How to Start a Massage Business in Tennessee

Who licenses massage businesses in Tennessee

Massage therapy is licensed by the Board of Massage Licensure, a health related board in the Department of Health, under Title 63, Chapter 18 of the Tennessee Code. It is the only beauty trade on this site where Tennessee licenses the establishment in the same statute as the practitioner, and means it: the law states that a license is required to practice massage therapy and to operate a massage establishment. The Board approves the education programs, sets the fee schedule in Rule 0870-01-.07, and runs the continuing education cycle in Rule 0870-01-.12. The cosmetology board has no role in massage licensing, though its sanitary rules govern what happens when massage moves into a salon, as the premises section explains.

The establishment definition is broad: a place of business held out to the public where massage therapy is practiced. A storefront studio, a day spa treatment floor and a single rented room can all meet it. The statute names one exception worth knowing: no establishment license is required for a licensed physician's office where a licensed massage therapist provides the massage. Every other public facing massage location in Tennessee plans on two licenses, one for the therapist and one for the address.

Tennessee massage business at a glance

The massage therapist license, step by step

The education requirement is 500 hours or more of curriculum at a board approved post secondary institution, authorized by the Tennessee Higher Education Commission or its equivalent, or governed by the Board of Regents. On top of the hours you need a passing score on a board approved competency examination; the Board's own sunset review materials describe the approved examinations as the national certification examination and the Massage and Bodywork Licensing Examination, the MBLEx. Apply to the Board with the full fee stack, because Tennessee splits it: an $85 application fee, a $185 initial licensure fee and a $10 state regulatory fee, $280 in total.

The license renews every two years for $185, with a $100 late renewal fee and $25 for a replacement license. Renewal is tied to continuing education: 24 hours every two calendar years, of which 2 hours must cover Tennessee statutes and rules in a course the Board approves, 2 hours must cover practice management, professional ethics or substance abuse, and no more than 8 of the 24 hours may be taken in multimedia or distance formats. Keep your course documentation for four years after the cycle closes, and attest to completion on the renewal form rather than mailing certificates in.

The massage establishment license and your premises

The establishment application totals $225, split into a $95 application fee, a $120 initial licensure fee and the $10 state regulatory fee, and it renews every two years for $135, with the same $100 late fee structure as the individual license. The establishment names a responsible person for the premises, and the continuing education rules reach the business layer too: an establishment owner or responsible person who is not a licensed massage therapist must complete the Board approved two hour course on Tennessee massage law in every two year cycle. Ownership itself is not limited to therapists, but an unlicensed owner is not a silent one under these rules.

Location choices carry licensing consequences. A massage room inside a cosmetology, skin care or manicuring shop must be a separate room with hard walls under the cosmetology board's sanitary rules, and the establishment license is still required for the massage operation at that address. A massage practice inside a physician's office is the one statutory exception to the establishment license, and it belongs to the physician's premises, not to a therapist renting nearby space. Mobile and outcall work does not remove the establishment question for your base location, so settle the license for the address you hold out to the public before you market it.

Forming your business entity

Most Tennessee massage business businesses form as an LLC, and Tennessee prices the filing by the head. The Articles of Organization, Form SS-4270, cost $50 for each member in existence on the filing date, with a minimum fee of $300 and a maximum of $3,000. A one member LLC pays the $300 minimum. A four member LLC pays the same $300, because four members at $50 each is $200 and the minimum controls. Only at seven members does the per member math pass the floor. You file online through the Secretary of State's Tennessee Charity and Business filing system, or by mail or in person in Nashville, and the form asks for your fiscal year ending month, whether the LLC is member managed or manager managed, and the number of members at filing.

The same math comes back every year. The LLC annual report is due on or before the first day of the fourth month after your fiscal year closes, which is April 1 for a December year end, and the Secretary of State charges the annual report on the same per member structure: a $300 minimum up to a $3,000 maximum, increasing $50 per member for every member over six. Budget the $300 as a fixed annual cost of the Tennessee LLC form, not a one time fee. A corporation is the alternative entity, and its charter filing fee is a flat $100, but a corporation carries its own governance formalities and the same franchise and excise tax filing described below.

