How to Start a Hair Salon in Indiana
An Indiana hair salon runs on two licenses from one board inside the Professional Licensing Agency. The State Board of Cosmetology and Barber Examiners issues the cosmetologist license after 1,500 hours of school and a written examination, for $40, and it licenses the salon itself as a beauty culture salon for another $40, on a temporary permit that gives you three months to get from application to open doors. Both licenses renew on a four year cycle, which is twice the runway most states allow. Around those licenses sits the Indiana business stack: an LLC that costs $95 to form and $32 every two years to keep, an assumed business name filing that goes to the Secretary of State or the county recorder depending on your business form, and a sales tax that never touches a haircut. This guide walks the whole stack in order, with every fee traced to the rule or statute that sets it.
Indiana sources last reviewed: November 3, 2026
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Who licenses hair salons in Indiana
Hair salons answer to the State Board of Cosmetology and Barber Examiners, a combined board inside the Indiana Professional Licensing Agency that licenses cosmetologists, barbers, estheticians, manicurists and electrologists under Indiana Code Title 25, Article 8, with the board's rules at 820 IAC. The board licenses two different things that new owners constantly merge into one. The cosmetologist license belongs to the person: it proves she finished 1,500 hours of training and passed the written examination. The beauty culture salon license belongs to the location: it proves the premises meet the board's facility requirements and sit under the personal supervision of a licensed professional. A salon needs both layers before the first paying client, applications and renewals run online through the agency's MyLicense One portal, and every license in the building can be checked by anyone through the agency's license lookup.
The cosmetology scope behind the license is broad. It covers hair services along with the skin and nail services that in Indiana also have their own narrower licenses, which is why a cosmetologist can legally work across a full service menu. Two boundaries matter. Natural hair braiding is carved out of the cosmetology definition entirely, because the legislature exempted it in IC 25-8-1.1-1. And the board's rules were freshly updated in 2026: revisions to 820 IAC under LSA Document #25-328 took effect July 22, 2026, touching education, fees, practice, sanitation and facility requirements, so the licensing information page, not an older printout, is the version to plan against.
Indiana hair salon at a glance
| Item | Indiana requirement |
|---|---|
| Practitioner license | Cosmetologist license, State Board of Cosmetology and Barber Examiners |
| Training | 1,500 hours at an Indiana approved beauty culture school, or a registered apprenticeship |
| Exam | Written examination through PSI; upload the pass notice with the application |
| License fees | $40 application, $40 renewal every four years, $80 reinstatement after three years expired |
| Salon license | Beauty culture salon license, $40 application, $40 renewal every four years |
| Opening rule | Temporary permit issues on a complete application and is valid for three months |
| Entity filing | LLC Articles of Organization $95 online or $100 by mail; Business Entity Report $32 online every two years |
| Assumed business name | Secretary of State for entities, $20 online or $30 by mail; county recorder for sole proprietors |
| Sales tax | Services not taxed; retail product taxed at 7 percent statewide, no local sales tax |
The cosmetologist license, step by step
Start with school. The cosmetologist license requires 1,500 hours at an Indiana approved beauty culture school, after completing the 10th grade or its equivalent. Your school completes a Beauty Culture Education Certification form and returns it to you for the application. Indiana also accepts the other front door: completion of a U.S. Department of Labor registered apprenticeship program, documented with your apprentice number and certificate of completion. When the hours are done you apply online, pay the $40 application fee by card, and upload your examination pass notice: Indiana tests cosmetologists with a written examination administered through PSI, and the board's instructions build the pass notice into the application itself. Application fees are nonrefundable, and an application left incomplete for one year is treated as abandoned, so an unfinished file quietly expires instead of pending forever.
The license renews on a four year cycle for another $40, with renewal notices sent about 90 days before expiration, and Indiana imposes no continuing education requirement on the renewal. The late mechanics are written into the board's own forms and instructions, and they reward attention. Renewing less than three years after expiration carries a $50 late fee. Past three years, the license comes back by reinstatement under IC 25-1-8-6 for $80, which is simply the current renewal fee plus the current application fee, plus any remediation the board orders. At five years expired, the board's remediation is set: take and pass the written licensing examination again. A lapsed license is therefore a fee problem in year two and an examination problem in year five.
