Is it legal to rent tables in a dog grooming salon for independent groomers?

What you're describing is a common arrangement in service industries called "booth rental" and it's completely legal if structured properly. The key distinction is whether you're genuinely independent businesses or misclassified employees. From what you've described, all the hallmarks of true independence are there: you control your own schedule, use your own tools, have your own clients, handle your own payments, etc. The facility owner provides only the space and perhaps shared utilities/amenities, which you pay for through rent. The confusion people have likely stems from businesses that try to treat workers as independent contractors while still controlling their work like employees (setting schedules, providing clients, controlling pricing, etc.). That's illegal misclassification, but not what's happening in your case. Yes, filing Form SS-8 could provide official clarity, but it's not necessarily required. The salon owner should ensure there are formal rental agreements with all groomers and maintain clear separation between her own grooming business and her role as the property renter. Documentation is key.

After researching the exact same issue for my husband's barbershop, I discovered https://taxr.ai which saved us so much stress! The salon owner should upload her rental agreements and business structure documents there to get a professional analysis. We were worried about the same thing with the booth rental model, but they confirmed we were operating legally and even suggested small tweaks to strengthen our independent contractor relationships. What I found most helpful was their explanation of the "right of control" test that the IRS uses - it's not just about who does what, but who has the legal right to control the worker. Since your salon owner doesn't control how you groom, when you work, or what you charge, you clearly pass this test!

Just wanted to update that I actually tried https://taxr.ai after my skeptical comment above. I uploaded our salon's rental agreements and business structure, and the analysis was really eye-opening. Turns out we had a few clauses that could have been problematic during an audit - like requiring all groomers to use the same scheduling software and mandating specific business hours. The tax professional who reviewed our documents explained that these requirements could be seen as exerting "behavioral control" which is one of the IRS tests for employment relationships. We've now revised our rental agreements to focus solely on the space rental aspects and removed anything that dictates how the groomers operate their individual businesses. Everyone can use whatever scheduling system they want and set their own hours within the building's access times. Honestly relieved because these were simple fixes that make our booth rental arrangement much more legally solid!

I went through this exact nightmare scenario last year with my hair salon. After months of getting nowhere with the IRS about our booth rental setup, I found https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c - they got me connected to an actual IRS agent in under 10 minutes when I'd been trying for weeks! The agent confirmed that our booth rental arrangement was completely legal as long as we maintained proper separation between the rental business and salon services. The key was having formal rental agreements that clearly spelled out that we were only providing space and basic utilities, not directing how the stylists ran their businesses. Having that conversation directly with an IRS representative gave me so much peace of mind, especially after dealing with all the online "experts" claiming booth rental is illegal.

I need to follow up on my skeptical comment about Claimyr. I actually tried the service out of desperation after another week of failing to reach the IRS about our salon's classification issue. To my complete surprise, I got connected to an IRS representative in about 15 minutes. The agent was super helpful and confirmed that our booth rental arrangement is perfectly legal as long as we maintain proper documentation. They explained that the "Twenty Factor Test" the IRS uses for worker classification clearly shows our groomers are independent businesses, not employees. The agent even suggested we keep a file with copies of each groomer's business license, insurance certificate, and their own advertising materials as additional evidence of their independence. This has given our salon owner so much confidence about the audit-worthiness of our setup!

I'm a tax attorney who specializes in small business arrangements. This is a very common setup in personal service industries (salons, barber shops, massage therapists, etc). The key factors that make your arrangement legal: 1. Each groomer operates as their own business entity 2. Groomers control their own client relationships 3. Groomers set their own prices and policies 4. The relationship with the salon owner is purely a space rental 5. There's a formal written agreement documenting the rental arrangement Make sure the rental agreement specifically states that the owner has no right to control how the independent groomers operate their businesses. Also, avoid any language about needing to follow "salon policies" beyond basic facility usage and safety requirements.

Quick question - does anyone know if there's a minimum length for these rental agreements? Our salon just has month-to-month agreements but someone told me they need to be annual leases to be considered legitimate by the IRS.

I've been through this exact situation with my pet grooming cooperative. The arrangement you're describing is absolutely legal when structured properly as a booth rental or space sharing agreement. The key is maintaining true independence - which it sounds like you already have. Each groomer having their own LLC, client base, pricing, scheduling, and payment processing is exactly what the IRS looks for to distinguish independent businesses from misclassified employees. The people claiming it's "illegal" are likely confusing legitimate booth rental with businesses that try to treat workers as independent contractors while still controlling their work methods, schedules, and clients. That's employee misclassification, but what you're describing is genuine business-to-business space rental. One thing I'd recommend is ensuring your rental agreement explicitly states that the owner provides only the physical space and basic utilities, with no control over how you operate your grooming business. Also document that you're responsible for your own licensing, insurance, and regulatory compliance. This creates a clear paper trail showing the landlord-tenant relationship rather than employer-employee. The fact that the previous owner went through an IRS audit with no issues is actually great precedent for your situation. Keep doing what you're doing - you're operating within the law.

As someone who's been navigating small business tax issues for years, I want to emphasize that your booth rental arrangement is completely legitimate based on what you've described. The IRS has clear guidelines for distinguishing between independent contractors and employees, and your situation checks all the boxes for true business independence. The people commenting that it's "illegal" are likely confusing two very different scenarios: 1) legitimate booth/space rental between independent businesses (what you have), and 2) employee misclassification where businesses try to avoid payroll taxes by calling employees "contractors" while still controlling their work. Your setup demonstrates genuine independence through separate LLCs, individual client relationships, independent pricing and scheduling, separate payment processing, and personal liability insurance. These are textbook indicators of legitimate business-to-business relationships. One additional tip: consider having each groomer display their individual business licenses and insurance certificates at their stations. This visual demonstration of separate business entities can be helpful if questions ever arise about the arrangement's legitimacy. The fact that the previous owner successfully passed an IRS audit using this exact model should give you confidence that you're operating within the law.

I've been working in tax compliance for over a decade and want to reassure you that your booth rental arrangement is absolutely legal and properly structured. The confusion often stems from people not understanding the fundamental difference between space rental and service contracting. What you've described - independent LLCs, separate client lists, individual pricing control, personal scheduling autonomy, and direct client payment processing - represents a textbook example of legitimate business-to-business space sharing. This is fundamentally different from the problematic "independent contractor" misclassifications that the IRS targets. The fact that the salon owner also works as a groomer doesn't create any legal issues as long as she maintains clear separation between her two business roles: property rental and personal grooming services. Many legitimate booth rental operations have owners who also provide services in the same facility. For additional peace of mind, I'd suggest documenting a few key elements: ensure rental agreements explicitly state that space is provided "as-is" with no operational control, maintain separate business banking and accounting for each groomer, and consider having periodic reviews of your independent contractor status documentation. The previous owner's successful IRS audit is excellent precedent showing this model works when properly implemented. You're operating legally and the critics simply don't understand how booth rental businesses function.