How to Start a Salon Suite Business in North Dakota

Who regulates salon suites in North Dakota

The licensing authority is the State Board of Cosmetology, administering Century Code chapter 43-11 as amended by House Bill 1126 effective January 1, 2026, and this business type is where the 2026 rewrite shows most clearly. Earlier versions of North Dakota law handled the chair renter through board rules; the current statute names the category itself, defines it at section 43-11-01, prices it at section 43-11-28 alongside the establishment license, and gives it the same December 31 expiry and reinstatement ladder as every other license in the chapter. A suite building in North Dakota is therefore a stack of licenses the board can enumerate: one establishment license for the premises, one independent licensee license for each renter, one personal license for each practitioner, and a master licensee supervising the whole.

The rest of the setup sits outside the board. The Secretary of State takes an Articles of Organization filing and a trade name registration for each business in the building, the operator's and each renter's, because the board's applications require registered names. The Office of State Tax Commissioner issues each seller's sales and use tax permit through ND TAP. Job Service North Dakota and Workforce Safety and Insurance matter only where a business in the building has employees, which for a pure rental building is the operator's own staff if any. Your city holds zoning, building permits for the suite build out, signage and occupancy, and its answer on the personal services use is the first gate the project passes.

North Dakota salon suite at a glance

The independent licensee license, step by step

The renter's license is the center of this guide, and it stacks on a personal license rather than replacing one. The applicant first holds a cosmetologist license at 1,500 hours, an esthetician license at 600, an advanced esthetician license at 1,100, or a manicurist license at 350, each $50 under sections 43-11-16 and 43-11-28, and then adds the independent licensee license for the space she will work in. The definition at section 43-11-01 carries the operative terms: she maintains a separate license, practices at a location within but separate from a cosmetology establishment, and must abide by the same provisions of the chapter as an establishment, which means the sanitation, inspection and renewal duties of a salon attach to her suite personally, not to the landlord's file alone.

The application is form SFN 60681, and it mirrors the establishment application's discipline at room scale: the original application is notarized and submitted two weeks before the opening date, the fee is $150, and a floor plan drawing of the space accompanies it. The form states the legal relationship in the sentence landlords should build their leases around: independent licensees are not employees of the licensed establishment and operate an independent business subject to the chapter. The administrative rules complete the picture at Administrative Code section 32-01-02: the independent licensee operates under a lease agreement and may render services within the establishment and at various temporary or offsite locations, a permission that lets a suite renter keep an event and bridal book without a second license, subject to the board's rules for practice outside a licensed establishment under section 43-11-11.

Renewal runs on the building's shared clock. The independent licensee license expires December 31 under section 43-11-29.1, renews at $100 on form SFN 61745, and draws the same $50 penalty per license paid or postmarked late that every license in the chapter draws. Reinstatement within one year takes the late fee plus the renewal fee; after twelve months the renter reapplies, with late penalties accruing at $100 per year expired, and an expired independent licensee license leaves the suite operating unlicensed in the interval, which is precisely the fact pattern that drops the room onto the landlord's sanitation responsibility. Inspections reach the renter directly: section 43-11-37 requires each new independent licensee to be inspected, with routine inspections afterward and a reinspection fee capped at $75, so the suite is an inspected premises in its own right and not a corner of someone else's inspection.

The establishment license behind the building

The landlord's license is the establishment license, $150 originally and $100 on annual renewal, expiring December 31, under section 43-11-28. The application is form SFN 11795, the original must be notarized and submitted two weeks before the opening date, and the business name must already be registered with the Secretary of State as a trade name, an LLC, an LLP, or a corporation. Section 43-11-15 allows an establishment to be owned by any person authorized to do business in the state, licensed or not, which is what permits the pure landlord model at all: the operator need not hold a personal cosmetology license to own the building's license. Section 43-11-37 requires each new establishment to be inspected, with the same inspection cycle the renters sit under.

Two duties qualify that clean picture. The first is supervision: Administrative Code section 32-03-01-07 requires every salon to be supervised by a master licensee present on the premises during business hours, and a suite building is a salon for this purpose, so the operator either employs or contracts a master cosmetologist, or matches masters to the building's menu under the rule's variants, a master cosmetologist or master manicurist for a manicuring only space and a master cosmetologist or master esthetician for a skin care only space. The master license itself takes 1,000 hours of practice under a master licensee under section 43-11-26, which makes the building's supervisor a recruited position rather than an afterthought. The second duty is the sanitation backstop printed on the establishment application: the holder is responsible for the safety and sanitation of the entire premises, and any suite whose renter lacks a valid, current independent licensee license falls under the establishment license, with the holder responsible for that space. The operator's compliance system follows directly: a license file per suite, copies collected at signing, a December renewal sweep every year, and a lease clause that makes a lapsed license a lease default, because the statute has already made it the landlord's problem.

