How to Start a Barbershop in Montana

Who regulates barbershops in Montana

Barbers answer to the same regulator as cosmetologists: the Board of Barbers and Cosmetologists, in the Business Standards Division of the Montana Department of Labor and Industry, administering Title 37, chapter 31 of the Montana Code Annotated. There is no separate barber board and no separate barbering premises license; a barbershop is licensed as a salon or shop, and its chairs are staffed by barbers, barbers nonchemical, or cosmetologists working inside their own scopes. The board's fees are set by rule at ARM 24.121.401, adopted effective November 22, 2025, which prices both barber licenses at $100 for a two year term, the salon or shop license at $125, the salon inspection at $150, and the booth rental license at $95.

The rest of the setup sits outside the board. The Secretary of State takes the LLC filings, the April 15 annual report and the assumed business name registrations. The Department of Revenue runs income tax and employer withholding and confirms that Montana has no general sales tax. The Department of Labor and Industry's wage and unemployment divisions govern the shop's payroll from the first hire, and your city or county controls zoning, signage and the building. One boundary matters for shops adding services: tattooing and permanent makeup sit outside chapter 31 entirely, with the Department of Public Health and Human Services, so a barbershop adding a tattoo chair adds a second regulator, covered in the Montana microblading guide.

Montana barbershop at a glance

The two barber licenses, step by step

Section 37-31-101 defines barbering by its services: shaving or trimming a beard; cutting, styling, coloring or waving hair; straightening hair by the use of chemicals; giving facial or scalp massages; shampooing hair, applying hair tonic, or bleaching or highlighting hair; and applying cosmetic preparations, antiseptics, powders, oils, lotions or gels to the scalp, face, hands or neck, all performed for payment for tonsorial purposes. The standard barbering license under section 37-31-304 requires 1,100 hours of education in a licensed school, with the applicant at least 18 years old, of good moral character, and holding a high school diploma or its equivalent, followed by the board's examinations and the $100 license fee. The school route is regulated by the same board under section 37-31-311, which sets the 1,100 hour floor for the barbering curriculum and requires the school to furnish a $5,000 bond.

The second license is where Montana differs from most states. Barbering nonchemical is defined as the practice of barbering excluding the use of chemicals to wave, straighten, color, bleach or highlight hair, and it takes 900 hours instead of 1,100. A nonchemical barber can run a classic cut and shave shop at full scope; what he cannot do is put a chemical service on the menu, and a shop that hires across both licenses has to schedule chemical work only to the chairs whose licenses reach it. The 200 hour gap between the two curricula is, in effect, the price the state puts on chemical services, and a barber who starts nonchemical and later wants the full scope should expect to return to school for the difference rather than test into it.

Two other routes feed the same chairs. Endorsement under section 37-31-304 allows licensure without examination for an applicant licensed in another state whose hour requirement equals or exceeds Montana's and whose license is current and undisciplined; Montana belongs to no cosmetology licensure compact, so endorsement is the relocation mechanism. And the registered apprenticeship pathway created by House Bill 336 in 2025, implemented by the board's rule at ARM 24.121.620 effective November 22, 2025, lets a barbering apprentice train in a licensed shop under a licensed mentor while registered through the Department of Labor and Industry's Registered Apprenticeship Program. Cosmetologists, at 1,500 hours, may also staff barbershop chairs inside the cosmetology scope, which includes the haircutting and shaving adjacent services named in the cosmetology definition; the hiring question is scope and menu, not the sign over the door.

The salon or shop license for your premises

Montana does not issue a barbershop license as such. Section 37-31-302 makes it unlawful to manage or operate a salon or shop without a license, and the barbershop takes the salon or shop license like any other establishment where the chapter 31 practices are performed. The application carries the $125 license fee and the $150 inspection fee together, because a new shop is inspected as part of being licensed, and the license renews every July 1 at $125 on the annual premises calendar. The same framework covers mobile salons and shops, so a barber running a mobile unit is licensed under the salon or shop umbrella rather than under a separate mobile category.

The license belongs to the location and the operator named in the application. Moving the shop to a new address requires a new salon or shop license application, and so does an ownership change of more than 50 percent, which means a buyout, a relocation or a major partner restructuring all belong on the licensing calendar before they belong on the moving calendar. The premises definition in section 37-31-101 also governs the home based shop: a room in a residence is outside the salon or shop definition while it serves only residents, but once it serves nonresidents for compensation it must be licensed as a salon or shop, inspection and July 1 renewal included, and the shop's owner may not employ anyone in the licensed practices who does not hold a license of their own.

