How to Start a Barbershop in Arkansas

Who licenses barbershops in Arkansas

Barbershops answer to the State Board of Barber Examiners, a board inside the Department of Labor and Licensing, working under Title 17, Chapter 20 of the Arkansas Code and its own rules in the Arkansas Administrative Code. The Board registers four things: barbers, teacher manager instructors (the credential that teaches and manages), barber technicians, and barbershops themselves, and it licenses the barber schools and students upstream of them. Its office is in Little Rock, but its counter is digital: the Board takes all applications and renewals online only, through its portal at arbarber.com, and no longer accepts cash, checks or money orders at all.

The barber board's separateness matters in both directions. A cosmetologist license from the Department of Health does not authorize barbering, and the Department of Health's own rules underline the wall from the other side: a cosmetology salon that lets a licensed barber practice must also hold a barber establishment license from this Board. A hybrid shop is therefore a two-regulator business from the first chair. Everything else about opening, the entity, the name, the taxes and the lease, belongs to the general agencies covered in the rest of this guide: the Secretary of State, the Department of Finance and Administration, and the city.

Arkansas barbershop at a glance

The barber certificate, step by step

Arkansas sets the barber's training bar at the top of the national range. Act 436 of 2025, which amended section 17-20-303, requires the applicant to file a notarized application certifying at least 1,500 hours of barber training, with two passport photos and a copy of identification. The school side of the system is built to the same number: board approval of a barber school requires a course of not less than 1,500 hours, completed in not less than 9 months, and a student license, priced at $20 per year of schooling in the Board's fee rule, covers the trainee while those hours accumulate.

The fee rule, Rule 16 of the Board's rules at 235.04.22-001 in the Arkansas Administrative Code, prices the rest of the lifecycle: a certification of hours or correspondence costs $50, and reciprocity, the route for a barber licensed elsewhere, costs $150 for the reciprocity and license fee together. The statute supports that route at the full standard: a barber with 1,500 hours transfers on credentials, and a barber with fewer hours qualifies with at least one year of continuous practice plus proof. An unlicensed applicant who has nonetheless completed 1,500 hours of training may be registered by examination.

Renewal is where Arkansas barbering turns collective. Every registered barber, teacher manager instructor and barbershop renews annually in the same window, July 1 to September 1, at $50 for a barber and for a shop and $40 for an instructor. Miss the window and the credential is restored, not simply renewed: restoration costs $75 per year of delinquency for a barber or a shop and $48 per year for an instructor, and the Board caps restoration at three years of delinquency. Past three years, the route back is re-examination. An owner tracking a team's credentials is therefore tracking one deadline for the whole shop, and a shop that sleeps through September has priced its autumn at $75 a head.

The barbershop registration

The shop is registered separately from everyone in it. A new barbershop registration costs $70 under the Board's fee rule, the annual renewal is $50, and restoration after the September 1 deadline runs $75 per year of delinquency, the same arithmetic as the barber's own credential. The registration is also brittle in a way owners miss: any change to a barbershop requires a new application and fee, so a move, a rebuild or a restructuring is a filing event, not just a lease event.

Two premises rules in the Board's rules decide where a shop can exist at all. No barber establishment may be located inside a residence, and no sleeping area is permitted in any barber establishment, which together close the home based and live-in shop models that some states in this series tolerate. Inside the room, shops and schools operate under the supervision of a registered barber: the supervision duty sits in the rules rather than in a separate manager license, and it means an owner who does not cut hair still has to staff the shop so that a registered barber supervises it whenever it is open. A shop that also offers cosmetology services crosses into the second regulator: the Department of Health licenses the cosmetology side and its establishment, and the cosmetology rules require the barber establishment license from this Board before a barber practices in a salon, so the hybrid shop carries both premises credentials.

Forming your business entity

Most Arkansas barbershops form as a limited liability company with the Secretary of State's Business and Commercial Services division. The Certificate of Organization, Form LL-01, costs $45 filed online or $50 by mail or in person, and the form's second page registers the LLC for franchise tax at no extra fee. The recurring cost is the one to budget: under the Arkansas Corporate Franchise Tax Act, sections 26-54-101 and following, every LLC files an Annual Franchise Tax Report and pays a flat $150 franchise tax, due on or before May 1 each year for the preceding calendar year, filed with the Secretary of State. Online filing carries a $5 processing fee on the payment.

That report is the Arkansas annual report; there is no separate one. A late report draws a $25 penalty plus interest, franchise taxes keep accruing for a revoked business until it is dissolved, withdrawn or merged, and section 26-54-114 bars the Secretary of State from accepting further filings from an entity that has not paid. For a shop, that bar has a practical edge: the owner who lets the franchise tax lapse cannot cleanly amend, convert or dissolve the entity until it is paid. A sole proprietor skips the certificate and the franchise tax, and holds the shop's liabilities personally in exchange.

Business names: the fictitious name, state and county

An Arkansas business that trades under a name different from its legal name files in two places. The entity files Form DN-18, the Application for Fictitious Name, with the Secretary of State; the published fee schedule prices the DN-18 for a domestic LLC at $22.50 filed online or $25 by mail or in person. A shop trading under its LLC's exact filed name needs no fictitious name filing; the same shop trading under a shorter barbershop name does.

Standard Arkansas practice under the DN-18 process then takes the file-marked copy to the county clerk of the county where the registered office is located, with one stated exception: where the registered office is in Pulaski County, the state filing alone suffices. Sole proprietors and general partnerships file an assumed name certificate with the county clerk in each county where they do business instead, at fees the counties set. The filing creates no entity and grants no exclusive right to the name; it is the public record of who stands behind the sign, and it substitutes for no license.

