Starting a Business in Vermont: Licenses & Permits (2026)

Last updated: February 26, 2026

Starting a business in Vermont means registering with the Secretary of State, navigating the state’s tax obligations, and securing any industry-specific licenses required by the Office of Professional Regulation or other agencies. Vermont does not require a general statewide business license, which simplifies the startup process for many entrepreneurs. Forming an LLC costs $155 online, and the annual report is $45 per year. Vermont does impose a personal income tax on business pass-through income at rates up to 8.75% – one of the higher rates in the country – so tax planning matters from the start. Workers’ compensation insurance is mandatory for any employer with even one employee, with no minimum headcount exemption. This guide covers every step using official Vermont state sources so you know exactly what you need, what it costs, and where to apply.

How to Start a Business in Vermont (Step by Step)

Step 1: Choose Your Business Structure

Most Vermont small business owners choose between a sole proprietorship, a Limited Liability Company (LLC), or a corporation. An LLC is the most popular choice because it limits personal liability and is treated as a pass-through entity for tax purposes by default.

Sole Proprietorship: No state registration required if you operate under your own legal name. Simple and low-cost, but offers no personal liability protection. If you use a business name other than your legal name, you must register an Assumed Business Name with the Secretary of State for $50.
LLC: Formed through the Vermont Secretary of State Business Services Division. Provides liability protection and operational flexibility. Online filing fee: $155. Annual report: $45/year, due within 3 months following the close of your fiscal year end (January 1 through March 31 for calendar-year LLCs).
Corporation: More complex governance. Vermont C-corporations pay a graduated corporate income tax from 6.0% to 8.5%. Recommended for businesses planning to raise outside investment or issue stock.

Vermont’s online business filing portal: bizfilings.vermont.gov.

Step 2: Register Your Business

If you form an LLC or corporation, file with the Vermont Secretary of State, Business Services Division. Online filings are processed within approximately 1 business day.

Articles of Organization (LLC): File online at bizfilings.vermont.gov. Fee: $155. Online processing: approximately 1 business day. Paper processing: 5-7 business days. Phone: 802-828-2386.
Annual Report: Vermont LLCs must file an annual report within 3 months after the close of the LLC’s fiscal year end. For calendar-year LLCs, this means filing between January 1 and March 31 each year. Fee: $45. Failure to file may result in revocation of good standing. File online at bizfilings.vermont.gov.
Registered Agent: Every Vermont LLC must maintain a registered agent with a physical Vermont street address (P.O. boxes are not permitted). An LLC member may serve as registered agent if they have a Vermont address. Professional registered agent services typically cost $49-$150/year.
Assumed Business Name (DBA): If you operate under any name other than your LLC’s legal registered name, file an Assumed Business Name with the Vermont Secretary of State. Fee: $50 (initial), $40 (renewal every 5 years). No newspaper publication required. File at sos.vermont.gov.
EIN (Federal): Apply for a free Employer Identification Number from the IRS at irs.gov. Required for multi-member LLCs, any entity with employees, and strongly recommended for any LLC opening a business bank account.

Step 3: Get Required Licenses & Permits

Vermont does not have a general statewide business license requirement. Licensing is handled at two levels: state-level occupational and industry licenses for regulated professions, and local permits required by certain Vermont municipalities.

Local permits: Some Vermont towns and cities (notably Burlington) require a local business permit or license. Check with your specific town or city clerk for current requirements and fees.
Food service / food trucks: The Vermont Department of Health, Food & Lodging Program licenses mobile food units as Commercial Caterers. Apply at vtdoh.safefoodinspection.com at least 30 days before opening.
HVAC contractors: Vermont licenses HVAC technicians as Electrical Specialists through the Division of Fire Safety. Classification A1 covers gas/oil heating systems; C3 covers refrigeration and air conditioning. Individual technician licenses required; no company-level license exists.
Cosmetology / hair salons: The Vermont Office of Professional Regulation (OPR) – Board of Barbers and Cosmetologists licenses both individual cosmetologists and salon establishments. A cosmetologist license and a separate shop/establishment license are both required.
Childcare / daycare: The Vermont Department for Children and Families (DCF), Child Development Division (CDD) licenses all childcare facilities. Vermont charges no fee to apply for or renew a childcare license.
Landscaping (pesticide application): The Vermont Agency of Agriculture, Food and Markets requires a Commercial Pesticide Applicator Certification for anyone who applies pesticides commercially. General landscaping without pesticide use requires no state license.
Private investigators: The Vermont OPR – Board of Private Investigative and Security Services licenses PI agencies and individual investigators. Both agency/qualifying agent licenses and investigative employee registrations are required.

See the industry-specific guides below for complete licensing details for each business type.

Step 4: Register for State Taxes

Vermont has a 6% state sales tax and a graduated personal income tax up to 8.75%. Tax registration is handled through the Vermont Department of Taxes and the Vermont Department of Labor.

