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Tattooing out of the home is illegal mainly because of sanitation risks. If someone is just tattooing out of their home, there's no real way to make sure that they're taking proper health precautions. Tattoo artists in shops are generally required to wear gloves, face masks in some places, sterilize their equipment, dispose of used needles in special bio-hazard containers, sterilize any and all work surfaces after every customer, etc. Someone tattooing out of their home probably isn't going to do all of the things I listed above.
The old style of tattooing was using ink and putting it into someone's skin... Not that different :)
Call your local health department and law enforcement.
You should report having a dependant in the home.
If you have to ask, you shouldn't be tattooing ANYBODY.
you can go to google and type in wolfquest report and report someone
Hand Tapping or simply tattooing by hand or tattooing without electricity
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Regulations for tattooing vary by state and city. Check your local government.
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Assuming the room or rooms used for the purpose meet standards for both tattooing and for running a business from home, there should no reason for it not to be legal.