How to Start a Hair Salon in Minnesota

Who licenses hair salons in Minnesota

Hair salons answer to the Board of Cosmetology, formally the Board of Cosmetologist Examiners, under Minnesota Statutes chapter 155A and Minnesota Rules chapter 2105. The Board licenses six practitioner types, salon managers, instructors, salons and schools, and it licenses salons in five types matched to the services offered: cosmetology salon, nail salon, esthetician salon, advanced practice esthetician salon and eyelash extension salon. A hair salon takes the cosmetology salon license, the broadest of the five, and a salon may hold more than one type when its menu crosses lines.

Minnesota is a mandatory practice act state: under section 155A.29, cosmetology services for compensation may be offered only by a licensee working in a licensed salon, apart from narrow statutory exceptions. The fee schedule, the penalties and the expiration dates all live in section 155A.25, which is why this guide can price nearly everything from one section of statute. The Board also inspects salons, and its penalty schedule is not decorative: an expired salon found on inspection draws up to $500, and a practitioner working on an expired license draws up to $200.

Minnesota hair salon at a glance

The cosmetologist license, step by step

The cosmetologist is Minnesota's broad license, covering cosmetic care of the hair, nails and the surface of the skin. Rule 2105.0145 sets the route: be at least 17, complete 1,550 hours of training at a Minnesota licensed cosmetology school, and pass three board approved tests, a general theory test, a written practical test, and a test on Minnesota laws and rules, with passing results no more than one year old when you apply. Your school documents the hours on a course completion certificate signed by the school manager or owner.

The license itself costs $195 for the first three years, split in the statute as a $155 license fee and a $40 application fee. Renewal costs $115, and Minnesota licenses expire on a personal calendar: your license ends on the last day of your birth month in the year it falls due. Renewal also requires continuing education under section 155A.271: four core hours, one hour of state laws and rules and three hours of health, safety and infection control, plus a separate four hour course in professional practice topics within your scope, for 8 hours in each cycle. The Board audits randomly, so keep the certificates.

Two shorter hair routes sit next to the cosmetology license and matter when you hire. The hair technician license, created in 2023 and first issued July 1, 2024, covers hair only: 900 hours at a cosmetology school, split into foundations, cutting and styling, and chemical services, at the same $195 initial fee and three year cycle. A hair technician cannot touch nails or skin, so the two licenses staff differently. And a person who performs only hairstyling and makeup, work that stops short of cutting and chemical services, is exempt from licensing entirely if they complete a four hour health, safety and infection control and state law course from a board approved provider and carry proof of it, under section 155A.27, subdivision 9.

The salon license and the designated manager

The salon license is its own application, its own fee and its own three year cycle. Section 155A.29 requires the license before services are offered, and the initial cosmetology salon license costs $350, a $250 license fee plus a $100 application fee, with renewal at $225. The license expires on the last day of the month of initial licensure three years on, not on the owner's birthday. Before the Board issues it, the statute requires four things: compliance with all local and state laws, particularly on infection control, health and safety; appointment of a manager; evidence of compliance with the workers compensation law where it applies; and evidence of continued professional liability insurance of at least $25,000 for each claim and $50,000 total for each policy year for each practitioner.

The manager appointment is the Designated Licensed Salon Manager, and it is the structural fact of Minnesota salon ownership. The owner appoints one DLSM per salon and registers them with the Board on the application, with a notarized acknowledgment. The DLSM must hold an active salon manager license at the same level as the salon license, which for a cosmetology salon means a cosmetologist salon manager, a license earned by holding an operator license and passing the salon manager test. Under Rule 2105.0390, the owner and the DLSM are responsible for the salon at all times, even when neither is present: licenses current and posted, every practitioner licensed for the services they provide, and every practitioner, employees and independent contractors alike, working inside chapter 155A and the rules. The DLSM signs knowing civil penalties run up to $2,000 per violation.

Plan for the departure case before it happens. When a DLSM leaves, the salon notifies the Board in writing within 10 business days, and has 60 days to register a new DLSM. A one person salon solves the structure by making the owner the DLSM: hold the cosmetologist license, add the salon manager license, and register yourself. A salon without a registered DLSM is out of compliance no matter how clean its inspection looks.

