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1.  Register your business name with the Vermont Secretary of State (802·828·2386).  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 5 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 or 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 registers trademarks, issues certificates of incorporation for domestic corporations, administers Limited Liability Companies, administers Limited Partnership Registration, and administers Amusement Park Ride Regulation.

2.  Register with the Vermont Department of Taxes (802·828·2551).  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. 

3.  Register with the Internal Revenue Service (800·859·9308). 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 payment 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:  199 Main Street, Burlington.

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 (802·865·7000):  Based on assessed value, for commercial property owners only.

Business Personal Property Tax (802·865·7114):  For all businesses.  Request a form from the City Assessors office, file in April of each year.  If you do not file for this tax, you may be subject to an estimated assessment.

Downtown District Tax (802·865·7000):  Based on assessed value, for commercial property owners in the Downtown District.

Meals and Rooms Tax (802·865·7000):  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 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.

State Tax Definitions

Sales & Use:  A tax on the sale and rental of goods, both acquired 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 Tax:  A percentage of the corporation's net income.  Minimum of $250 per year.

Personal Income Tax:  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, etc.), if you sell over $10,000 per year.

Withholding Tax on employees:  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 other items.

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