due within two and a half months after the entity organizes, and the Department of Revenue allows no extension of time to file it. Annual returns follow the federal calendar, Form PPT for a pass through LLC, and a six month extension to file is automatic although it does not extend the time to pay. Act 2022-252 then relieves most small salons of the paperwork: for tax years beginning after December 31, 2023, an entity whose calculated tax comes to $100 or less is exempt from filing the return, although the department may ask for an exemption affidavit before issuing a Certificate of Compliance, which costs $13.30 requested online if a lender or landlord ever requires one.

Business names and the trade name registry

Alabama has no DBA filing, and the names section of an Alabama guide is about understanding what the state offers instead. No statute requires a sole proprietor or an LLC trading under a different name to file an assumed name certificate anywhere, with the Secretary of State or with the county, whatever older checklists say about a probate court fictitious name form. Your operating name is carried by the shop license application, the county privilege license, your tax accounts and your lease, and those records should all tell the same story.

What Alabama does run is a marks registry. The Secretary of State's Trademarks Division administers trademark, service mark and trade name registrations under the Title 8 Chapter 12 system, in place since 1988. Registering a trade name costs $30 with an application and three specimens showing the name in use, the registration runs five years, and renewal is another $30 with one specimen. Read it for what it is: a brand record that identifies your business to the state, useful against a copycat across town, and not a license, a permission or a substitute for any filing in this guide. It also works only for a name already in use, because the specimens are the proof.

Federal tax ID and business banking

Apply for an Employer Identification Number on IRS.gov. It is free, it issues online in one session, and any site charging you for an EIN is selling you a form you can file yourself. Alabama keys its registrations to the federal number: the Department of Revenue opens your sales tax and Business Privilege Tax accounts against it, the Department of Labor builds your unemployment account on it, and the county probate office records it on the privilege license.

Open the business bank account as soon as the entity and the EIN exist, and run every fee, product order, rent payment and tax deposit through it. The birth month license renewals, the October shop and privilege license deadlines, the quarterly unemployment reports and the annual privilege tax return all assume the salon can show its own books, and a clean, separate account is the cheapest compliance tool in this guide.

Sales tax through the Department of Revenue

Alabama's sales tax falls on retail sales of tangible personal property and a list of specifically taxed categories, and hairdressing is not one of them. A haircut, color service or style is not a taxable sale in Alabama, so you collect no sales tax on the service ticket. The statewide general rate is 4 percent, and county and city taxes ride on top of taxable sales at rates that vary by address, which is why this guide prints the state rate and sends you to the Department of Revenue's rate lookup for the combined figure at your door.

The retail shelf is the taxable side of the salon. Shampoo, styling products and other take home goods you sell are retail sales at the 4 percent state rate plus the local taxes at your address, and selling them means registering for a sales tax account through My Alabama Taxes, the department's online portal, before the first taxable sale. Buy resale inventory without paying tax under that account, and expect the mirror rule on your own purchases: the back bar supplies you consume and the equipment you use are taxable purchases, because nothing about them is resold. Keep services and products on separate lines at the register so the tax lands only where the statute puts it.

Booth rent in an Alabama hair salon

Alabama is one of the states in this series with no booth renter license at all. Chapter 7B and the board's rules never create the credential and never address booth rental; the word booth appears in the board's book only for school work areas. A stylist renting a chair in your salon needs exactly one board credential, their own cosmetologist license, and they work inside your shop license, your premises and your inspection record. Your compliance file should carry every renter's license number and birth month renewal date alongside your own shop paperwork, because the shop's inspection covers the chairs your renters work from.

The renter's own state filing is a tax license, not a board license. Section 40-12-124 of the privilege license system charges a person engaging in the business of hairdressing on a self employed basis within a shop licensed under Section 40-12-61 a license tax of $7.50 plus the $1 issuance fee, $8.50 a year, bought at the county probate office and renewed by October 31. Employees of the shop are covered by the shop's own Section 61 license and do not buy the Section 124 license, which is one more place the classification line shows up in dollars. The classification question itself runs on control rather than labels: a renter who sets their own prices, books their own clients and pays a set rent reads as a tenant, and the paperwork should be written like the tenancy it claims to be. When the renter wants a door, a lock and a business the public experiences as its own, the suite guide in this cluster covers the shop license that room requires.