Keep the license current and posted. The board's facility instructions require every licensee to post the Indiana license at the workstation, and an expired license posted at a station can be grounds to deny a salon application. If you trained in another state, the reciprocity route asks whether your home jurisdiction imposes substantially equal requirements; where its hours fall short, the board can credit one year of licensed practice as 100 hours of education, and the other jurisdiction must require at least 70 percent passing on its written and practical examinations.
The beauty culture salon license and your premises
The salon itself is licensed as a beauty culture salon under IC 25-8-7, one establishment license that covers cosmetology, esthetics and manicuring services under one roof; barber shops ride in the same chapter, with the license stating that it is a barber shop in prominent type. The application fee is $40 and the license renews every four years for $40. The application asks you to work in a specific order: select the site, obtain any building permit, certificate of occupancy or other approval required under IC 22-15-3 and IC 36-7-4, install the furnishings and equipment the board's rules require, and file a verified statement that the salon will be under the personal supervision of a licensed beauty culture professional.
The timing rule is the one that burns new owners. The agency's instruction is blunt: do not apply for the salon license until your facility is ready to open. A temporary permit issues as soon as a complete application is received, and it is valid for three months. Apply too early and the permit window runs while your chairs are still in boxes, and you may have to close until the license issues. Operate without the temporary permit and the application itself can be denied. The same denial risk attaches to letting unlicensed people practice in the salon while the application is pending, which makes a soft opening with unlicensed friends helping out a genuinely expensive idea.
Two structural rules shape the business after opening day. A salon in the same building as a residence must be separated from the living space by a substantial floor to ceiling partition with its own separate entry, which is the whole state level law of the home salon in Indiana. And licenses are personal to the holder and the location: under IC 25-8-4-4 a license does not transfer, with one narrow exception that lets a salon or barber shop license move when the holder had to change location for reasons the board finds were beyond the holder's control. A buyer of your salon files her own application; she does not inherit yours. Mobile work has its own license at the same $40 fee, covering a self-contained movable facility or equipment transported to other salons, homes and nursing homes, again under a licensed professional's personal supervision.
Forming your business entity
Most Indiana beauty businesses form as an LLC, and Indiana prices the form near the bottom of the national range. The Articles of Organization, State Form 49459, are filed with the Secretary of State through INBiz and cost $95 online or $100 by mail. The online figure is built into the statute and the Secretary of State's fee schedule: a $75 filing fee under IC 23-0.5-9-19 plus a $20 enhanced access fee. The articles name your registered agent and your principal office, and INBiz issues the certificate that your bank, your landlord and the licensing board will each ask to see.
The filing that keeps the entity alive is the Business Entity Report, and Indiana runs it on a two year cycle rather than the annual cycle most states use. The first report comes due two years after formation, by the end of the month in which the entity was formed, and it costs $32 filed online or $50 on paper. INBiz charges no late fee, but a missed report is not free: the Secretary of State can administratively dissolve an entity that stops filing, and reinstatement means filing every overdue report and paying the reinstatement charges. A salon formed in March owes its first report by the end of March two years later, and every two years after that. None of these filings replaces the licenses above. The Secretary of State registers your entity, and the board licenses your people and your premises, and the two systems do not talk to each other.
Business names and the assumed business name
Indiana calls its trade name filing a certificate of assumed business name, and IC 23-15-1-1 splits the filing office by the kind of business you are. A sole proprietor or a general partnership trading under a name other than the owner's real name files the certificate for record with the county recorder of each county where the business has a place of business or an office, and the recorder charges the recording fee set by IC 36-2-7-10 on the county's schedule. An entity that trades under a name different from the name in its formation documents files the certificate with the Secretary of State instead, on State Form 30353 through INBiz: the fee is $20 for an electronic filing or $30 on paper for a corporation, limited liability company, limited partnership or limited liability partnership. The statute sets no renewal or expiration for the certificate. It stays on file until you file a notice that you have stopped using the name.
Two practical points follow. The assumed name filing is a public notice filing, not a license and not a trademark, and it does not reserve the name against anyone else; a name reservation through INBiz, $10 for 120 days, is the tool that holds a name while you organize. And the name on the certificate, the name on the salon license application and the name on your signage should tell one consistent story, because clients, inspectors and your bank all read them side by side.