Forming your business: the LLC

Most Montana barbershops form a limited liability company under Title 35, chapter 8. Formation is one filing: Articles of Organization to the Secretary of State's Business Services division through the online filing portal, for $35, naming the company and its registered agent in Montana. The upkeep filings are cheap: $15 to correct or amend the articles, no fee to terminate, and a $5 certificate of existence when a landlord or lender wants proof of standing. A series LLC pays $50 more for each series member named, a structure a single shop will rarely need.

The recurring obligation is the annual report, due April 15 each year. The Secretary of State's fee schedule waives the fee when the report is filed by April 15 and charges $35 when it is filed after, and a company that lets reports lapse faces reinstatement at $35 plus $35 for each delinquent year. The report keeps the entity alive on the register, and with it the liability shield that the shop's lease, bank account and salon or shop license application all assume.

Registering your shop name

A barbershop trading under a name other than its legal name registers an assumed business name with the Secretary of State under Title 30, chapter 13, part 2, for $20. The registration is effective for five years under section 30-13-206 and renews for another five year term at $20, with the Secretary of State notifying registrants before the term runs out. Amending the registration costs $20 and canceling it is free. A $10 name reservation can hold a name while the company is being organized, but it is not the registration itself, and the two filings run on different clocks from the LLC's April 15 annual report, so the shop's name paperwork and entity paperwork will never come due in the same week unless they were filed that way.

Getting your EIN

The Employer Identification Number is the federal tax identity for the business, issued free by the IRS. A barbershop with employees needs one before the first payroll, because Montana withholding and unemployment reporting key off it, and a single member LLC that elects corporate tax treatment or opens a business bank account will be asked for one as well. Apply on the IRS site, keep the number with the LLC records, and use the same legal name on the EIN record, the Secretary of State filings and the board's shop license application so the three files match when an inspector or a lender compares them.

Sales tax: the tax Montana does not have

Montana has no general sales tax, and the Department of Revenue's sales tax guidance for Montana businesses and residents says so directly. For a barbershop that means no sales tax permit, no register programming, and no tax collected on a cut, a shave or a bottle of pomade sold off the shelf, because the state levies no general tax on any of them. The price on the service menu is the amount the client pays, which keeps a Montana shop's pricing simpler than in almost any other state in this library.

The qualifications are the same three that apply to every Montana trade. Income tax still reaches the shop's profits, on the owners' returns for a pass-through LLC, and employers still register for withholding and unemployment insurance as the hiring section describes. Designated resort communities and resort areas may levy a local resort tax on luxury goods and services, and a shop in a resort town should confirm whether its retail sales sit inside that tax. And products shipped to customers in other states carry those states' rules with them; Montana's clean register ends at the state line.

Chair rent in Montana: the renter holds his own license

Chair rent in a Montana barbershop is a licensed status, not a handshake. Section 37-31-101 defines a booth as any part of a salon or shop rented or leased for performing the licensed services, and section 37-31-302 makes it unlawful to manage or operate a booth without a booth rental license. The license is the renter's own: $95 to apply, $95 to renew, on the annual July 1 premises calendar. The board's conditions define the model: the renter must hold a current Montana practice license in good standing, barbering included, and must not be employed by the owner of the shop as employment is defined in the unemployment statute at section 39-51-204(1)(e).

That definition was practically written for barbershops, and it names barbers expressly. It excludes a licensed barber's or cosmetologist's service from employment when the licensee has acknowledged in writing that he is not covered by unemployment insurance and workers' compensation, contracts with the shop, and the contract shows he is free from all control and direction of the owner, receives payment from his own clientele, and leases, rents or furnishes all of his own equipment, skills and knowledge, with the agreement capable of supporting a breach of contract action. A shop that wants renters should draft to those elements; a shop that wants employees should hire under the shop license and take the payroll obligations in the next section. The salon suite guide examines the renter's side of this structure in full.

Hiring barbers: wages, unemployment and withholding

Montana's minimum wage is $10.85 an hour from January 1, 2026, set under the annual inflation adjustment in section 39-3-409; the Department of Labor and Industry recalculates it every fall, and the 2025 rate was $10.55. Montana allows no tip credit, so a tipped barber is paid the full $10.85 an hour in wages with tips on top, and the only lower tier, $4.00 for businesses outside federal coverage with gross volume of $110,000 or less, will rarely fit an operating shop. A barber paid by commission is an employee for these purposes when the shop controls his schedule, prices and clients; the booth rental license, not a label, is what makes a chair independent.

