How to Start a Salon in Texas

Last updated: February 23, 2026

Opening a hair salon in Texas means working through the Texas Department of Licensing and Regulation (TDLR), which oversees the Barbering and Cosmetology Program. Texas requires both an individual cosmetology operator license and a separate salon establishment license before you can legally serve clients. The licensing fees are straightforward, but the training and exam requirements take planning.

This guide covers every requirement, cost, and step to legally open and operate a hair salon in Texas, whether you plan to rent booths to independent stylists or build a full-service salon with employees.

Hair Salon Requirements in Texas at a Glance

How to Start a Hair Salon in Texas (Step by Step)

Step 1: Get Your Individual Cosmetology Operator License

Before you can open a salon or work as a stylist in Texas, you must hold a cosmetology operator license from TDLR. Every person performing cosmetology services in your salon must also be individually licensed.

Texas Cosmetology Operator License Requirements

Apply for your cosmetology operator license through TDLR’s Barbering and Cosmetology Program. You must complete all 1,000 training hours and pass both exams before receiving your license.

Reciprocity: If you hold an active cosmetology license in another state, Texas may allow you to apply without completing additional training hours. Contact TDLR for reciprocity requirements specific to your situation.

Step 2: Form Your Texas LLC

File a Certificate of Formation online through SOSDirect, the Texas Secretary of State’s online filing system. Total cost: $300. Processing takes 3-5 business days.

Your LLC name must include “LLC,” “L.L.C.,” or “Limited Liability Company” and must be distinguishable from existing entities on file with the Secretary of State. You’ll need a Texas registered agent with a physical street address in the state. You can serve as your own registered agent if you have a Texas address.

If you want to operate under a different name (e.g., “Luxe Hair Studio” instead of “Luxe Hair Studio LLC”), file an Assumed Name Certificate with your county clerk and the Secretary of State.

Step 3: Get Your Federal EIN

Apply for a free Employer Identification Number at IRS.gov. You’ll receive it immediately when applying online. You need this to open a business bank account, hire employees, and file business taxes.

Step 4: Secure Your Salon Location

Your salon space must comply with TDLR facility requirements:

• The facility must not be used for living or sleeping purposes – this is a strict TDLR rule
• Hot and cold running water at shampoo stations
• Adequate ventilation for chemical services (color, perms, relaxers)
• Bathroom access for clients and staff
• Proper sanitation stations with disinfectant and clean storage

Before signing a lease, confirm that the location is zoned for commercial use and permits salon operations. If you’re doing any build-out or renovation, you’ll need a building permit from your local government. A sign permit may also be required for exterior signage.

Step 5: Apply for Your TDLR Salon Establishment License

Apply for your salon establishment license through TDLR. This is required for any physical location where cosmetology or barbering services are performed.

• Cost: $78 application fee
• Renewal: $78 every 2 years
• Key rule: The facility must not be used for living or sleeping

Mini-Establishments: If you operate a room or suite inside a larger licensed salon, you still need a separate establishment license. TDLR treats these “mini-establishments” as distinct licensed locations, each requiring their own $78 license.

Booth Rental: Texas does not require a separate booth rental license. If you rent a booth inside a licensed establishment, your active individual cosmetology operator license is sufficient. No additional booth-specific permit is needed from TDLR.

Step 6: Register for Your Texas Sales Tax Permit

Unlike some states, salon services are taxable in Texas. This means you must collect sales tax on haircuts, color services, styling, and all other cosmetology services, not just product sales.

• State sales tax rate: 6.25%
• Local taxes: Cities and counties may add up to 2% additional, for a maximum combined rate of 8.25%
• What’s taxable: All salon services (cuts, color, styling, treatments) AND retail product sales

Register with the Texas Comptroller of Public Accounts for a free sales tax permit. You’ll receive your permit by mail. Display it at your place of business.

Important: Because salon services are taxable in Texas, your total revenue is subject to sales tax collection from day one. Make sure your pricing accounts for tax or clearly communicates that tax is added at checkout.

Step 7: Get Local Business Permits

Local permit requirements vary by city and county in Texas. Common requirements include:

• Certificate of Occupancy (CO): Required in most Texas cities before opening a commercial space
• City business license or operating permit: Some cities require a general business permit
• Sign permit: Required for exterior signage in most municipalities
• Fire inspection: Required in many cities before occupancy
• Health permit: Generally not required for standard salon services, but check locally

Contact your local city hall or permitting office for specific requirements. Major Texas cities like Houston, Dallas, San Antonio, and Austin each have their own permitting processes.