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. You need the EIN to open the business bank account, to run payroll once you hire, and to complete the state employer registrations described below, which key on the federal number. A single member LLC can technically operate on the owner's Social Security number for some federal purposes, but the salon's bank account, card processing and employer registrations all run more cleanly on an EIN, and handing your personal number to every vendor is a habit worth avoiding from day one.
Open the business bank account as soon as the entity and EIN exist, and run every license fee, product order and rent payment through it. The Department of Revenue registrations, the unemployment wage reports and the biennial entity report all assume the business can show its own books, and a clean account is the cheapest compliance tool in this guide.
Sales tax through the Department of Revenue
Indiana sets its sales tax at a flat 7 percent statewide, and no city or county adds a local sales tax on top of it (IC 6-2.5-2-2). The tax itself is a gross retail tax on retail transactions, which the statute defines around sales of tangible personal property and a specific list of enumerated transactions (IC 6-2.5-2-1 and IC 6-2.5-4-1). Personal services are not on that list, so you do not collect sales tax on haircuts, color services, styling or any other service receipt. Product is different: shampoo, styling products and anything else you sell off the shelf is a retail sale taxed at 7 percent, so itemize services and products separately at checkout and the tax follows the product lines only.
Any business making retail sales needs a Registered Retail Merchant Certificate before its first retail transaction. Registration runs on the Department of Revenue's Business Tax Application, Form BT-1, filed through INBiz, and the filing fee is $25 per business location under IC 6-2.5-8-1. The certificate is valid for two years and renews automatically while the account stays in good standing, and returns and payments run through INTIME, the Department's e-services portal. Register before you open: the same BT-1 also opens the withholding account you will need the day you hire.
Booth rent and chair rental in Indiana
Indiana settles the booth rent licensing question in the statute itself. IC 25-8-7-7 provides that the board may not require a beauty culture professional to obtain a license under the salon chapter if she has leased or subleased a portion of a beauty culture salon from a person licensed under that chapter. Read plainly: there is no booth renter license in Indiana, and a renter needs no establishment license of her own. She works inside your licensed salon on her own cosmetologist license, which she posts at her station, and your salon license covers the premises for both of you. If she wants her own name on an establishment license for her own space, she is no longer renting a booth; she is opening a salon, or working the salon suite model covered in that guide.
The licensing answer is the easy half, because it is the only half the cosmetology code decides. Whether a chair renter is an independent contractor or your employee for tax and unemployment purposes is a separate question, answered under the control based tests the IRS and the Department of Workforce Development apply to the actual arrangement: who sets the hours, who sets the prices, whose clients they are, and who can end the relationship. A written rental agreement is evidence, not a verdict. If you rent chairs, paper the arrangement like a real tenancy, with a lease, a set rent that does not float with her service revenue, her own assumed business name filing and her own tax registrations, and let the substance match the paper.
Hiring employees in Indiana
Your first hire registers you as an employer in two places. The Department of Revenue takes your withholding registration on the same BT-1 application filed through INBiz, covering state and county income tax withholding, with returns filed through INTIME. The Department of Workforce Development runs the unemployment insurance account, and registration happens online through Uplink Employer Self Service in the first quarter your business qualifies as an employer; electronic filing and payment are mandatory, and wage reports come due every quarter whether or not you had payroll. Unemployment premiums are charged on the first $9,500 of each employee's wages per calendar year. A new employer starts at the typical rate of 2.5 percent, which caps the cost at $237.50 per employee per year, and then moves onto merit rates based on the business's own claims history, which run from 0.50 percent to 7.40 percent for employers in good standing under the Department of Workforce Development's Employer Handbook.
The wage floor is $7.25 an hour, where Indiana's minimum wage has stood since July 24, 2009 under the Indiana Minimum Wage Law, matching the federal floor. Stylists who regularly receive tips can be paid a cash wage of at least $2.13 an hour if you claim a tip credit, but if tips plus the cash wage fall short of $7.25 in any week, the business makes up the difference dollar for dollar. Overtime runs at one and one half times the regular rate past 40 hours in a work week, and Indiana lets you pay $4.25 an hour to employees under 20 during their first 90 consecutive days on the job.