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 for an EIN is selling a form you can file yourself. The EIN keys the registrations that follow: the Department of Finance and Administration's taxpayer account, the unemployment insurance employer account when you hire, and the business bank account.

Open the business bank account as soon as the entity and the EIN exist, and run every fee, product order, rent payment and payroll deposit through it. A barbershop's money is unusually easy to blur, with chair rent, tips and retail crossing the same counter, and separate books are what keep the shop's income, the barbers' income and the rent legible if classification or a tax filing is ever questioned. The account is also the cleanest evidence that renters run their own businesses, which is the fact pattern the chair rent section below depends on.

Sales tax in Arkansas: services are not taxed, retail is

Arkansas calls its sales tax a gross receipts tax, and services are taxed only when the law enumerates them. The Department of Finance and Administration's Gross Receipts Tax Rules enumerate services such as body piercing, tattooing and electrolysis; barber services are not on the list. A haircut, a shave, a beard trim and a hot towel service carry no gross receipts tax at any rate. The statewide rate, 6.5 percent of gross receipts with city and county taxes stacked on top, never attaches to the service ticket.

The counter still sells things. Pomade, clippers, aftershave and take-home product are retail sales of tangible personal property, and tax is collected on them at the combined state and local rate for the shop's address. Register with the Department of Finance and Administration through the Arkansas Taxpayer Access Point and hold the sales and use tax permit before the first retail sale, then itemize services and products on separate lines from day one. Supplies the shop consumes, capes, blades, towels and disinfectant, are the shop's own purchases, taxed to the shop rather than passed through on the ticket.

Chair rent and worker classification

Arkansas has no chair renter license in barbering, and the structure that makes chair rent work is the pair of registrations: a registered barber working in a registered barbershop, under the supervision of a registered barber as the rules require. The renter's credential is his own certificate; the shop's registration covers the premises; and the practical paperwork is a written rental agreement and separate books. A renter who wants the shop itself, a solo barber running his own one-chair shop, simply holds both registrations, his certificate and the shop registration, in the same name or through his entity.

Classification is the part the barber rules do not decide. No Arkansas barbering statute fixes the tax treatment of a rental, so the question is answered by control, as it is everywhere: a renter who sets his own prices, hours and client list and collects his own money reads as an independent business, while a barber whose schedule, prices and products the shop controls reads as an employee whatever the agreement calls him, with withholding and unemployment insurance following that reading. The residence rule draws one hard boundary around the whole subject: because no barber establishment may sit inside a residence, the home chair is not a classification question at all; it is a prohibited location.

Hiring employees in Arkansas

The first hire registers the shop as an Arkansas employer on two tracks. For unemployment insurance, the shop opens an employer account through the Tax21 portal: the 2026 schedule sets the taxable wage base at $7,000 per employee, a new employer rate of 2.0 percent and a stabilization rate of 0.2 percent, with experienced employer rates from 0.2 to 5.1 percent and higher deficit levels for accounts with heavy claims. For income tax, the shop registers with the Department of Finance and Administration to withhold Arkansas tax from wages.

The wage floor is the Arkansas Minimum Wage Act, administered by the Department of Labor and Licensing's Labor Standards division: $11.00 an hour since January 1, 2021, covering employers with four or more employees. Tipped employees must be paid at least $2.63 an hour in cash wages, and overtime is one and one-half times the regular rate over 40 hours in a workweek. A barber paid on commission still has an hourly floor underneath the commission, so hours belong on a record even in a commission shop. Workers compensation coverage belongs on the same first hire checklist, arranged before the first employee's first shift.

Local rules for an Arkansas barbershop

The state registrations do not finish the opening. Arkansas cities license businesses locally, and a shop opening inside a city should expect a city business license on top of the state stack, at fees and on forms the city sets. The trade name adds its county step, the clerk filing described above, which stays a courthouse errand even for a business that filed everything else online.

Zoning sits underneath the licensing, and barbering adds a location rule of its own: the Board's ban on establishments inside residences and on sleeping areas inside shops means the zoning question is not only whether the parcel allows a barbershop but whether the building's use pattern fits the rule at all. A chair in a converted garage behind the owner's house fails on the residence rule before zoning is reached. Make both calls, the city's use approval and the Board's premises position, before the lease is signed.

Insurance for an Arkansas barbershop

Nothing in Chapter 20 or the Board's rules, as read for this guide, conditions the barber certificate or the shop registration on an insurance filing, so the insurance stack is set by risk and by contract. Professional liability is the core policy for a business built on razors, clippers and chemical services, and the chair rent structure has to think hardest about it: the shop's policy, each renter's own policy and the lease describe overlapping people in the same room, while responsibility for the room itself sits with the shop registration holder and the supervising barber.

General liability for the premises and property coverage for chairs, clippers, build out and retail stock complete the standard stack. Landlords routinely write their own limits and additional insured requirements into the lease, and those contract numbers are the figures to satisfy. Arkansas names no required limit for a barbershop in the barber rules, so treat any figure quoted as a state requirement as a sales line.

Your Arkansas renewal calendar

Official sources

• State Board of Barber Examiners: online applications and renewals for barbers, instructors and barbershops
• Department of Health: cosmetology FAQs, including the barber establishment license a salon must also hold
• Secretary of State: LLC forms and fees, Form LL-01 and Form DN-18
• Secretary of State: franchise tax and annual report forms, the $150 LLC report
• Department of Finance and Administration: Gross Receipts Tax Rules, the enumerated taxable services
• Unemployment insurance for employers: Tax21 registration and the 2026 rates and wage base
• Department of Labor and Licensing, Labor Standards: the $11.00 minimum wage and overtime

Arkansas barbershop FAQ