How to Start a Hair Salon in North Dakota

Who regulates hair salons in North Dakota

The licensing authority is the State Board of Cosmetology, seven members appointed by the governor, administering North Dakota Century Code chapter 43-11. The board licenses the people, cosmetologists, estheticians, advanced estheticians, manicurists and instructors, licenses the schools that train them, and licenses the premises twice over: once as an establishment, and again for each independent licensee working inside it. House Bill 1126, enacted in 2025 and effective January 1, 2026, is the reason every fee and hour count in this guide differs from what older pages print: it cut the cosmetology course from the figure the old law carried, repriced the whole fee schedule at section 43-11-28, created the advanced esthetician license, and made the independent licensee a statutory category instead of a rule.

The rest of the setup sits outside the board. The Secretary of State takes the Articles of Organization and the annual report, and holds the trade name registry that the board's own establishment application points to. The Office of State Tax Commissioner issues the sales and use tax permit and the withholding account through ND TAP. Job Service North Dakota runs unemployment insurance, and Workforce Safety and Insurance is the sole source of workers compensation coverage. One boundary deserves emphasis: chapter 43-11 does not reach barbering, which sits under the Board of Barber Examiners in chapter 43-04, or microblading, which the Department of Health and Human Services treats as cosmetic tattooing, so a salon that adds either service adds a second regulator, covered in the North Dakota barbershop and microblading guides.

North Dakota hair salon at a glance

The cosmetologist license, step by step

The cosmetologist license is the full scope credential under chapter 43-11, and section 43-11-16 sets its terms. The training requirement is 1,500 hours in a board approved school program, the applicant must be at least 16 and have completed at least a tenth grade education or its equivalent, and the scope those hours buy is the whole salon menu as section 43-11-01 defines cosmetology: hair care, esthetics, work on eyelashes and eyebrows including extensions and tinting, hair extensions applied with chemical joining agents such as tape and keratin bonds, and manicuring. Natural hair braiding and threading are written out of the definition, which is why the braiding guide in this cluster reads so differently. On completing the hours, the candidate applies for examination under section 43-11-21 with proof of training, the examination fee set by the board's examination administrator, and the $50 original licensure fee.

The renewal clock is statewide and unforgiving in one specific way: every individual license expires on December 31, whatever month it was issued. Renewal costs $50 on the board's renewal form SFN 61745, and a renewal paid or postmarked after December 31 adds a $50 penalty per license. Reinstatement follows the ladder in section 43-11-29: within one year, the late fee plus the renewal fee restores the license; after one year but before five, the board also requires proof of passing the North Dakota law, rules and regulations examination; after five years there is no reinstatement at all, and the stylist applies again as an initial applicant. A licensee with 45 or more years of active licensure who is no longer practicing may hold legacy status at $25 a year with no continuing education, a provision most salon owners meet only when a founder retires.

Two features of the new law change how a salon staffs and plans. The first is continuing education: North Dakota historically renewed cosmetology licenses with no education requirement, but Administrative Code section 32-05-01-01 now requires each licensee to complete at least 4 hours of board approved continuing education annually beginning with the 2028 renewal cycle, starting the calendar year after the initial license issued, with the board free to name mandatory topics and at most one hour creditable to trade show attendance. Instructors owe 12 hours a year. The second is the apprenticeship route that House Bill 1126 authorized at section 43-11-16.1: registered apprenticeship and internship programs run through the state office of apprenticeship, with trainers who have held the license for at least three consecutive years and completed board approved educator training, under annual board audit and inspection, with a consumer notice posted in the establishment. The statute authorizes the route without printing a single total hour figure in the sections the board publishes, so this guide prints the school hours and leaves apprentice totals to the program paperwork itself.

The establishment license for your premises

The premises hold their own license, called an establishment license, and section 43-11-15 allows an establishment to be owned by any person authorized to do business in the state, licensed or not. The original license costs $150 and renews annually at $100, expiring December 31, under the fee schedule at section 43-11-28. The application is form SFN 11795, and its mechanics set the opening calendar: the original application must be notarized and submitted two weeks before the opening date, and the business name on it must already be registered with the Secretary of State as a trade name, an LLC, an LLP, or a corporation. Section 43-11-37 requires each new establishment to be inspected, with routine inspections afterward and additional inspections available after a violation, an ownership change, a late renewal, or probation, with a board set reinspection fee that section 43-11-28 caps at $75.