Hiring triggers three registrations. The shop registers with the Unemployment Insurance Division and pays contributions on the first $47,300 of each employee's wages in 2026, the wage base set at 80 percent of the state average annual wage. New employers start at their industry's average rate: for 2026, on Schedule I, the services industry rate is 1.10 percent, plus the 0.18 percent Administrative Fund Tax every employer pays. The shop also registers with the Department of Revenue for withholding, through the Montana Business Registration form or the TransAction Portal, with each employee completing Form MW-4 and the year reconciled on Form MW-3. New hires are reported to the Department of Labor and Industry within 20 days, and the shop carries workers' compensation coverage through the Montana State Fund or a private insurer.

The local layer: cities, zoning and premises

The state licenses the shop; the city decides where it can be. Zoning approval for a personal services use, any local business license or registration the city requires, building and signage permits, and occupancy inspections run through the city or county where the premises sit. Barbershops feel the signage layer more than most trades, since the pole and the blade sign are often the whole storefront, so sign permits belong in the opening checklist rather than the first month. In a designated resort community, add the local resort tax question from the sales tax section to the same visit.

Premises facts carry licensing consequences. The salon or shop license is tied to the location and operator in the application, so a move or a greater than 50 percent ownership change requires a new application and inspection rather than an amendment. The residence rule in section 37-31-101 governs the garage and home shop conversions barbers often ask about: a room in a home is outside the definition only while it serves residents, and the first paying nonresident client makes it a salon or shop that must be licensed, with local home occupation zoning as the second gate.

Insurance for a Montana barbershop

Nothing in chapter 31 conditions the shop's licenses on carrying liability insurance, so coverage is a business judgment apart from one obligation: workers' compensation, which a shop with employees carries through the Montana State Fund or a private insurer. The standard voluntary stack is general liability for the premises, professional liability for the services each license covers, and property coverage for chairs, tools and retail inventory, with the lease usually naming the landlord as an additional insured. Shops running the chair rental model should require each booth renter to carry his own professional liability policy, because the licensing structure makes the renter a separate operator inside premises your name is on.

What it costs to open a Montana barbershop

The state level costs sit in two fee schedules. Licensing: the $125 salon or shop license fee and the $150 inspection fee at application, $100 for each barber license that is not already held, and $95 for each booth renter's own license on the rental model. Formation: $35 for the LLC's Articles of Organization, $20 for the assumed business name if the shop trades under a different name, and nothing for the EIN. Recurring state costs then follow the calendar: the shop license renews at $125 every July 1, booth licenses at $95 each, barber licenses at $100 every two years, and the LLC annual report costs nothing when filed by April 15.

Beyond the schedules, costs are local and commercial: the lease, the chairs and plumbing, the tool and product orders, the sign, and the insurance stack. Montana's contribution is what it leaves out. With no general sales tax to collect or remit and no sales tax permit to maintain, a Montana barbershop's register and bookkeeping carry one less tax system than the same shop in almost any other state covered by this library.

Renewal and filing calendar

The rhythm of a Montana barbershop year is a March in which the barbers renew, an April entity report, and a July 1 on which every premises license in the building comes due at once.

Official sources

• Board of Barbers and Cosmetologists: the board's licensing pages for barbers, salons and shops, and booth renters, and the adopted fee rule at ARM 24.121.401.
• MCA 37-31-101: the definitions of barbering and barbering nonchemical, booth, and salon or shop.
• MCA Title 37, chapter 31: license requirements at section 37-31-302 and qualifications and hours at section 37-31-304.
• Secretary of State, Business Services filing fees: Articles of Organization at $35, the annual report terms, and assumed business name registration at $20.
• Department of Revenue, sales tax guidance: the department's statement that Montana does not have a general sales tax.
• Department of Labor and Industry, 2026 minimum wage determination: the $10.85 rate effective January 1, 2026 under MCA 39-3-409.
• Unemployment Insurance Division, contribution rates: the 2026 taxable wage base of $47,300 and the industry rates for new employers.
• IRS, apply for an EIN: the free federal application.

Montana barbershop FAQ