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How to Start a Salon Suite Business in Illinois: Licenses, Costs & Requirements

Illinois never wrote a salon suite law, and it did not need to. The state registers salons by location and presumes workers inside someone else's salon are employees, so the suite model, where every tenant is an independent salon with its own registration at its own address, is the one structure Illinois law already fits. This guide works through both sides of the lease: the building owner and the tenant.

Researched from Illinois state sources. Our guides are free. We may earn a commission when you use a partner service, at no additional cost to you.

The regulator: the Department of Financial and Professional Regulation

Illinois beauty premises answer to the Department of Financial and Professional Regulation, through its Division of Professional Regulation, under the Barber, Cosmetology, Esthetics, Hair Braiding, and Nail Technology Act of 1985 (225 ILCS 410) and the rules at Title 68, Part 1175 of the Illinois Administrative Code. The Act makes it unlawful to own or operate a cosmetology, esthetics, nail technology or hair braiding salon, or a barber shop, without a certificate of registration. Read that sentence the way the Department does and the suite model falls out of it: the regulated unit is the salon, not the building, and not the real estate business that owns the building.

So an Illinois suite building contains as many regulated salons as it has independent tenants. The landlord who leases space, provides utilities and common areas and offers no beauty services operates no salon and holds no salon registration. Each tenant who opens their own salon in a unit operates one, and registers that unit. Nothing about the arrangement needs a special suite category, and the absence of one is the point: owners who go looking for a suite license at the Department are looking for a document that does not exist, while the document that does exist, the $40 salon registration per unit, is the one their tenants need.

Illinois salon suite requirements at a glance

Practitioner licenses: what every tenant holds

A suite tenant's authority to work comes from the same licenses as any salon employee's. Cosmetologists qualify at 1,500 hours with a $200 examination fee and renew at $50 with 14 hours of continuing education, expiring September 30 of odd numbered years. Barbers qualify at 1,500 hours over at least 9 months with a $112 examination fee and renew on July 31 of odd numbered years. Estheticians qualify at 750 hours with a $175 examination fee, nail technicians at 350 hours with a $190 examination fee, and hair braiders at 300 hours; estheticians renew with the cosmetologists in odd years, while nail technicians and braiders renew October 31 of even numbered years with 10 hours of continuing education. Every license carries the same $30 initial fee set by rule, and endorsement from another state costs $45.

The suite context adds one practical wrinkle: there is no employer checking licenses at the door. In a conventional salon the owner verifies credentials because the owner answers for the floor. In a suite building each tenant is the operator of their own salon, so the tenant's own license, current and renewed on the right fixed date, is entirely the tenant's responsibility, and a landlord who markets the building should still verify registrations and licenses at lease signing, because an unregistered unit is a building full of compliance risk wearing the landlord's address. Massage and body art tenants follow their own regulators instead: massage therapists hold the state license described in the Illinois massage guide, and a microblading tenant needs the Public Health establishment registration in the Illinois microblading guide, not a salon registration.

The establishment credential: one registration per salon

The certificate of registration under Subpart M of the Part 1175 rules is issued per salon location, and in a suite building each independently operated unit is its own salon location. The tenant applies for the registration for their unit at $40, names their own business, and holds the registration in their own right. That single fact does most of the legal work in the Illinois suite model: the tenant is not practicing under the landlord's registration, because the landlord has none, and is not practicing under another salon's registration down the hall.

All certificates of registration expire November 30 of even numbered years, renewal is $40 for the cycle, calculated at $20 a year, and the renewal window opens in the two months before the date. A tenant who moves units within the same building, or takes a second unit, updates or adds registrations accordingly; a change of name or address costs $20 and a reprinted certificate $20. A lapsed registration restores for $40 with the business's federal employer identification number and any assumed name certificate in the filing. Lease drafting should track the registration: the lease names the tenant as the operator of the salon in the unit, obliges the tenant to hold and renew the registration and their license, and keeps the landlord's role to premises and common services, because the closer the landlord drifts toward running the salon, the weaker the separation the whole model depends on.