Management is where the establishment license bites. Administrative Code section 32-03-01-07 requires every salon to be supervised by a master licensee who is responsible for the management of the licensees, and the master licensee must be present on the salon premises during business hours. The master cosmetologist license itself, at section 43-11-26, requires evidence of at least 1,000 hours of practice as a cosmetologist under the direction and control of a master cosmetologist, plus the original licensure fee of $50. The practical consequence for a new owner is sequencing: either the owner earns the master license before opening, which takes the base license plus the supervised 1,000 hours, or the salon hires a master cosmetologist whose presence covers the floor. A salon open with no master licensee on the premises is out of compliance every hour it operates, and the rule gives the salon a second duty that feeds the pipeline: on request, a salon must provide documented hours for master license applications, which is how the next generation of masters proves the 1,000 hours.

The establishment holder also carries the renters by default. The application states the allocation in plain terms: as the holder of the establishment license, you are responsible for the safety and sanitation of the entire premises, and if a renter does not have a valid, current independent licensee license, that suite or chair falls under the establishment license and you are responsible for the sanitation of that space. The verification habit that follows from it is simple: collect a copy of every renter's independent licensee license at signing and again at each December renewal, because the board's allocation makes her paperwork your liability. Establishment licenses expire December 31 under section 43-11-29.1, reinstate within one year on the late fee plus the renewal fee, and after twelve months the establishment reapplies, with late penalties accruing at $100 per year expired.

Forming your business: the LLC

Most North Dakota salons form a limited liability company under Century Code chapter 10-32.1, and formation is a single filing: Articles of Organization submitted to the Secretary of State through the FirstStop portal for $135. The articles name the company and its registered agent and office in the state.

The annual obligation runs on a fixed statewide date rather than an anniversary. The LLC annual report costs $50 and is due November 15, and a report filed after November 15 draws a $50 late fee, doubling the cost of the filing for a missed week.

Registering your salon name

North Dakota registers trading names at the state level as trade names under Century Code chapter 47-25, and the cosmetology board makes the filing a licensing step rather than a branding preference. The establishment application will not proceed on an unregistered name: the business name must be registered as a trade name, LLC, LLP, or corporation with the Secretary of State before the board licenses the premises under it.

The filing is cheap and long lived. Registration costs $25 through the FirstStop portal, the registration expires every five years, and renewal costs another $25, with cancellation priced at $10.

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 federal withholding, the Job Service unemployment account, Workforce Safety and Insurance coverage, and new hire reporting all key off the business identity it anchors.

Sales tax: retail yes, services no

North Dakota's sales tax is a tax on retail sales, and the distinction runs in a salon's favor. The Office of State Tax Commissioner states the structure plainly: the state imposes sales tax on retail sales at a 5 percent state rate for most sales, plus city and county taxes where they apply, paid by the purchaser and collected by the seller.

The retail shelf is the other half of the rule. Shampoo, styling products and any other tangible personal property sold to a client are taxable retail sales at the combined rate for the salon's location, which is why a salon with retail holds a sales and use tax permit, registers and files through ND TAP, the Tax Commissioner's Taxpayer Access Point, and keeps its product purchases for resale separate from the back bar stock it consumes in services.

Booth rent in North Dakota: the independent licensee

North Dakota gives the chair renter her own license, and the license is the classification. Section 43-11-01 defines an independent licensee as a licensed individual who maintains a separate license and practices cosmetology, manicuring, esthetics or advanced esthetics at a location within, but separate from, a cosmetology establishment, bound by the same provisions of the chapter as an establishment.

The administrative rules add a freedom most rental states do not offer: an independent licensee operates under a lease agreement and may render services within the establishment and at various temporary or offsite locations, so the licensed renter can take the license to a wedding party or an event without stepping outside it, subject to the board's rules for practice away from a licensed establishment under section 43-11-11. Whether a chair arrangement is genuinely a rental or employment in substance still turns on the working facts for tax and wage purposes, who sets the schedule, the prices and the client relationship, but North Dakota hands both sides an objective marker: a stylist the salon calls independent should be holding the independent licensee license and filing her own taxes as a business, and a stylist working your hours at your prices without one reads as an employee the salon forgot to put on payroll, sitting inside your establishment sanitation responsibility besides. The license itself costs $150 originally and $100 on renewal, and the board's application states the employment position plainly: independent licensees are not employees of the licensed establishment.

Hiring stylists: wages, unemployment and reporting

The North Dakota minimum wage is $7.25 an hour under section 34-06-22, unchanged since July 24, 2009 and equal to the federal rate, with a tipped cash wage of $4.86 an hour, set at 33 percent of the minimum, for employees who receive tips. Overtime runs at one and one half times the regular rate after 40 hours in a workweek.