Local rules for an Indiana hair salon
The local layer starts with the permits the salon license itself points to: the building permit, certificate of occupancy and zoning approvals under IC 22-15-3 and IC 36-7-4 come from your city or county, and the board expects them in place before the salon operates. Signage, parking, occupancy limits and any local business registration live at that level too, and they differ enough between an Indianapolis storefront, a Fort Wayne strip center and a home based salon in a small town that no state guide can price them for you. One Indiana distinction is worth knowing before you call city hall: county health departments in Indiana permit body art, not hair salons, so there is no county health permit layer on a hair salon the way there is in some states.
Get the zoning answer and the inspection sequence in writing before you sign the lease. Every state license in this guide is issued for a specific address, the salon application starts a three month temporary permit clock the moment it is complete, and a move restarts parts of the stack. The cheapest week in the whole project is the one spent confirming that the space can legally be a salon before the application goes in.
Insurance for an Indiana hair salon
The board's rules do not publish a required insurance amount for a beauty culture salon, so treat insurance as a risk decision and a lease decision rather than a licensing line item. In practice, a landlord will name the coverage he expects in the lease, and a business working on clients should carry professional liability for the services themselves, general liability for the premises, and property coverage for equipment and retail stock. If other licensees work inside your premises under your salon license, your policy and theirs should both name the arrangement, because the salon license holder is the name the board and an injured client find first when something goes wrong in any chair, table or room in the building.
Your Indiana renewal calendar
| Item | Cycle | Fee |
|---|---|---|
| Cosmetologist license | Every 4 years | $40 renewal; $50 late fee inside three years; $80 reinstatement beyond three years |
| Beauty culture salon license | Every 4 years | $40 renewal |
| Business Entity Report | Every 2 years, by the end of the formation month | $32 online or $50 by mail |
| Assumed business name | No renewal; stays on file until discontinued | Filed once, $20 online or $30 by mail for entities |
| Unemployment wage reports | Quarterly through Uplink Employer Self Service | 2.5 percent new employer rate on the first $9,500 of wages |
| Sales tax returns | Filed through INTIME on the Department of Revenue schedule | 7 percent on retail product sales only |
Official sources
- State Board of Cosmetology and Barber Examiners: licensing information, hours, fees, salon and renewal instructions
- State Board of Cosmetology and Barber Examiners: statutes and rules compilation, IC 25-8 including sections 1.1-1, 1.1-2, 4-4, 4-17 and 7-7
- INBiz: Secretary of State business filings, Articles of Organization and Business Entity Reports
- Secretary of State: enhanced access fee schedule for business filings
- IC 23-15-1: assumed business names, county recorder and Secretary of State filings and fees
- Indiana Department of Revenue: sales tax, Registered Retail Merchant Certificates and withholding
- Department of Workforce Development: Unemployment Insurance Employer Handbook, rates and wage base
- Indiana Department of Labor: Indiana Minimum Wage Law poster, $7.25 and the $2.13 tip credit wage
Indiana hair salon FAQ
How many hours of school does an Indiana cosmetologist need?
1,500 hours at an Indiana approved beauty culture school, or the equivalent through a U.S. Department of Labor registered apprenticeship, followed by the written examination administered through PSI. The application fee is $40, and the license renews every four years for $40.
What license does the salon itself need in Indiana?
A beauty culture salon license from the State Board of Cosmetology and Barber Examiners: $40 to apply and $40 to renew every four years. A complete application issues a temporary permit valid for three months, and the salon must be under the personal supervision of a licensed beauty culture professional.
Do Indiana salons collect sales tax on haircuts?
No. Indiana's 7 percent sales tax falls on retail sales of tangible personal property and a list of enumerated transactions, and beauty services are not on that list. Retail product you sell off the shelf is taxed at 7 percent, and there is no local sales tax anywhere in Indiana.
Can a booth renter work in my Indiana salon?
Yes. Under IC 25-8-7-7 the board may not require a beauty culture professional who leases or subleases part of a licensed beauty culture salon to hold a separate salon license, so there is no booth renter license in Indiana. The renter works under your salon license on her own cosmetologist license.
How much does an LLC cost for an Indiana salon?
The Articles of Organization cost $95 filed online through INBiz or $100 by mail. The Business Entity Report costs $32 online or $50 by mail and comes due every two years, by the end of the month in which the LLC was formed.