How to Start a Hair Salon in Montana

Who regulates hair salons in Montana

The licensing authority is the Board of Barbers and Cosmetologists, a board in the Business Standards Division of the Montana Department of Labor and Industry. The board administers Title 37, chapter 31 of the Montana Code Annotated, which licenses barbering, barbering nonchemical, cosmetology, electrology, esthetics and manicuring, and licenses premises and schools alongside people. Its fees are set by rule at ARM 24.121.401, adopted effective November 22, 2025: $100 for each practice license, $125 for the salon or shop license, $150 for the salon inspection, and $95 for a booth rental license. One warning belongs at the front of any Montana research: parts of the board's website, including its cosmetologist page and an application checklist dated August 2024, still print the superseded $80 practice fee. Where a board web page and the adopted rule disagree, the rule governs, and this guide prints the rule.

The rest of the setup sits outside the board. The Secretary of State's Business Services division takes the LLC filings, the annual report and the assumed business name registrations. The Department of Revenue runs income tax and employer withholding, and publishes the guidance confirming that Montana has no general sales tax. The Department of Labor and Industry's other divisions set the indexed minimum wage and run unemployment insurance. Your city or county controls zoning and the building, and, if the salon sits in a designated resort community, the local resort tax. One boundary deserves emphasis: chapter 31 does not reach tattooing or permanent makeup, which the board expressly leaves to the Department of Public Health and Human Services, so a salon adding a microblading chair adds a second regulator, covered in the Montana microblading guide.

Montana hair salon at a glance

The cosmetologist license, step by step

The cosmetologist license is the full scope credential under chapter 31. Section 37-31-101 defines cosmetology as work included in hairdressing, manicuring, esthetics and beauty culture, done for the embellishment, cleanliness and beautification of the hair and body, which is why one license can staff the cutting floor, the color bar, the nail station and the facial room. Section 37-31-304 sets the qualifications: at least 18 years old, good moral character, a high school diploma or its equivalent, and 1,500 hours of cosmetology education in a licensed school. The school is licensed by the same board under section 37-31-311, which sets the same 1,500 hour curriculum floor and requires a $5,000 bond. On finishing the hours, the candidate passes the board's examinations and pays the $100 license fee.

Two newer routes deserve a place in a hiring plan. Endorsement under section 37-31-304 licenses an applicant without examination when she is already licensed in another state whose hours equal or exceed Montana's and whose license is current and undisciplined; Montana is not part of a cosmetology licensure compact, so endorsement is the relocation mechanism. The registered apprenticeship created by House Bill 336 in 2025, implemented by the board's rule at ARM 24.121.620 effective November 22, 2025, lets an apprentice train in a licensed salon under a licensed mentor while registered through the Department of Labor and Industry's Registered Apprenticeship Program. Either route ends at the same license: $100 for a two year term, renewing March 1, with late online renewal for 45 days after the deadline at a late fee equal to 100 percent of the renewal fee.

Two neighboring credentials matter to staffing. The esthetician license, at 650 hours, covers skin care and temporary hair removal but no hair services, and the manicurist license, at 400 hours, covers nails, hands and feet only, so a full service salon is built on cosmetologists with specialists layered in where the menu justifies them. Instructors are licensed separately, the active instructor license at $115 under the same fee rule. What the chapter does not contain is any lash credential or endorsement: its definitions never name eyelash services, a silence the Montana lash studio guide examines in full.

The salon or shop license for your premises

Section 37-31-302 makes it unlawful to manage or operate a salon or shop without a license, and unlawful for a salon owner to employ an unlicensed person in any of the six licensed practices. The premises license is the salon or shop license, and the board's application carries two fees at once, the $125 license fee and the $150 inspection fee, because a new salon is inspected as part of being licensed. The license renews every year on July 1 at $125, on the annual premises calendar the salon shares with every booth rental license inside it. The same application framework covers mobile salons and shops, licensed under the salon or shop umbrella rather than as a separate category.