Sales Tax: Vermont’s state sales tax rate is 6%. Some municipalities add up to 1%, for a potential combined rate of 7%. Register online through myVTax at myvtax.vermont.gov (click “Sign Up”) or submit paper Form BR-400. No registration fee. Sales tax returns are due the 25th of the month following the reporting period. More info: tax.vermont.gov.
State Income Tax: Vermont LLCs are pass-through entities by default – members report business income on their Vermont personal income tax returns. Vermont’s personal income tax is graduated, with rates ranging from 3.35% to 8.75% across four brackets. This is among the higher state income tax rates in the country. Corporations pay a graduated corporate income tax from 6.0% to 8.5%.
Unemployment Insurance (UI): Register with the Vermont Department of Labor as soon as you hire your first employee. Register online through Employer Online Services at labor.vermont.gov. The 2026 taxable wage base is $15,400 per employee. New employer SUTA rate: 1.0% for 2026. Quarterly reports are required.
New Hire Reporting: Vermont employers must report all new hires within 10 days of hire or rehire. Report through the Vermont Department of Labor Employer Online Services portal at labor.vermont.gov.
Employer Withholding: If you have Vermont employees, register to withhold Vermont income tax from employee wages. Register through the Vermont Department of Taxes myVTax portal.

Step 5: Get Business Insurance

Vermont requires workers’ compensation coverage for any employer with one or more employees – including part-time and seasonal workers. There is no minimum employee count threshold. If you hire anyone, you need coverage from day one. Sole proprietors and partners are not automatically required to carry coverage, but may elect to do so. LLC members are included in coverage by default but may file Form 29 with the Vermont Department of Labor to elect exclusion (up to 4 members may be excluded).

Coverage must be purchased from a licensed private carrier or through approved self-insurance. Vermont does not have a state-run workers’ comp fund. Non-compliance can result in significant penalties including stop-work orders and fines. Workers’ comp regulations: labor.vermont.gov/workers-compensation. Phone: 802-828-2286.

Beyond workers’ comp, general liability insurance ($1M per occurrence is standard) is strongly recommended. Industry-specific requirements apply: pesticide applicators need minimum $300,000 liability insurance; PI agencies must carry general liability insurance as well.

Vermont Business Guides by Industry

Choose your industry for a detailed breakdown of every license, permit, and requirement:

Vermont Business Resources & Official Links

Frequently Asked Questions

How much does it cost to form an LLC in Vermont?

The online filing fee for a Vermont LLC (Articles of Organization) is $155 through the Secretary of State’s filing portal at bizfilings.vermont.gov. Paper filings are also $155 but take 5-7 business days. The annual report is $45/year, due within 3 months of your fiscal year end. Add registered agent costs of $49-$150/year if using a commercial service, or appoint yourself as agent if you have a Vermont address. Total first-year cost is typically $200-$350 depending on registered agent choice.

Does Vermont require a general state business license?

No. Vermont does not require a general statewide business license. Licensing requirements fall into two categories: local permits (required by some Vermont towns and cities – check with your town clerk) and state-level occupational licenses for regulated industries such as cosmetology, childcare, food service, HVAC, and private investigation. Many businesses need both a local permit and a state industry-specific license.

What is Vermont’s sales tax rate?

Vermont’s state sales tax rate is 6%. Some municipalities add up to 1%, for a possible combined maximum of 7%. Register for sales tax through myVTax at myvtax.vermont.gov. Most service businesses (such as cleaning services) are not subject to sales tax; prepared food sales (such as food trucks) are taxable. There is no registration fee to obtain a Vermont sales tax permit.

Does Vermont require workers’ compensation insurance?

Yes, for any employer with one or more employees, including part-time and seasonal workers. Vermont’s threshold is one of the broadest in the country – there is no minimum headcount exemption. Sole proprietors and partners are not automatically required to carry coverage but may elect to. LLC members are automatically included in coverage but up to 4 members may file to opt out. Coverage must be purchased from a licensed private carrier. Contact the Vermont Department of Labor at 802-828-2286 for more information.

What are Vermont’s state income tax rates for business owners in 2026?

Vermont LLCs are pass-through entities by default – business profits flow to the owner and are taxed at Vermont’s personal income tax rates, which range from 3.35% to 8.75% across four graduated brackets. Vermont’s top rate is among the higher in the country and is important to factor into your financial planning. Vermont also allows LLCs to elect entity-level taxation under the Pass-Through Entity (PTE) tax, which can provide a federal SALT deduction benefit for the owners.

How do I register a DBA in Vermont?

File an Assumed Business Name registration online through the Vermont Secretary of State’s portal at bizfilings.vermont.gov. The initial fee is $50 and the registration is valid for 5 years, renewable for $40. Unlike some states, Vermont processes assumed name filings at the state level through the Secretary of State – no county-level DBA filing is required, and no newspaper publication is required.

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About the Author

Robert Smith has run a licensed private investigation firm for 8 years from the Florida-Georgia state line - where he learned firsthand how wildly business licensing rules differ between states just miles apart. He personally researched requirements across all 50 states and D.C., reviewing hundreds of government sources over hundreds of hours to build guides he wished existed when he started. Not a lawyer or accountant - just a business owner who has done the research so you don't have to.

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