How to Start a Bed and Breakfast in North Dakota: DHHS License at $60 a Year, Up to 7 Lodging Units and No Stricter Local Health Rules

Learning how to start a bed and breakfast business in North Dakota is easier than most people expect. The state health license costs $60 a year, and a bed and breakfast can have up to seven lodging units. The harder work is everything around the license: choosing an ownership structure, registering your name, confirming zoning, setting up sales tax, and getting the building ready before your first guest arrives. This guide covers each step in order, with the fees and deadlines the state publishes.

Disclaimer: This article is informational content, not legal or tax advice. Rules change, and your situation may differ. Talk to a qualified attorney or CPA before you decide on an entity structure, tax treatment, or contracts.

What the State Defines as a Bed and Breakfast

North Dakota's Department of Health and Human Services (DHHS) regulates bed and breakfasts under the Food and Lodging rules in North Dakota Century Code Chapter 23-09.1. In state terms, a bed and breakfast is a private home that:

• has no more than seven lodging units, and
• serves no more than two family-style meals a day.

If your plan goes past either limit, you are no longer operating under the bed and breakfast category. A hotel or motel requires a separate lodging license. Check with DHHS Food and Lodging at 701-328-1291 for that fee and its requirements before you design the property. Chapter 23-09, the hotel and restaurant chapter, does not apply to a bed and breakfast licensed under Chapter 23-09.1 (23-09-23).

Materials and Information to Gather First

Collect these items before you file anything. Missing one usually means a second trip to a county office or a returned application.

• The property address and a floor plan showing every guest room, bathroom, shared space, and the kitchen
• Proof that you can operate at the property, such as a deed or a signed lease with the owner's written permission
• Your legal name, a mailing address in North Dakota, and the tax identification numbers you will use on state and federal forms
• Two or three business name options, checked against Secretary of State records
• A written budget covering filing fees, the DHHS license, insurance, furnishings, linens, and any renovation work
• The name and address of a North Dakota registered agent, if you plan to form an LLC or corporation
• Contact information for your city or county planning and zoning office, your local building permit office, and your local fire authority

Step-by-Step: How to Start a Bed and Breakfast in North Dakota

Step 1: Choose Your Business Structure

North Dakota has no general statewide business license. Registering an entity or a trade name is a filing with the Secretary of State, not a license. Your structure determines what you file.

• Sole proprietorship: No formation filing is required. If you operate under any name other than your own legal name, you must register a trade name with the Secretary of State for $25. A trade name registration must be renewed every 5 years, and it gives you the exclusive right to that name within North Dakota only.
• Limited liability company (LLC): File Articles of Organization under North Dakota Century Code Chapter 10-32.1 through the FirstStop portal at https://firststop.sos.nd.gov/. The filing fee is $135. North Dakota levies no franchise tax on LLCs. The LLC annual report costs $50 and is due November 15 each year.
• Corporation: File Articles of Incorporation under Chapter 10-19.1 through FirstStop. The filing fee is $100. The Business Corporation Annual Report costs $25 and is due August 1 each year.

Many owners choose an LLC for liability separation, but the trade-off is the annual report, the registered agent requirement, and the extra recordkeeping. A sole proprietorship has the lowest startup cost but leaves your personal assets more exposed. Talk with a CPA about how each structure affects your federal and state taxes.

Step 2: Check and Reserve Your Business Name

Search the name at https://firststop.sos.nd.gov/search/business before you commit to it. The Secretary of State requires that your name be distinguishable from every registered domestic or foreign LLC, corporation, limited partnership, limited liability partnership, reserved name, and registered fictitious name, trade name, trademark, or service mark.

If you form an LLC, the name must include the words "limited liability company," the abbreviation "L.L.C.," or "LLC" (NDCC 10-32.1-11). It may not include "corporation," "incorporated," "limited partnership," or their abbreviations, and it may not imply a purpose the company is not organized for. If you need time to finish your paperwork, you can reserve the name for 12 months for $10. The reservation can be renewed for successive 12 month periods. Reservations are handled at https://www.sos.nd.gov/business/business-services/register-business.