Two smaller filings round out the entity layer. If you want to reserve a name before you are ready to file, a name reservation on Form SS-9425 costs $20. If an LLC is administratively dissolved for a missed annual report, reinstatement on Form SS-9410 costs $70 on top of the reports and fees owed. None of these filings replaces the licenses above: the Secretary of State registers your entity, and the licensing board licenses your people and your premises, and the two systems do not talk to each other.

Business names and assumed name registration

Tennessee splits assumed name filings by filer type. A registered entity, meaning a corporation, an LLC or a limited partnership, registers an assumed name with the Secretary of State on Form SS-4402 for $20. The registration runs five years and renews on Form SS-4481 for another $20, and a change is filed on Form SS-4403 for $20. A sole proprietor or a general partnership does not file an assumed name with the Secretary of State at all: the trade name a sole proprietor works under runs through the county business tax license instead, which is one more reason the county clerk visit in the local section matters.

An assumed name registration is a public notice filing, not a trademark and not a license. It does not stop anyone else from using a similar name, and it does not need to match your entity name, but the name on your shop license application, your business tax license and your signage should tell one consistent story, because clients, inspectors and your bank all read them side by side. If you later change the name on a cosmetology board shop license only, the Board charges a $10 name change fee under its fee rule.

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. You need the EIN to open the business bank account, to run payroll once you hire, and to register the employer accounts described below. A single member LLC can technically operate on the owner's Social Security number for some purposes, but banks, payment processors and the Department of Labor employer registration all run more cleanly on an EIN, and handing your personal number to every vendor is a habit worth avoiding from day one.

Open the business bank account as soon as the entity and EIN exist, and run every license fee, product order and rent payment through it. Tennessee's franchise and excise tax and the gross receipts business tax both reward clean books, because both are computed from records you keep rather than from anything the state can see on its own.

Business tax, sales tax and franchise and excise tax

Tennessee has three state tax layers for a massage business business, and they are easy to confuse because two of them have similar names. The first is the business tax, a privilege tax on gross receipts administered by the Department of Revenue. Service businesses file under Classification 3, and the state retailer rate for Classification 3 is 3/16 of 1 percent, or 0.1875 percent, of gross receipts, with a $22 minimum tax per location. Cities may levy the business tax as well at their own adopted rates, so many Tennessee businesses file a state return and a city return on the same receipts. The return is due annually on the 15th day of the fourth month after your fiscal year ends. Classification follows your dominant business activity, one classification per location.

The business tax license is separate from the return, and it is issued locally. You register for the tax through TNTAP, the Department of Revenue's online system, and you pay a $15 business license registration fee to the county clerk, and to the municipal clerk as well if your city levies the tax, for each new business. A location with gross receipts over $3,000 and under $100,000 holds a minimal activity license. At $100,000 or more you need a standard business license. The Department is blunt about the order of operations: a business may not operate until the required license is obtained and posted.

The second layer is sales tax, and for massage services it mostly does not apply. Tennessee taxes retail sales of tangible personal property and a short list of services the statute names, and beauty services are not on that list, so you do not collect sales tax on service receipts. Product is different: shampoo, retail cosmetics and anything else you sell off the shelf is taxable at the 7 percent state rate plus your local option rate, which runs as high as 2.75 percent, for a combined rate as high as 9.75 percent. You register for sales tax through the same TNTAP account. The third layer reaches entities only: an LLC or corporation files an annual franchise and excise tax return, Form FAE 170, where the franchise tax runs 0.25 percent of Tennessee net worth with a $100 minimum and the excise tax runs 6.5 percent of Tennessee taxable income. Sole proprietors and general partnerships do not file that return, which is a real, if modest, point in favor of the simpler forms for a solo operator.

