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1.  Register your business name with the Vermont Secretary of State.  If you plan to operate under a different name than your own, you must register the trade name with the Secretary of State.  A small fee is charged, and the registration is valid for five years.  Forms are available online.  As part of your business planning process, you need to choose a legal structure:  sole proprietorship, partnership, S-Corp, C-Corp, Worker Cooperative Corp, non-profit, limited profit, Limited Liability Corporation, or the new L3C.  Once you decide, if you are anything other than a sole proprietorship, you must file forms with the Secretary of State.  This office also registers trademarks, issues certificates of incorporation for domestic corporations, administers Limited Liability Companies, administers Limited Partnership Registration, and administers Amusement Park Ride Regulation.  (802) 828·2386 | www.sec.state.vt.us

2.  Register with the Vermont Department of Taxes.  They will help  determine which types of taxes are required.  The Department of Taxes administers personal income tax, business taxes, meals and rooms tax, sales and use tax, withholding tax, and assigns a Business Tax Account number.  You must have an account number before you open for business.  See the definitions of various State taxes on the right.  (802) 828·2551 | www.state.vt.us/tax

3.  Register with the Internal Revenue Service. The IRS has application forms online for federal employer ID numbers (EIN) and federal taxes. If you plan to have employees, you will need to get an EIN from the IRS by submitting form SS-4.  You will be required to make regular payments to the IRS for social security and employee withholding tax.  Prepare by reading the section on Employees and Related Taxes in this guide.  As a sole proprietor, if you expect to owe at least $1,000 in personal income tax to the IRS for the upcoming tax year, you must make estimated quarterly payments using form 1040ES.   Again, read the Employees and Related Taxes section.  The IRS conducts local workshops and courses geared to small businesses, usually free of charge.  Visit:  Burlington IRS office at 199 Main Street, Burlington.  (802) 859·9308 | www.irs.gov

5.  Read the Special Considerations section of this guide.  Your business may require special permitting, licensing and taxes.  Among other things, you might need to call the Health Department and/or the Agency of Natural Resources.  The Health Department provides licenses and permits for a wide range of specific businesses (e.g., food and lodging, bakeries, asbestos abatement workers, lead contractors, emergency medical service providers, hospitals, food processors, etc.).  Again, read the Special Considerations section to see if your business requires special considerations.

Commercial Real Estate Tax: A non-residential property tax based on a multiplier of 1.2 of the City’s appraised value. For billing questions call the City Clerk’s Office at (802) 865.7000. For appraised valuation questions call the City Assessor’s Office at (802) 865.7114 or visit the Assessor’s website for property data at www.ci.burlington.vt.us/assessor.

Business Personal Property Tax: Also known as the Machinery and Equipment tax. It is required for all businesses to register with the City Assessor’s Office. Please contact the Assessor’s Office by calling (802) 865.7114. You can learn more about this tax and obtain the registration form by going to the City Assessor’s website, www.ci.burlington.vt.us/assessor.

Downtown Improvement District Tax: This tax enables free parking for shoppers and visitors during peak shopping times throughout the year. This tax is based on the appraised value and only applies to the commercial properties within the Downtown district. This tax is on the Real Estate tax bill. For billing questions call the City Clerk’s Office at (802) 865.7000.

Meals and Rooms Tax:  The City requires restaurants, movie theaters, amusements, caterers, motels, hotels, and guest homes to pay a percentage of gross monthly receipts to the City Clerk's office on a monthly basis.  Call (802) 865.7011/7015 for the current tax rates.

Computers have all but eliminated the need for 37 foot-tall filing cabinets.

South End outdoor sculpture (above) constructed by Bren Alvarez.

Get the Guide to Vermont Business Taxes by calling (802) 828·2551.

State Tax Definitions

Sales & Use:  A tax on the sale and rental of goods, acquired both in and out of state.  A certificate is required to collect the tax.

Meals & Rooms:  A tax of gross receipts per quarter for restaurants, bars, lodgings, etc.

Corporate Income:  A percentage of the corporation's net income.  Minimum of $250 per year.

Personal Income:  Approximately 24% of your federal income tax.

Fuel Gross Receipts:  A tax on the retail sale of fuel (e.g., propane, natural gas, coal, heating oil), if you sell over $10,000 per year.

Withholding: A tax you withhold and remit to the State on behalf of your employees.

Other State Taxes: There are special taxes on beverages, cigarettes, tobacco, solid waste, and others.