Step 3: Appoint a North Dakota Registered Agent

Corporations and LLCs must maintain a North Dakota registered agent with a physical address in the state. The business cannot serve as its own agent. The agent must be an individual who lives in North Dakota, or a North Dakota or out-of-state corporation or LLC that is registered with the Secretary of State and has a business office in North Dakota. Get the agent's approval before you name them. Failing to do so can lead to involuntary dissolution.

Expect the agent to cost money over time. A statement of change of address or agent costs $10, and service of process costs $25. Commercial registered agents charge their own fees, and the state lists a $1,000 charge for a commercial agent to be included in the listing and a $500 charge for termination or removal.

Step 4: Confirm Zoning and Local Land-Use Rules

State law limits what cities and counties can require for health, safety, licensure, and inspection. Under NDCC 23-09.1-02, no political subdivision, including a home rule city or county, may impose health, safety, licensure, or inspection requirements that exceed the state's. Do not plan around a separate city health license for a bed and breakfast.

That protection covers health and safety rules. Zoning, land use, parking, signage, and building permits are a separate question. Ask your city or county planning office whether a bed and breakfast is allowed in your zone, whether any conditions apply, and whether a permit is required before you change the property. North Dakota has 53 counties, and counties do not license businesses, so the local answer will come from your city or county planning staff.

Step 5: Plan the Building and Any Renovations

DHHS may require a plan review before you operate. Plan review adds 50% of the annual fee ($30) when it is required, and it can take up to 30 days. DHHS also inspects bed and breakfasts at least every two years.

If your renovation is large, check the contractor licensing rule. When the cost, value, or price of a construction job exceeds $4,000, the person doing the work must hold a North Dakota contractor license issued by the Secretary of State. The license costs $100 for Class D (jobs up to $100,000) and up to $450 for Class A (jobs over $500,000). Contractor licenses renew annually by March 1.

Build your plan review submission around the floor plan from your gathering list. Mark the guest rooms, the bathrooms, the kitchen, the dining area, and the emergency exits. A clear plan makes questions easier to answer.

Step 6: Apply for Your DHHS Food and Lodging License

Apply at least 30 days before you open or begin construction. Allow extra time if plan review applies, since review can take up to 30 days. The license is required before you operate, and it expires December 31. You renew during December. A renewal filed after February 1 adds 50% of the fee. The license is not transferable between premises, so a move to a different house means a new application.

The fee rules are in NDAC 33-33-06-18, amended January 1, 2026. The annual license fee is $60. First-time applicants also pay a $100 application administration fee. If plan review is required, add $30. Your first-year total can reach $190 if all three apply.

Step 7: Register for a Sales and Use Tax Permit

Lodging receipts are subject to sales tax. The North Dakota state sales tax rate is 5%, plus any city or county tax that applies to your location. The Office of State Tax Commissioner issues the sales and use tax permit. Apply through ND TAP at https://tap.tax.nd.gov/?Link=Application, and plan to apply about 30 days before you open. Confirm the permit fee on the Tax Commissioner's site, since this guide does not list it. More information is at https://www.tax.nd.gov/.

The old separate state lodging tax was repealed in 2005. Ask the Tax Commissioner which local taxes apply to your address.

Step 8: Set Up Employer Obligations and Insurance

If you hire anyone, you need workers' compensation coverage. In North Dakota, workers' compensation is a state monopoly administered through WorkForce Safety & Insurance (WSI), so you do not buy that coverage from a private carrier. Confirm your obligations with WSI before your first hire.

Your homeowner's policy may not cover a business that takes paying guests. Ask your insurer in writing about lodging coverage, liability for guests, and any exclusions. Get the answer before you accept a booking.

Step 9: Decide Whether You Will Serve Alcohol

Serving wine or beer changes your licensing. The Attorney General licenses retail alcohol with local approval. If you plan to offer alcohol at breakfast, a wine tasting, or an evening reception, confirm the requirements with the Attorney General and your local government before you advertise the service.

