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Doing business in

Vermont

Navigate Vermont’s business landscape with ease—whether you’re incorporating, expanding, or managing tax compliance. Commenda helps you stay ahead with automated solutions for incorporation, compliance, and tax filings.
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vermont

Business Overview

Vermont features growing sectors in sustainable energy, agriculture, tourism, and technology. The state offers quality of life advantages, specialized workforce development for key industries, and programs supporting small businesses and entrepreneurship across rural and urban environments.

Key Facts & Figures

Category Details
Capital Montpelier
Major Cities Burlington, South Burlington, Rutland, Barre, Montpelier
State Sales Tax Rate 6%
Local Sales Tax Rate Up to 1% additional local option tax
Corporate Income Tax 4.95% flat rate
Physical Nexus Threshold Physical presence through employees, property, or representatives
Economic Nexus Threshold $100,000 in annual sales or 200 transactions

Did you know?

Vermont leads in craft brewery production per capita and has a growing sustainable business ecosystem.

Setup & Compliance

Vermont offers streamlined business registration with specific compliance requirements.

Vermont Business Setup Process:

  1. Choose Your Business Structure: Consider tax implications and liability protection needs.
  2. Register Your Business: File formation documents with the Vermont Secretary of State.
  3. Register for Tax Accounts: Register with the Department of Taxes for sales tax and withholding.
  4. Obtain Required Licenses: Research and secure necessary state and local business licenses.
  5. Register as an Employer: Register with the Department of Labor if hiring employees.

Ongoing Compliance Requirements:

  • Annual Reports: Vermont entities must file annual reports with the Secretary of State.
  • Sales Tax Collection: Collect and remit 6% state sales tax plus 1% local option tax where applicable.
  • Corporate Income Tax: Corporations pay progressive tax rates from 6% to 8.5%.
  • Employment Taxes: Employers must register for unemployment insurance and workers’ compensation.
  • Professional Licensing: Various professions require specialized licenses through state boards.

Hiring & Payroll

Vermont provides comprehensive worker protections with several state-specific regulations.

Vermont Payroll Requirements:

  • Unemployment Insurance: Rates from 0.1% to 6.2% on first $14,500 of wages.
  • State Income Tax Withholding: Required with progressive rates.
  • Workers’ Compensation: Required for most employers.

Vermont Employment Laws:

  • Minimum Wage: $13.67 per hour (as of 2023).
  • Paid Sick Leave: Employers with 5+ employees must provide paid sick time.
  • Final Paycheck: Due on next regular payday.
  • Mandatory rest and meal breaks.
  • Vermont is not a right-to-work state.

State Incentives

Vermont offers targeted economic incentives to support small businesses and innovation.

Key Business Incentives:

  • Vermont Employment Growth Incentive Program: Tax credits for job creation.
  • Downtown and Village Center Tax Credit: Support for local business development.
  • Research and Development Tax Credit: Supports innovative company development.

Small Business & Startup Support:

  • Vermont Small Business Development Center: Comprehensive business resources.
  • Working Lands Enterprise Initiative: Support for agricultural and forestry businesses.
  • Loan Guarantee Program for small businesses.

Regulatory Considerations

Vermont provides a detailed regulatory framework with emphasis on environmental protection.

Key Business Regulations:

  • Data Privacy: Laws protecting consumer and business information.
  • Environmental Compliance: Stringent regulations supporting sustainable practices.
  • Professional Licensing: Required for various service-based professions.

Additional Regulatory Areas:

  • Agricultural and Artisan Business Compliance.
  • Sustainable Business Practices Regulations.

Explore Tax & Compliance Topics

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