Forming your LLC: the $150 filing and the $75 annual report

Both sides of a suite building usually form limited liability companies, the landlord for the real estate and each tenant for their salon, and Illinois treats each the same. Articles of Organization, Form LLC-5.5, are filed with the Secretary of State's Department of Business Services for $150, with standard processing running about ten business days; 24 hour expedited service brings the total to $250. Each LLC needs a registered agent with an Illinois street address, and Illinois requires no newspaper publication to form.

Every LLC then files an annual report with the Secretary of State for $75, due before the first day of the anniversary month of formation. File more than 60 days late and a $100 penalty attaches; leave it unfiled long enough and the Secretary of State administratively dissolves the LLC. For a tenant, dissolution is not a technicality: the salon registration, lease, bank account and booking platform all sit in the entity's name. A landlord forming separate LLCs per building owes one report per entity, and a series LLC, available at a $400 filing fee, is the structure some multi building owners use to keep properties in separated compartments under one filing.

Trading under a name: the assumed name split

Suite tenants brand their own salons, so assumed names multiply inside one building, and Illinois splits the filing by structure. Sole proprietors and general partnerships, and professional corporations, register an assumed business name with the county clerk in the county where the business operates, under the Assumed Business Name Act (805 ILCS 405). Corporations and LLCs register with the Secretary of State instead, an LLC by adopting an assumed name on Form LLC-1.20. Each tenant files for their own name; the building's brand name, if the landlord uses one, is the landlord's own filing and covers nothing about the tenants' trade names.

The county route carries newspaper publication. In Cook County the registration fee is $50, the application is signed and notarized, and the owner publishes the legal notice in a local newspaper once a week for three consecutive weeks, starting within 15 calendar days of registration, with proof of publication due back to the Clerk within 50 days; missing that deadline voids the registration. The Secretary of State route has no publication step, and its fee is prorated on a five year cycle, $150 in a year ending in 0 or 5 down to $30 in a year ending in 4 or 9, so an LLC adopting an assumed name in 2026 pays $120.

Getting your EIN

Each business in the building needs its own Employer Identification Number, and it is free. Apply on the IRS website and the number issues immediately. The tenant's EIN runs their payroll if they hire, their MyTax Illinois registrations and their bank account; the landlord's EIN runs the real estate business. Nothing is shared, which is the point: separate EINs are one of the markers that each unit is its own business. Get the number after the entity exists and before the salon registration application, because a registration restoration and most state filings key off it.

Sales tax: untaxed services and taxable retail

Illinois taxes retail sales of tangible personal property, not services, and in a suite building that rule applies tenant by tenant. Each tenant who sells retail products, take home hair care, skin care, polish or aftercare, registers on Form REG-1 through MyTax Illinois under their own account and reports on Form ST-1. The tenant who sells nothing retail has no sales tax account to open, because their service tickets are untaxed. The landlord's rent is not a retail sale and carries no sales tax collection duty for the landlord.

The rate is built by address: a 6.25 percent state base plus the local layers for the building's address, county and municipal shares, home rule taxes, and transit taxes in the Chicago region that push Chicago's combined rate above 10 percent. Every tenant in the same building therefore programs the same rate from the Department of Revenue's Tax Rate Finder, but files separately. Products a tenant hands a client as an inseparable part of a service can fall under the Service Occupation Tax on the cost of the goods, per the Department's ST-1 instructions. Entity taxes stay separate too: a tenant LLC taxed as a partnership pays the 1.5 percent Personal Property Replacement Tax on its own net income, on top of the members' flat 4.95 percent individual income tax.

Suite tenancy versus booth rent: why the line matters

The Illinois suite model exists because of a test, not a license category. Section 212 of the Unemployment Insurance Act (820 ILCS 405/212) treats a worker as an independent contractor only when the worker is free from the business's control, the service is outside the usual course of that business or outside all of its places of business, and the worker runs an independently established trade. Booth rent inside a working salon fails that test twice over: the stylist does the salon's usual work at the salon's place of business, under the salon's registration. The Department of Employment Security reads chair rental arrangements as employment in audits, and no contract language cures it.