Two life events reset the license instead of renewing it. If the salon moves to a new location, a new salon or shop license application is required; the license does not travel with the business. The same is true when ownership changes by more than 50 percent, so a relocation, a buyout or a partner restructuring should be sequenced ahead of the move, since the premises may not operate on the old license at the new address. Section 37-31-101 adds a definition worth knowing before signing a lease: a salon or shop is the physical location where a licensee practices, and a room in a place of residence counts as one only when it serves nonresidents for compensation, in which case it must be licensed like any storefront.

Forming your business: the LLC

Most Montana salons form a limited liability company under the Montana Uniform Limited Liability Company Act, Title 35, chapter 8. Formation is a single filing: Articles of Organization submitted to the Secretary of State's Business Services division, online through the state's business filing portal, for $35. A series LLC pays $50 more for each series member named in its articles. The articles name the company and its registered agent, the person or service in Montana who receives legal papers for it. The follow-on filings are cheap and rare: $15 to correct or amend the articles, $20 to merge, no fee at all to terminate, and a $5 certificate of existence when a landlord or lender asks for proof the company is on the register.

The annual obligation is the annual report, due April 15 each year. The Secretary of State's fee schedule prints the LLC report terms in a way every owner should read twice: the fee is waived when the report is filed by April 15, and $35 when it is filed after April 15. A company that lets its reports lapse entirely faces reinstatement at $35 plus $35 for each year of delinquent reports, on top of losing the good standing its lease, its bank and its salon license application assume. The report itself is short; its function is to keep the entity, and with it the liability shield the lease and the licenses sit inside, alive on the register.

Registering your salon name

Montana calls a trade name an assumed business name, and registration runs through the Secretary of State rather than the county. Any person or entity doing business under a name other than its legal name registers that name under Title 30, chapter 13, part 2, for a $20 registration fee. The registration is effective for five years under section 30-13-206, and it renews for another five year term at the same $20, with the Secretary of State notifying registrants before the term expires so the renewal is not left to memory. Amending a registration costs $20, and canceling one is free.

Two practical points follow. A name reservation is a different, cheaper instrument: $10 holds a name while the entity is being organized, and it is not a substitute for the registration once the salon is trading. And the registration and the LLC run on separate clocks, the annual report every April 15 against the name's own five year term, so a salon formed and named on the same day still renews the two on different cycles. Search the Secretary of State's business records before filing either one, because a name that is not distinguishable from an existing record will be rejected.

Getting your EIN

The Employer Identification Number is the federal tax identity for the business, issued free by the IRS. A salon 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 salon license application so the three files match.

Sales tax: the tax Montana does not have

Montana is one of the few states with no general sales tax, and the Department of Revenue says so in terms: its sales tax guidance for Montana businesses and residents states that Montana does not have a general sales tax, which is why the federal Wayfair decision changed nothing for Montana buyers or sellers inside the state. For a salon the consequence is simple and total. There is no sales tax permit to obtain, no rate to program into the register, and no tax to collect on a cut, a color service or a bottle of shampoo sold off the retail shelf. The price on the service menu and the price on the shelf are the amounts the client pays.

Three qualifications keep the picture honest. First, no sales tax is not no tax: the salon's profits are still subject to Montana income tax, on the owners' returns for a pass-through LLC, and employers still register for withholding and unemployment insurance as the hiring section describes. Second, designated resort communities and resort areas may levy a local resort tax on luxury goods and services under Title 7, chapter 6, part 15, and a salon in a resort town should ask the community and the Department of Revenue whether its retail sales sit inside that tax. Third, a salon that ships products to customers in other states steps into those states' collection rules on its own facts; Montana's exemption ends at the state line.

Booth rent in Montana: the renter holds her own license

Booth rent in Montana is a licensing category before it is a business arrangement. 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 operate a booth without a booth rental license. The license is the renter's own: $95 to apply and $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 one of the six chapter 31 practices, in good standing, 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). A license whose defining condition is that its holder is not your employee cannot be papered over with a contract that treats her as one.

