I can't tell you much about the longarm business specifically, but my husband and I have owned and operated a business for the last 30+ years. The tax benefits are probably nil. It's extremely hard to deduct a portion of your home that you use for the business unless you never do anything in that area that isn't for the business, i.e. no personal use of the longarm or storage of any non business items.
You would need business insurance for the longarm and should have it because you're running a business.
There is also the whole "dealing with the public and their unrealistic expectations" part of things. Personally, I would not do well with that part.
The longarm companies tout the benefits of running a business to get you to put the enormous amount of money into the longarm to begin with. If people believe that they will make their money back, they are more apt to spluge for the machine. Given enough time, they probably will. But it takes time and work and often working on someone else's schedule especially at first as you will be trying to build a client base and thus going over the top to make people happy.
I guess you have to decide if you need to run a business to justify the cost of the equipment and supplies and how much you can to work. You'll also have to realize that you will not begin making money immediately. There will be a learning curve to using the machine and being not only proficient, but a master on it before you can take on clients. You'll also have to think about where these clients will come from since you aren't part of a guild. In other words, you'll have to market your service somehow and somewhere.