The payroll number that surprises out of state owners is the unemployment insurance wage base. Job Service North Dakota sets the taxable wage base at 70 percent of the statewide average wage, which produces $46,600 per employee for 2026, among the highest bases in the country. The rate on that base starts low: a new non-construction employer pays 1.00 percent with a positive balance, before experience rating moves it within a published range of 0.07 percent to 9.67 percent.

One employment habit North Dakota forbids outright is the noncompete. Section 9-08-06 provides that a contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind is to that extent void, and its only exceptions are a covenant tied to the sale of the goodwill of a business and covenants among partners, members or shareholders on a dissolution or ownership split, each confined to a reasonable area and time.

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 city business license your locality requires, building and signage permits, and occupancy inspections all run through the city or county where the premises sit, on the local calendar rather than the board calendar. Fargo, Bismarck, Grand Forks and Minot each run their own version of this layer, and the local sales tax add-on that applies to your retail sales is also set locally, so the combined rate programmed into the register is a fact about your address, not about the state.

Premises facts carry state licensing consequences as well. The establishment license attaches to the business at its address, and the board charges $20 for a business name change while ownership changes bring the establishment back through application and inspection under section 43-11-37, so a move, a second location or a buyout is a licensing event and not just a lease event. Practice away from the premises is not forbidden: section 43-11-11 allows practice outside a licensed establishment under board rules, which is the provision that wedding and event work rests on, but the home based salon is an establishment like any other for licensing purposes, inspected on the same cycle, and the local zoning answer for a residence based business is the gate most home salons actually fail.

Insurance for a North Dakota salon

Nothing in chapter 43-11 conditions the salon licenses on carrying liability insurance, so general and professional liability coverage is a business judgment rather than a licensing step. Workers compensation is the exception, and North Dakota runs it unlike almost anywhere else: the state is a monopolistic state fund state, Workforce Safety and Insurance is the only lawful seller of workers compensation coverage, private carriers cannot write the policy, and the employer account must be opened before employees start. WSI coverage also stops where private policies usually continue, because it does not include employer liability protection, so the standard completion is a stop gap endorsement added to the general liability policy.

The voluntary stack around that core is general liability for the premises, professional liability matched to the services each license covers, and property coverage for equipment and retail inventory. Owners using the booth rent model should require each independent licensee to carry her own professional liability policy and prove it at signing and renewal. The board's own allocation makes the reason concrete: the establishment holder answers for sanitation across the whole premises, and an unlicensed or uninsured renter's chair is, in every practical sense, the house's problem. A licensed renter can also seek a Workforce Safety and Insurance determination of independent contractor status through its verification application, which runs one year at a time and settles the coverage question for that renter in writing.

What it costs to open a North Dakota hair salon

The state level costs of opening are legible in North Dakota because nearly all of them sit in published schedules. On the licensing side: the $150 establishment license for the premises, $50 for each practitioner's original license, $150 for each independent licensee who rents rather than joins payroll, and renewals at $100 for the establishment and each independent licensee and $50 per person, all landing on the same December 31 date. On the formation side: $135 to file the Articles of Organization, $25 for a trade name registration if the salon trades under a name beyond its legal entity name, and nothing for the EIN or the sales tax permit application itself. Recurring state costs run on the calendar in the next section: the $50 LLC annual report each November 15, the December license renewals, and the sales tax the register collects on retail sales only. Everything beyond the schedules, build out, equipment, first inventory and deposits, is market cost, priced locally.

Renewal and filing calendar

The rhythm of a North Dakota salon year is two dates and a season: November 15 carries the company, December 31 carries every license in the building at once, and the quarterly payroll and sales tax filings run underneath both.

Official sources

• Century Code chapter 43-11: the cosmetology statute as amended by House Bill 1126, with training hours at section 43-11-16, master licenses at section 43-11-26, and fee caps at section 43-11-28.
• State Board of Cosmetology: the establishment application SFN 11795, the independent licensee application SFN 60681, and the renewal form SFN 61745 with the $50 per license late penalty.
• Administrative Code chapter 32-05-01: licensee renewal and the continuing education requirement of 4 hours annually from the 2028 cycle, with 12 hours for instructors.
• Secretary of State, limited liability companies: the $135 Articles of Organization fee, the $50 annual report and the November 15 deadline.
• Office of State Tax Commissioner, tax types: the 5 percent state sales tax on retail sales, use tax, and ND TAP registration.
• Job Service North Dakota, 2026 tax rate schedules: the $46,600 taxable wage base and the 1.00 percent new employer rate.
• Century Code section 9-08-06: the statute voiding contracts in restraint of a lawful profession, trade or business, with its sale of business and dissolution exceptions.
• IRS, apply for an EIN: the free federal application.

North Dakota hair salon FAQ