That unemployment definition repays reading in full, because it is effectively Montana's booth rent statute. Section 39-51-204(1)(e) excludes a licensed cosmetologist's or barber's service from employment when the licensee has acknowledged in writing that she is not covered by unemployment insurance and workers' compensation, contracts with the salon, and the contract shows she is free from all control and direction of the owner, receives payment from her own clientele, and leases, rents or furnishes all of her own equipment, skills and knowledge, with the contract capable of supporting a breach of contract action. Build the written agreement around those elements from the first chair. An owner who wants employees instead hires licensees under the salon license and takes on the payroll obligations in the next section; the salon suite guide walks the renter's side of the arrangement in full.

Hiring stylists: wages, unemployment and withholding

Montana's minimum wage is $10.85 an hour from January 1, 2026, set by the Department of Labor and Industry under the annual inflation adjustment in section 39-3-409; the 2025 rate was $10.55, and the wage is recalculated every fall, so pay rates need a January check each year. Two features differ from most states. Montana allows no tip credit: a tipped stylist must be paid the full $10.85 an hour in wages, with tips on top. And businesses outside federal Fair Labor Standards Act coverage with gross annual volume of $110,000 or less fall under a lower $4.00 rate, a tier few operating salons will qualify for. Commission stylists are employees when the salon controls their schedules, prices and clients; it is the booth rental license and the written contract, not a label in a handbook, that makes a chair independent in Montana.

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

The local layer: cities, zoning and premises

The state licenses the salon; the city decides where it can be. Zoning approval for a personal services use, any local business license or registration your city requires, building and signage permits, and the occupancy and fire inspections all run through the city or county where the premises sit, on the local calendar rather than the board's. The one local tax that can reach a beauty business is the resort tax described in the sales tax section: it exists only in designated resort communities and resort areas, so a salon outside those boundaries has no local transaction tax at all.

Premises facts carry licensing consequences. The salon or shop license belongs to the location and the operator who applied for it: moving the salon or changing ownership by more than 50 percent requires a new application and a new inspection rather than an amendment, so a relocation belongs on the licensing calendar months ahead. The residence rule in section 37-31-101 cuts both ways for home based practice: a room in a home used only for residents is outside the salon definition, but the moment it serves paying nonresident clients it must be licensed as a salon or shop, with local home occupation zoning as the second gate to open.

Insurance for a Montana salon

Nothing in chapter 31 conditions the salon's licenses on carrying liability insurance, so coverage is a business judgment rather than a licensing step, with one exception: workers' compensation is an employment obligation, carried 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 equipment and retail inventory, with the lease usually naming the landlord as an additional insured. Owners using the booth rent model should require each renter to carry her 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 hair salon

The state level costs of opening are unusually legible in Montana, because nearly all of them sit in two fee schedules. On the licensing side: the $125 salon or shop license fee and the $150 inspection fee at application, the $100 cosmetologist license for each practitioner who does not already hold one, and $95 for each booth renter's own license on the rental model. On the formation side: $35 to file the LLC, $20 for the assumed business name if the salon trades under a name different from the company's legal name, and nothing for the EIN. Recurring state costs run on the calendar: the salon license renews at $125 every July 1, booth licenses at $95 each, practice licenses at $100 every two years, and the LLC annual report costs nothing when filed by April 15. Everything beyond the schedules is market cost, and Montana's range is wide, from a chair rental salon in a small town to a full build out in Bozeman or Whitefish: price the lease and tenant improvement work locally, carry product and equipment at supplier prices, and hold the first year payroll contributions at the new employer rates in the hiring section.

Renewal and filing calendar

The rhythm of a Montana salon year is a March in which the people 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 cosmetologists, salons and shops, and booth renters, and the adopted fee rule at ARM 24.121.401.
• MCA 37-31-101: the chapter's definitions, including cosmetology, booth and salon or shop.
• MCA Title 37, chapter 31: license requirements at section 37-31-302, qualifications and hours at section 37-31-304, and schools at section 37-31-311.
• 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 hair salon FAQ