Forming your business: the LLC

A suite building multiplies the entity layer, because the operator forms a business and every renter is one too. The operator's limited liability company files Articles of Organization with the Secretary of State through the FirstStop portal for $135 under Century Code chapter 10-32.1, names its registered agent and office, and files the $50 annual report due November 15 each year, with a $50 late fee after the deadline and the first report due in the year following the registration year.

Each renter runs the same small stack at room scale: her own LLC at $135 if she forms one, her own $50 annual report each November 15, her own trade name at $25 if she trades under a name beyond the entity's, and her own EIN and sales tax permit. The operator who wants suites filled with durable businesses makes this paperwork part of the leasing package, a checklist in the welcome folder rather than a discovery at inspection, because a renter whose entity, name registration and licenses all agree is a renter whose suite survives the board's visit without findings.

Registering your business name

Names in a suite building come in two layers, and both are registered at the state level as trade names under Century Code chapter 47-25 when they are not already on file as an entity name. The building's brand goes on the establishment application, which requires the business name to 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: $25 through the FirstStop portal, expiring every five years, renewed at $25, with cancellation at $10. The board charges $20 for an individual or business name change, so a rebrand touches the state registry and the board file both.

Getting your EIN

The Employer Identification Number is the federal tax identity for the business, issued free by the IRS, and a suite building needs one per business rather than one per building. The operator's EIN anchors the building's withholding account if it has employees, its Workforce Safety and Insurance account, and its tax filings.

Sales tax: rent and services no, retail yes

The tax analysis of a suite building has three streams, and North Dakota taxes exactly one of them. Rent is a lease payment for space, not a retail sale, and it is not among the taxable categories the Office of State Tax Commissioner administers.

The landlord's tax file is correspondingly narrow: the operator collects and remits on the operator's own retail, if the building runs a shared retail shelf under the house brand, and on nothing else, because the renters' receipts are not the landlord's sales. Use tax mirrors the rule on the way in for each business separately, reaching equipment and supplies bought without tax and used in that business.

Booth rent in North Dakota: the licensed version

Booth rent is this business type at single chair scale, and North Dakota's treatment of it deserves its own section because it reverses the usual analysis. In most states a booth renter's independence is an argument assembled from facts, control of schedule, prices, clients and money.

The credential itself is the independent licensee license, defined at section 43-11-01(13) and in the board's rules as a separate license to practice within but separate from a licensed establishment, held under a lease agreement with the establishment. The licensee may render services within the establishment and at temporary or offsite locations, the application is the board's SFN 60681, notarized and filed two weeks before opening with a floor plan of the suite, and the form states plainly that independent licensees are not employees of the licensed establishment. A renter without the license is not a second kind of renter: her chair sits under the host's establishment license, and her sanitation sits on the host's record.

The economics are worth printing next to the payroll alternative. The renter's state price of independence is $150 once and $100 a year, plus her $50 personal license renewal, against which she keeps her full service and retail receipts and files her own taxes.

Renters are not employees: the classification line

The classification line in a North Dakota suite building is unusually bright, and it is drawn by the licensing file. Renters hold independent licensee licenses, operate under leases, run their own entities and tax permits, and are declared by the board's own application not to be employees of the licensed establishment. Employees, a front desk coordinator, a cleaner, an assistant, sit on the other side: they work under the operator's control, on the operator's payroll, inside the operator's Workforce Safety and Insurance account. The error to avoid is the hybrid, the renter the house schedules, prices and disciplines like staff while pointing at her license, because wage, tax and unemployment law read the working facts, and the license answers the board's question, not the Department of Labor's. Keep the lease facts and the daily facts the same story: her book, her prices, her hours, her clients, her money.