Hiring employees in Alabama

Your first hire registers the salon as an Alabama employer on two tracks. The Department of Revenue takes the withholding registration through My Alabama Taxes, and the Department of Labor, through Workforce Alabama, takes the unemployment insurance registration. Newly liable employers pay unemployment tax at 2.70 percent on the first $8,000 of each employee's wages, and later rates are experience rated on the salon's own claims history, so the first year rate is a starting point rather than a fixture.

Alabama sets no state minimum wage at all. The United States Department of Labor's state wage table records Alabama as having no state minimum wage law, so employers covered by the Fair Labor Standards Act pay the federal floor: $7.25 an hour, with the federal tipped cash wage of $2.13 an hour where tips bring the total to $7.25. Because there is no state wage statute layered on top, federal rules carry the whole wage and hour file, from overtime to tip credits. Workers compensation coverage belongs on the same first hire checklist: confirm your duties with the Department of Labor and place coverage with a carrier before the first employee's first shift, and keep the certificate with the licenses it sits beside.

Local rules for an Alabama hair salon

The local layer in Alabama has a name and a counter: the state and county privilege license, bought at the county probate judge or county revenue office where the salon sits. Sections 40-12-2(c) and 40-12-2(e) collect both levies in one purchase, the county taking 50 percent of the state amount, with a $1 issuance fee on top. For a beauty parlor, Section 40-12-61 sets the price: $15 for the shop owner, plus $9 for each additional operator in a city over 60,000 people, or $6 per operator in smaller places and everywhere else. The Department of Revenue's handbook reads the section broadly: it covers hair removal, it applies to a manicurist employed inside the shop, and it is needed even when the salon operates from a home. The license renews every year by October 31, and missing the date adds a 15 percent penalty plus interest.

A municipal business license, where your city levies one, is separate and additional, and it is the layer whose price no state publication can give you. Zoning sits underneath everything: the board requires proof the shop location is properly zoned as part of the shop license itself, so the zoning answer belongs at the top of the file, in writing, before the lease is signed. A salon that changes addresses restarts three clocks at once, the board's $50 relocation, a new privilege license for the new place of business, and the city's own license for the new address.

Insurance for an Alabama hair salon

Chapter 7B does not condition the shop license on an insurance filing, so the insurance stack for an Alabama salon is set by risk and by contract rather than by the board. Professional liability is the core policy for a room built on chemical services, hot tools and wet floors around shampoo bowls, and it is the coverage a booth rent structure has to think hardest about, because the salon's policy, the renter's own policy and the shop's inspection record describe overlapping people working in the same room.

General liability for the premises and property coverage for equipment, furniture and the retail stock complete the standard stack. Landlords, and suite landlords in particular, routinely name their own limits and additional insured requirements in the lease, and those contract numbers, not a statute, are the figures to satisfy. One contrast is worth knowing inside this cluster: massage is the trade where Alabama does write the insurance number into the license itself, at $1,000,000, which is a reminder that the absence of a salon figure is a board choice and not an oversight to fill with a guess.

Your Alabama renewal calendar

Official sources

• Board of Cosmetology and Barbering: license types, training hours and routes
• Board of Cosmetology and Barbering: the fee schedule, exams, licenses and shops
• Board of Cosmetology and Barbering: Title 34 Chapter 7B and Chapter 250-X rules
• Secretary of State: LLC formation, name reservation and filing fees
• Secretary of State: trade name registration through the Trademarks Division
• Department of Revenue: Business Privilege Tax forms, deadlines and the $100 exemption
• Department of Revenue: Handbook of Privilege and Store Licenses, Sections 40-12-58, 40-12-61 and 40-12-124
• Department of Revenue: state sales and use tax rates
• Workforce Alabama: employer unemployment tax basics
• United States Department of Labor: state minimum wage laws, Alabama entry

Alabama hair salon FAQ