Forming your business entity

Most Minnesota hair salon businesses form as a limited liability company under chapter 322C of the Minnesota Statutes, and Minnesota prices the filing by channel in a way that surprises people: Articles of Organization filed by mail cost $135, while the same filing online or in person costs $155. The filing is made with the Secretary of State and takes effect when accepted. Your Articles name the LLC, its registered office and agent, and the organizer, and the name must carry a limited liability company designator.

Every Minnesota LLC then files an Annual Renewal with the Secretary of State each calendar year, due by December 31, and the renewal itself is free: the fee schedule lists it at $0. Free is not the same as optional. An LLC that skips the renewal is administratively terminated, and bringing it back costs a reinstatement fee of $65 by mail or $85 online or in person, and the Secretary of State prints one more limit on the schedule: an entity inactive for more than six years cannot be reinstated online. Put the renewal on the same December calendar as your own year end close, and it never becomes a reinstatement.

Business names and the assumed name certificate

Minnesota's name filing is the Certificate of Assumed Name under chapter 333, and it is filed with the Secretary of State, not at a county office. Under section 333.01, no one may carry on a commercial business under a name that does not set forth the true name of every person interested in the business unless a certificate is on file, so a sole proprietor trading as a salon brand and an LLC whose storefront name differs from its legal name both file. The certificate costs $30 by mail or $50 online or in person on the Secretary of State's fee schedule, and the name on it may not borrow a designator like corporation or limited liability company unless the filer is authorized to use it.

Then comes the step Minnesota owners miss: publication. Section 333.01 requires the certificate to be published after it has been filed, in a qualified newspaper in the county in which you have your principal or registered office, for two successive issues, and section 333.02 requires the filing and the publication before you commence business under the name. The certificate also has to be kept alive: section 333.055 holds it in effect only while an annual renewal is filed in each calendar year after the filing year. The renewal is free, and an expired certificate can be reinstated at $65 by mail or $85 online. Keep the names consistent across the stack anyway: Secretary of State filings, the salon license, the sales tax account and your signage should tell one story.

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. Minnesota keys its registrations to the federal number: the Department of Revenue issues your Minnesota tax ID when you register the business for sales tax and withholding, and your unemployment insurance employer account with the Department of Employment and Economic Development runs on the same identity.

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 quarterly unemployment wage reports, sales tax returns, renewals and Board fees 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

Minnesota taxes retail sales and a short statutory list of services, and hairdressing is not on the list. The Department of Revenue's Personal Services guidance states the split for this industry directly: barber shop and salon services are not taxable, including cutting, coloring, highlighting, perming, trimming and styling hair, extending and restoring hair, hair removal and waxing, shaving, and shampooing and conditioning treatments. You collect no sales tax on the service ticket, full stop.

The retail shelf is the opposite. Beauty and cosmetic product sales are taxable: hair products, makeup, skincare products, wigs and hair pieces you sell are retail sales at the 6.875 percent state rate plus the local taxes at your address. Buy that inventory without paying tax by giving your supplier a completed Form ST3, Certificate of Exemption, claiming the resale exemption, and owe the tax only when you sell. The mirror image catches new owners: the supplies you consume while providing services, and your tools and equipment, are taxable purchases, because they are not resold. Keep the lines separate at the register, and register with the Department of Revenue for a Minnesota tax ID before your first taxable sale; the same registration opens your withholding account when you hire.

Booth rent in a Minnesota hair salon

Minnesota handles chair rent inside the salon license rather than beside it. A booth renter working in your salon works in a licensed salon, so no second salon license attaches to the chair, and the renter needs no premises filing of their own. What they need is their own active practitioner license for the services they sell, displayed in the salon. Your side of the structure is heavier than in most states: under Rule 2105.0390, the owner and the DLSM must ensure that all practitioners, including nonemployees, who perform licensed services in the salon comply with chapter 155A and the rules, and the salon keeps the work time records of each licensed practitioner on the premises as section 177.30 requires.