Renting a treatment room in Tennessee

A rented massage room is still a massage establishment. The establishment license follows the place of business where massage is held out to the public, not the size of the operation, so a therapist renting a room inside a salon, spa or wellness center needs the premises covered by a massage establishment license, hers or the host's, before she books clients there. If the host already holds an establishment license for the address, confirm in writing that your room and your work sit under it. If it does not, the $225 establishment application is yours to file, and inside a cosmetology shop the Board's sanitary rules add the floor plan condition: the massage room must be a separate room with hard walls.

The same logic runs the other way for salon owners. Renting a room to a massage therapist makes your premises a massage location, and the establishment license, the responsible person rules and the two hour Tennessee law course for a non-therapist owner all arrive with the tenant. Put the license holder, the responsible person and the renewal duty in the rental agreement, because the Department of Health will ask the premises, not the lease, who is in charge.

Hiring employees in Tennessee

Your first hire registers you as an employer with the Department of Labor and Workforce Development for unemployment insurance, and you file wage reports quarterly after that. New employer premium rates are set by industry, and the Department states the new employer premium rate for all other industries is 2.7 percent of taxable wages. Your rate becomes experience rated after your account has been chargeable with benefits for 36 consecutive months ending on a December 31. The taxable wage base is set by statute in tiers tied to the unemployment trust fund balance, so confirm the current figure in your employer account when you register rather than budgeting from a number in a guide.

The rest of the Tennessee payroll picture is unusually light. Tennessee has no state income tax on wages, so there is no state withholding to set up, and Tennessee has no state minimum wage law, so the federal $7.25 an hour applies, with the federal tip credit rules for tipped staff. Light does not mean optional: worker classification is where Tennessee beauty businesses get hurt, because calling a stylist an independent contractor does not make her one for unemployment premium purposes if you control her schedule, her prices and her clients. The hiring decision and the booth rent decision in the previous section are the same decision seen from two sides, and the Department of Labor only cares about the substance of the arrangement.

County, city and local rules

The local layer starts at the county clerk's office, where your business tax license is issued for the $15 registration fee described in the tax section, and at city hall if your city levies its own business tax, which the larger cities, including Nashville, Memphis, Knoxville and Chattanooga, do through their own clerks. Beyond the license itself, your premises pass through local zoning, a building or occupancy permit for the buildout, and fire and life safety inspection, none of which the state board handles. A change of location is also a state event, not just a new lease: a relocated shop needs a new inspection and a new shop license application with the Board before you work at the new address.

Local rules are also where signage, home occupation limits and parking requirements live, and they differ enough between a Memphis storefront, a Knoxville strip center and a home based studio in a small county that no state guide can price them for you. Get the clerk's business license, the zoning answer and the inspection schedule in writing before you sign the lease, because every state license in this guide is issued for a specific address and a move restarts parts of the stack.

Insurance for a Tennessee massage business

The Board's rules do not publish a required insurance amount for a Tennessee massage business, so treat insurance as a risk decision and a lease decision rather than a licensing line item. In practice, a landlord will name the coverage he expects in the lease, and a business working on hair, skin or bodies should carry professional liability for the services themselves, general liability for the premises, and property coverage for equipment and retail stock. If you rent chairs or rooms to other licensees, your policy and theirs should both name the arrangement, because the designated manager structure means an incident in a renter's chair can still land on the shop license holder's desk first.

Your Tennessee renewal calendar

Official sources

• Tenn. Code Ann. section 63-18-105: licenses required for therapists and establishments
• Rule 0870-01-.07: massage fee schedule, $280 individual and $225 establishment totals
• Rule 0870-01-.12: continuing education, 24 hours every two calendar years
• Board of Massage Licensure: continuing education requirements and cycles
• Rule 0440-02-.06: massage inside a cosmetology shop requires a separate room with hard walls
• Form SS-4270: Articles of Organization, $50 per member, $300 minimum, $3,000 maximum
• Secretary of State: business forms and filing fees, including SS-4270, SS-4402 and SS-9410
• Department of Revenue: business tax registration and the county and city business license
• Department of Revenue: sales and use tax, 7 percent state rate plus local option
• Department of Revenue: franchise and excise tax rates and due dates
• Department of Labor and Workforce Development: how the employer premium rate is set

Tennessee massage FAQ