Fee Summary

Item	Amount or Deadline	Agency
DHHS annual license fee	$60	DHHS Food and Lodging
DHHS application administration fee (first-time applicants)	$100	DHHS Food and Lodging
DHHS plan review (when required)	$30, which is 50% of the annual fee	DHHS Food and Lodging
DHHS late renewal (after February 1)	50% of the fee	DHHS Food and Lodging
Trade name registration (sole proprietors)	$25 to register, $25 to amend, $25 to renew every 5 years	Secretary of State
LLC filing fee	$135	Secretary of State
LLC annual report	$50, due November 15	Secretary of State
Corporation filing fee	$100	Secretary of State
Corporation annual report	$25, due August 1	Secretary of State
Name reservation	$10 for 12 months	Secretary of State
Registered agent statement of change	$10	Secretary of State
Contractor license (only if a construction job exceeds $4,000)	$100 (Class D) to $450 (Class A), renews by March 1	Secretary of State
Sales and use tax permit	Confirm the fee on the ND TAP site	Office of State Tax Commissioner

Timeline: What to Do and When

1. Before anything else: Confirm the zoning and building permit rules with your city or county.
2. Early: Check and reserve your name, and choose your entity type.
3. Filing stage: File your formation document or trade name. The Secretary of State publishes no guaranteed turnaround. Its business pages do not list a number of business days, and the office directs filers to Business Services at (701) 328-2900 for current timing. Call before you plan a fixed opening date around a filing.
4. At least 30 days before opening or construction: Submit your DHHS application, with plan review if required.
5. About 30 days before opening: Apply for your sales and use tax permit through ND TAP.
6. Before first hire: Confirm workers' compensation obligations with WSI.
7. Ongoing: Renew the DHHS license in December, file your LLC annual report by November 15 or your corporation annual report by August 1, and renew your trade name every 5 years.

Common Mistakes to Avoid

• Looking for a general business license. North Dakota does not issue one. Your DHHS license and any activity-specific licenses are what matter.
• Exceeding the limits and keeping the label. A property with more than seven lodging units or more than two family-style meals a day does not fit the bed and breakfast definition. Confirm the right license before you design the property.
• Skipping the trade name. If your business name is not your legal name, register it. Running a name without registration is an avoidable problem.
• Dropping "LLC" from the name. The Secretary of State requires the LLC designation in the name (NDCC 10-32.1-11).
• Naming yourself as the registered agent. A business cannot serve as its own agent.
• Letting the license lapse. The license expires December 31. Renewals filed after February 1 cost 50% more.
• Moving the operation without a new license. The DHHS license is not transferable between premises.
• Assuming a city health license is required. State law bars local health, safety, licensure, and inspection requirements that exceed the state's. Zoning and building permits are still separate and still matter.
• Waiting until opening day for sales tax. Apply for the permit about 30 days before you open so your first booking is compliant.
• Doing the renovation without checking contractor rules. A construction job over $4,000 requires a North Dakota contractor license for the person doing the work.

Realistic Expectations for Your First Year

Licensing rarely produces guests on its own. It does make it possible to accept paying guests without a compliance problem. Owners who finish the state filings, the DHHS application, and the sales tax permit before they advertise may find it easier to take bookings on a fixed date. The exact timeline depends on how quickly the Secretary of State processes your filing, whether DHHS requires plan review, and how much renovation work the property needs. Build a buffer into your opening date.

Your revenue depends on your location, your rates, your marketing, and your guests. Nothing in this article promises any level of income. Talk with the North Dakota Small Business Development Centers, hosted by the University of North Dakota Nistler College of Business and Public Administration, at https://und.edu/ndsbdc/index.html. The U.S. Small Business Administration's North Dakota page at https://www.sba.gov/district/north-dakota also lists local resources.

Where to Confirm Each Requirement

• Entity filings and name searches: North Dakota Secretary of State at https://www.sos.nd.gov/ and FirstStop at https://firststop.sos.nd.gov/
• Bed and breakfast and hotel licensing: DHHS Food and Lodging at 701-328-1291
• Sales and use tax: Office of State Tax Commissioner at https://www.tax.nd.gov/ and ND TAP at https://tap.tax.nd.gov/?Link=Application
• Zoning, building permits, and fire inspections: your city or county planning office and local fire authority
• Workers' compensation: WorkForce Safety & Insurance (WSI)
• Alcohol service: North Dakota Attorney General, with local approval

Before you commit money to a property, have an attorney review your entity choice and your guest contracts, and have a CPA review your tax setup. This article is informational content, not legal or tax advice, and the fees, deadlines, and statute references above reflect the state's published rules at the time of writing. Confirm each one with the agency before you file.