A true suite tenancy is built to be the opposite fact pattern. The tenant's salon is the tenant's own place of business, registered to the tenant, with the tenant's own clients, prices, hours, booking system and tax accounts, and the landlord provides space and building services rather than salon work. That is why the paperwork in this guide separates so carefully: the moment a landlord starts taking a percentage of services, setting prices, supplying the clients or holding the building out as a single salon, the arrangement slides back toward booth rent with a nicer door. Owners converting an existing salon into suites should make the break cleanly, with new leases, new registrations per unit and separate payment processing from day one.

Employment: when a tenant or landlord becomes an employer

A solo suite tenant has no employees, and the landlord is not the tenant's employer, which is the employment simplicity the model sells. The duties arrive when someone hires. A tenant who brings on an assistant, a receptionist or a second chair registers with the Department of Employment Security within 30 days, pays unemployment contributions on the first $14,250 of each employee's 2026 wages at the 3.35 percent new employer rate until experience rated, reports quarterly on Form UI-3/40 through MyTax Illinois, withholds Illinois income tax at a flat 4.95 percent on Form IL-941, reports new hires to the Illinois New Hire Directory within 20 days, and carries workers' compensation coverage.

The wage floor for any hire is $15.00 an hour statewide, with a $9.00 tipped cash wage where tips genuinely carry pay to the full rate, plus 40 hours of paid leave a year under the Paid Leave for All Workers Act, earned at one hour per 40 hours worked. Landlords cross into employer territory only for their own staff, cleaners, maintenance and front desk help they hire directly. One caution belongs in every suite lease: if building staff are in practice directed by tenants day to day, classification questions follow the control, so keep the landlord's employees on the landlord's tasks.

The local layer: Chicago, Cook County, and everywhere else

Chicago licenses each business in a suite building separately. Beauty premises operate under a Limited Business License from the Department of Business Affairs and Consumer Protection, currently $500 for a two year term, and tenancy does not fold a tenant into the building owner's licensing: each Chicago suite tenant holds their own city license alongside their state registration and practitioner license. Zoning deserves attention at the building level, because the Department's licensing materials flag some beauty, nail and barber shops as special uses in some districts, and a suite conversion changes a building's use pattern even where a single salon was straightforward.

Chicago labor law reaches any tenant who hires: a $17.05 minimum wage for employers with four or more employees, a $12.96 tipped cash wage, effective July 1, 2026 and adjusted every July 1, plus the city's paid leave and paid sick leave ordinance on top of the state act. A solo tenant with no employees feels Chicago mainly through the license fee. Suburban Cook County sets a $15.40 wage floor in municipalities that have not opted out, and the rest of Illinois runs on the $15.00 state floor, with municipal zoning, signage rules and any general business license as the remaining local layer for suite buildings.

Insurance and recurring costs

Neither the Act nor the Part 1175 rules conditions a salon registration on a bond or an insurance filing, for a suite unit any more than for a storefront salon. Insurance in a suite building is allocated by the lease, and getting the allocation right is the owner's main risk task. The landlord carries property coverage on the building and general liability for common areas. Each tenant carries their own professional liability for services and general liability for their unit, usually with the landlord named as an additional insured as a lease condition. A tenant with employees adds workers' compensation coverage, which is a legal duty rather than a lease term.

Recurring costs split cleanly. Per tenant: practitioner renewal at $50, the unit registration at $40 every two years, the $75 LLC annual report for tenant LLCs, and the Chicago license at $500 every two years where it applies. Per building: the landlord's entity filings and insurance, and no per unit state fees at all, which is why suite economics in Illinois scale better than owners expect from a licensed industry.