The limits of that shelter decide the suite question. The salon license covers the premises and the people working under it; a renter who steps outside your licensed space, or who runs a separate business the public experiences as its own salon, is no longer inside your license. A lockable suite with its own clientele, prices and door is its own salon in Minnesota's structure, needing its own salon license and its own designated manager, which is why the suite guide in this cluster treats the suite as a small salon rather than a chair. The tax classification question is separate and runs on control, not on the label in the lease: paper a real tenancy like a tenancy, with written terms and set rent.

Hiring employees in Minnesota

Your first hire makes you a Minnesota employer on several tracks at once. Register with the Department of Revenue for wage withholding, and with the unemployment insurance program administered by the Department of Employment and Economic Development. New employers are assigned a tax rate based on the average for their industry; for 2026 the published new employer rates run from 1 percent up to the 8.9 percent maximum, paid quarterly on each employee's wages up to the 2026 taxable wage base of $44,000. The 2026 rate stack adds a 0.40 percent base tax rate and a 14 percent additional assessment on the tax due, and the quarterly wage detail report is due whether or not any tax is owed. Workers compensation coverage belongs on the same checklist, and for a licensed salon it is a licensing document as well: section 155A.29 asks for evidence of compliance with the workers compensation law where it applies.

Minnesota sets its own wage floor and allows no tip credit against it. From January 1, 2026, the state minimum wage is $11.41 an hour for every employer, and tipped stylists are owed the full rate before tips. A training wage of $9.31 an hour may be paid to employees under 20 for their first 90 consecutive days of employment. Cities layer on top where they have set their own rates: Minneapolis requires $16.37 an hour in 2026 for all employers, and St. Paul phases by employer size, with small employers reaching $16.37 on July 1, 2026, so the wage floor is a property of the address where the work happens.

Local rules for a Minnesota hair salon

The local layer sits underneath every state filing in this guide. Zoning controls whether a hair salon can operate at the address you choose, and cities add occupancy approvals, sign rules and, in many places, a local business license on top of the state layer. Two state rules shape the site search itself: a salon may not be located in a room used for residential purposes, and a salon in the practitioner's residence must be completely partitioned off from the living quarters, under section 155A.29. A mobile salon is possible but carries its own conditions, a permanent business address and advance notice to the Board of its locations and schedule of operation.

Get the zoning answer in writing before the lease is signed. The salon license belongs to the location and the owner named on the application, so a change of address or ownership means a new application rather than an edit, and the sales tax account, the insurance evidence and the DLSM registration all have to describe the same room. Rent on a space the city will not clear for salon use is the most expensive mistake in this guide.

Insurance for a Minnesota hair salon

Minnesota is one of the few states in this series that writes an insurance floor into the salon license itself. Section 155A.29 makes evidence of continued professional liability insurance a condition of the salon license: at least $25,000 for each claim and $50,000 total coverage for each policy year, for each practitioner. That floor covers everyone working under the license, which is one more reason the salon's policy and the salon's roster of practitioners, employees and booth renters alike, need to match on paper.

Treat the statutory floor as a floor, not a target. Chemical services, hot tools and slip hazards around shampoo bowls are the everyday risks professional liability is priced for, and most landlords name higher limits in the lease than the statute names. General liability for the premises and property coverage for equipment and retail stock complete the standard stack.

Your Minnesota renewal calendar

Official sources

• Board of Cosmetology: licensing, salon applications and license lookup
• Minnesota Rules 2105.0145: training hours, tests and applicant requirements
• Minnesota Statutes 155A.25: license fees, penalties and expiration dates
• Minnesota Statutes 155A.29: salon licensing conditions, insurance floor and mobile salons
• Minnesota Statutes 155A.271: continuing education, 4 core hours plus 4 practice hours
• Board of Cosmetology: salon license application and the DLSM acknowledgment
• Secretary of State: business filing and certification fee schedule
• Minnesota Statutes 333.01 and 333.02: the assumed name certificate and publication
• Department of Employment and Economic Development: unemployment tax rates for 2026
• Department of Labor and Industry: 2026 minimum wage, state and city rates

Minnesota hair salon FAQ