Step 8: Get Insurance

General Liability Insurance

Covers third-party bodily injury and property damage – a client who slips on a wet floor, an allergic reaction to a product, damage to client property, etc.

• Average cost in Texas: $400-$600/year
• Typical coverage: $1 million per occurrence / $2 million aggregate

Professional Liability Insurance

Also called “malpractice” or “errors and omissions” – covers claims related to the services you provide (chemical burns, hair damage, adverse reactions to treatments).

• Average cost: $300-$500/year

Property Insurance

Covers your equipment, furniture, and inventory if damaged, destroyed, or stolen.

• Average cost: $500-$1,000/year

Business Owner’s Policy (BOP)

Bundles general liability, property, and sometimes professional liability into a single policy – often cheaper than buying separately.

• Average cost: $1,000-$2,500/year

Workers’ Compensation Insurance

Workers’ compensation is optional in Texas. Texas is one of the few states that does not require employers to carry workers’ comp. However, if you choose not to carry it, you lose important legal protections:

• Without workers’ comp, injured employees can sue you directly for negligence
• You cannot use common-law defenses (contributory negligence, assumption of risk, etc.)
• Many commercial landlords and large clients may require proof of workers’ comp

Even though it’s optional, carrying workers’ comp is strongly recommended if you have employees.

Step 9: Set Up Continuing Education Tracking

Texas updated its continuing education requirements effective September 1, 2025. You must complete CE hours before renewing your cosmetology operator license every 2 years.

Texas Cosmetology Continuing Education Requirements

Complete your CE through TDLR-approved providers before your license renewal date. Failure to complete CE can delay your renewal and result in an expired license, which means you cannot legally perform services.

Cost to Start a Hair Salon in Texas

Booth Rental Model

Full-Service Salon with Employees

Related Texas Business Guides

• Starting a Business in Texas: Complete Guide

← Back to all Texas business guides

Frequently Asked Questions

What licenses do I need to open a hair salon in Texas?

You need two licenses from TDLR: an individual cosmetology operator license (requires 1,000 training hours plus written and practical exams, total cost $181) and a salon establishment license ($78). Every person performing cosmetology services must also hold their own individual license. You will also need a Texas sales tax permit from the Comptroller and any local business permits required by your city.

Are salon services taxable in Texas?

Yes, salon services are taxable in Texas. Unlike some states that only tax product sales, Texas requires you to collect sales tax on all salon services – haircuts, color, styling, treatments, and everything else – at the state rate of 6.25% plus applicable local taxes (up to a combined maximum of 8.25%). Retail product sales are also taxable at the same rate.

How much does it cost to open a hair salon in Texas?

A booth rental model salon typically costs $17,000-$80,000 to open, depending on location, build-out scope, and equipment. A full-service salon with employees typically costs $55,000-$185,000, with the largest expenses being build-out/renovation and equipment. State licensing and formation fees are relatively low: $300 for LLC formation, $78 for the salon establishment license, and $181 for each cosmetology operator license.

Do I need a separate license for booth rental in Texas?

No. Texas does not require a separate booth rental license. If you rent a booth inside a licensed salon establishment, your active individual cosmetology operator license is sufficient. However, if you operate a room or suite as a “mini-establishment” inside a larger salon, that room/suite needs its own separate establishment license ($78) from TDLR.

Is workers’ compensation insurance required for salons in Texas?

No. Texas is one of the few states where workers’ compensation insurance is optional for all employers, including salons. However, choosing not to carry workers’ comp means you lose important legal protections: injured employees can sue you directly, and you cannot use common-law defenses. Most business advisors recommend carrying workers’ comp once you have employees, even though Texas does not mandate it.

What are the continuing education requirements for Texas cosmetologists?

Effective September 1, 2025, Texas cosmetologists must complete continuing education before renewing their license every 2 years. If you have been licensed fewer than 15 years, you need 4 hours of CE (1 hour sanitation, 1 hour human trafficking prevention, 2 hours cosmetology topics). If licensed 15 or more years, you need 2 hours of CE. Complete your CE through TDLR-approved providers.