Where the operator does hire, the North Dakota payroll numbers are these. The minimum wage is $7.25 an hour under section 34-06-22, with a tipped cash wage of $4.86, and overtime at one and one half times the regular rate after 40 hours in a workweek. Job Service North Dakota sets the unemployment insurance taxable wage base at 70 percent of the statewide average wage, $46,600 per employee for 2026, with a new non-construction employer rate of 1.00 percent on a positive balance and experience rated rates from 0.07 percent to 9.67 percent; employers register, file quarterly, report new hires within 20 days, and register a withholding account through ND TAP. Workers compensation comes only from Workforce Safety and Insurance, opened before the first hire. And section 9-08-06 voids noncompetes outside a business sale or an ownership split, so a lease may not do through a restraint clause what the statute forbids an employment contract to do; the lease protects the house through rent, term, standards and the license condition, not by fencing a departing renter out of her trade.

The local layer: cities, zoning and premises

The state licenses the building; the city decides whether the building may be a suite business at all. Zoning approval for a personal services use, often analyzed suite by suite in multi tenant conversions, building permits for the plumbing and electrical work each suite needs, signage permits, and occupancy inspections run through the city or county where the premises sit. The local sales tax add-on that applies to retail sales in the building is set locally, so the combined rate each renter programs is a fact about the address. Suite conversions draw more local scrutiny than single salons, because the use intensifies: more sinks, more chairs, more parking, more hours, and the permit conversation should happen with the full suite count on the table rather than discovered in phases.

Premises facts carry state licensing consequences as well. The establishment license attaches to the business at its address, the board charges $20 for a business name change, and ownership changes bring the establishment back through application and inspection under section 43-11-37, so a sale of the building's business is a licensing event. Each renter's floor plan is on file from her own application, which means a reconfiguration of suites is a board event as well as a construction event: moved walls and renumbered rooms should be matched against the filed plans before the next inspection finds them different.

Insurance for a North Dakota salon suite

Nothing in chapter 43-11 conditions the suite licenses on carrying liability insurance, so coverage is allocated by the lease rather than by the board, and the allocation should mirror the licensing stack. Workers compensation is the regulated exception: North Dakota is a monopolistic state fund state, Workforce Safety and Insurance is the only lawful seller of the coverage, and the operator's account covers the operator's employees, not the renters, who are separate businesses. WSI coverage does not include employer liability protection, so the standard completion is a stop gap endorsement on the general liability policy. A renter can seek a WSI determination of independent contractor status through its verification application, which runs one year at a time and settles her coverage position in writing.

The lease stack that matches the licenses is this: the operator carries general liability for the common premises and property coverage for the building systems; each renter carries professional liability for her own services and property coverage for her own equipment and inventory, and proves both at signing and at each December renewal, alongside the license copies the board's sanitation allocation already makes the operator collect. The reason is the same fact stated two ways: the board makes the holder answer for the whole premises when a renter's license lapses, and a claim arising in an uninsured renter's suite will be addressed to the building and its operator as readily as to the renter. Insurance, like the license file, is cheapest when it is a condition of the chair rather than a repair after the event.

What it costs to open a North Dakota salon suite

The state level costs come in two columns, the operator's and each renter's, and both sit in published schedules. The operator pays the $150 establishment license, $135 for the LLC's Articles of Organization, $25 for a trade name if the building trades under a name beyond its entity name, and recurring $100 establishment renewals and $50 LLC annual reports. Each renter pays her $50 personal license, the $150 independent licensee license, her own $135 LLC filing if she forms one and $25 trade name if she needs one, and recurring renewals of $100 for the independent license, $50 for the personal license and $50 for her annual report. A ten suite building therefore carries a December renewal stack of the establishment license plus ten independent licenses plus eleven personal licenses before anyone's continuing education is counted, and the operator who calendars that stack for the whole building, as a leasing service, keeps the sanitation backstop from ever being tested. Everything beyond the schedules, the build out, plumbing, suites, furnishings and deposits, is market cost, priced locally, and is where the real capital in this business type sits.

Renewal and filing calendar

The rhythm of a North Dakota suite year is a building wide December: every license in every suite expires on the same night, the company reports land a month earlier on November 15, and the operator's renewal sweep is the service that keeps the stack a formality.

Official sources

• Century Code chapter 43-11: the cosmetology statute as amended by House Bill 1126, with the independent licensee definition at section 43-11-01, establishment ownership at section 43-11-15, inspections at section 43-11-37, and the $150 and $100 fees at section 43-11-28.
• State Board of Cosmetology: the establishment application SFN 11795 with its sanitation allocation for unlicensed renters, the independent licensee application SFN 60681, and the renewal form SFN 61745.
• Administrative Code chapter 32-05-01: licensee renewal and the continuing education requirement of 4 hours annually from the 2028 cycle.
• 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.
• IRS, apply for an EIN: the free federal application.

North Dakota salon suite FAQ