Your Illinois renewal calendar

• Every 2 years, expiring November 30 of even numbered years: each tenant's salon registration renews at $40; renewal opens in the two preceding months
• Every 2 years, on each profession's own date: practitioner licenses renew at $50, cosmetologists and estheticians on September 30 of odd years, barbers July 31 of odd years, nail technicians and braiders October 31 of even years
• Every year, before the first day of each LLC's formation anniversary month: annual reports at $75, one per entity, landlord and tenants alike
• Every quarter, for any business with employees: unemployment contributions and wage reports on Form UI-3/40, due April 30, July 31, October 31, and January 31
• Within 20 days of each hire by any tenant: new hire report to the Illinois New Hire Directory
• On the Department of Revenue's schedule: sales tax returns on Form ST-1 for each tenant who sells retail
• Every July 1: Chicago and Cook County minimum wage adjustments take effect for tenants with staff
• At every lease signing and renewal: verify the tenant's practitioner license and salon registration are current for the unit

Official Illinois sources for this guide

• Department of Financial and Professional Regulation, Cosmetology: practitioner licensing, examination fees, and salon and shop registration
• Department of Financial and Professional Regulation, license renewal information: restoration fees and steps for lapsed licenses and registrations
• Cook County Clerk, assumed business name registration: the $50 fee, publication, and the 50 day proof deadline
• Department of Revenue, ST-1 instructions: the 6.25 percent state rate, local tax layers, and the Tax Rate Finder
• Department of Employment Security, 2026 contribution rates: the $14,250 wage base and the 3.35 percent new employer rate
• Department of Labor, Minimum Wage Law: the $15.00 wage, the $9.00 tipped cash wage, and overtime
• City of Chicago, minimum wage: the $17.05 city wage and the $12.96 tipped wage
• Cook County, Minimum Wage Ordinance and regulations: the $15.40 county wage and the $9.25 tipped wage

This guide is general information researched from official Illinois sources, not legal or tax advice. Requirements, fees and forms change; verify the current rules with the agencies linked above before you file, sign or spend.

Frequently asked questions

Does Illinois have a salon suite license?

No. Illinois has no suite license and no suite registration category. The state registers salons and shops by location, so the building itself is not the regulated unit. Each tenant who operates an independent salon inside a suite building holds their own certificate of registration for their own space, and a landlord who only rents space and provides no services holds no salon registration at all.

Does each suite tenant need their own salon registration in Illinois?

Yes. A tenant running their own salon in a suite is operating a salon at that location and registers it with the Department of Financial and Professional Regulation: $40 to open and $40 to renew every two years, expiring November 30 of even numbered years. The tenant also holds their own practitioner license, and in Chicago their own city business license.

Why does the suite model work in Illinois when booth rent does not?

Section 212 of the Unemployment Insurance Act presumes a worker inside someone else's salon is an employee, because the work happens at that salon's place of business under its registration. A suite tenant works in their own place of business, under their own registration, with their own clients, prices and tax accounts. That separation is what makes the tenant a business rather than a misclassified employee.

What filings does an Illinois suite tenant need?

The tenant's stack is the small salon stack: a practitioner license, the $40 salon registration for the unit, an EIN, a Form REG-1 business registration if they sell retail products, and an assumed name filing if they trade under a name other than their own. Tenants who form an LLC file Articles of Organization for $150 and the $75 annual report.

What does the suite building owner need in Illinois?

A pure landlord needs no salon registration, because the landlord operates no salon. The owner's obligations are the real estate ones: a lease structure that makes each tenant the operator of their own registered salon, zoning that allows the use, and building and fire compliance. If the owner starts providing services, booking clients or holding the building out as one salon, the analysis changes and a registration in the owner's name enters the picture.

Does a Chicago suite tenant need a city license?

Yes. Each Chicago beauty business operates under its own Limited Business License from the Department of Business Affairs and Consumer Protection, currently $500 for a two year term, on top of the tenant's state registration and practitioner license. Tenancy does not put the tenant under the building owner's city license.