Vermont Business License

If you’re planning on starting a business in Vermont, you’re likely wondering about the types of permits and licenses you’ll need, as well as their associated costs.

Vermont business license requirements are influenced by various factors, including your business’s location within the state, the industry you’re in, and the scale of your operations.

Since navigating through Vermont’s specific regulations can be complex, we’ve broken down everything you need to know in easy-to-follow, detailed steps.

Let’s get started!

Do I Need a Business License in Vermont

In Vermont, businesses are required to obtain various licenses and permits at the local, state, and federal levels. Here’s a general breakdown:

Type of Business

Below, we’ve detailed common ways in which your business type can dictate the licenses you’ll be required to obtain, as well as specific examples of these:

• Vermont Sales Tax License: Businesses in Vermont that sell goods or taxable services are required to have a Sales and Use Tax License from the Vermont Department of Taxes. This license allows you to legally collect sales tax from consumers, which you will then remit to the state
• Professional and Occupational Licenses: In Vermont, certain professions (e.g., attorneys, accountants, healthcare providers, etc.) are regulated by the Vermont Office of Professional Regulation. These professions often require a specific board certification or license in order to operate legally within the state
• Health Permits for Food Establishments: If your business involves the preparation or sale of food, you’ll need to apply for a Health Permit from the Vermont Department of Health. This permit ensures that your operation adheres to all of the food safety laws and regulations that are set by the state

However, this is not the only factor influencing the exact combination of licenses you’ll need — the location of your business within Vermont plays an important role as well.

Location

In this section, we’ve provided a succinct overview of the potential licenses and permits that your business may need due to local, state, and federal requirements:

• Local: Local permit needs can differ significantly depending on the specific municipality and business in question. For example, if you’re looking to open a retail store in Burlington, you would need a zoning permit from the Office of City Planning. On the other hand, restaurants in Burlington are required to obtain a food establishment permit from the city’s Health Department
• State: The type of permits required at the state level often depends on your specific industry. Retail businesses, for example, need a Sales and Use Tax License. If you’re in the food industry, you’d need a Food and Lodging License from the Vermont Department of Health
• Federal: While the majority of small businesses are exempt from federal licenses, sectors such as agriculture and alcohol production are federally regulated, and can thus require additional licensing. For instance, livestock-related businesses may require a permit from the US Department of Agriculture

Since the exact permits and licenses your business will need are entirely unique to your situation, you’ll have to conduct thorough research into your own local, state, and federal regulations to smoothly launch your business.

Alternatively, many entrepreneurs opt to leverage the expertise of third-party services to handle this on their behalf.

How to Get a Business License in Vermont

In order to get your business license(s) in Vermont, you will need to complete the following steps:

• Form Your Business
• Obtain an Employer Identification Number (EIN)
• Apply for the Required Licenses and Permits

Let’s take a look at each step in more detail below.

Step 1: Form Your Business

Before setting out to obtain a business license in Vermont, it’s pivotal that you first choose an appropriate structure for your business. Sole proprietorships, general partnerships, and corporations are all common choices, however it’s often seen as the most advantageous for small businesses in Vermont to register as a Limited Liability Company (LLC). Here are a few reasons for why:

• Limited Liability: Members are protected from personal liability for business debts, safeguarding personal assets
• Tax Benefits: LLCs typically enjoy a pass-through tax treatment, avoiding the double taxation that corporations are subjected to
• Management Flexibility: LLCs allow for flexibility in management structure, either being member-managed or manager-managed based on the preferences outlined in the certificate of formation
• Ease of Formation: With the Vermont Secretary of State providing forms that meet the minimum state law requirements and the option to file online, setting up an LLC is relatively straightforward

Many small business owners opt to avoid the tricky process of forming an LLC by instead leveraging the help of third-party LLC formation services

Step 2: Obtain an EIN

The second step you’ll need to complete before applying for your business license is to obtain your EIN. This is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses in the United States so that their financial transactions can be identified and tracked.

An EIN is often necessitated when applying for various permits and licenses as it allows local and state governments to ensure your business is operating within the confines of the law. You can obtain it in a number of ways:

• Online: You can apply for your EIN on the IRS’s official website by using the EIN Assistant. You should be granted your EIN shortly after completing this application
• By Fax/Mail: After completing Form SS-4, you can apply for an EIN by submitting it to the IRS via mail or fax
• By Phone: International applicants and businesses located outside US Territories are required to call the IRS at (267) 941-1099 to obtain their EIN — which they should receive during this call

Note: If you are a sole proprietor, you will be able to use your Social Security Number (SSN) instead (as long as you do not have employees).

Step 3: Apply for Licenses and Permits

After settling on the appropriate structure for your business and initiating the application for your EIN, the next step is to focus on securing the necessary licenses and permits to operate legally within your locale and industry.

• Local Licenses: In Vermont, local licenses can vary by municipality, but many towns have a common procedure. For example, if you are looking to open a local retail store, you might first need to apply for a local business license from the town clerk’s office. This often involves submitting an application form that asks for details like your business name, location, and the goods or services you plan to offer. For businesses like adult entertainment establishments, waste management facilities, or large-scale event venues, local ordinances may require a public hearing or city council approval to ensure they meet community standards and zoning regulations
• Statewide Licenses: To apply for statewide licenses in Vermont, you will often need to apply online through the Vermont Secretary of State website. Here, you’ll find forms and instructions for different types of businesses. Specialized permits, like those for environmental waste management, have their own application procedures through specific state departments like the Agency of Natural Resources. If you’re interested in obtaining professional licensing, you can have a look at the Professional Regulation section of the SOS website
• Federal Licenses: While the federal government doesn’t mandate licenses for general business operations, if your business falls under any government-regulated category, such as agriculture, fishing, firearms, and alcohol sales, it may be required to obtain additional federal licenses or permits

Note: For an exhaustive list of required licenses and application steps, we recommend visiting the Vermont Secretary of State’s Business Services Division website.

Step 4: Renewal of Licenses and Permits

In Vermont, you’ll need to renew most business licenses and permits in order to keep them valid. Renewal periods usually range from one to three years, depending on the specific license and/or permit in question.

Keep in mind that failing to renew on time can lead to penalties or even your business being shut down, and so it’s really important that you spend some time in order to research this topic proactively.

If you’re unclear about your renewal needs, you can consult with the Vermont Secretary of State’s Business Services Division or the agency that issued your license.

Alternatively, you can use a third-party service or a professional attorney for this process. This can be a good choice if you want to ensure that you avoid potential fines, as well as if you want to be as time-efficient as possible.

How Much is a Business License in Vermont

The total cost of your Vermont business licenses and permits will depend on several factors, including your business’s niche, location, and how many licenses and/or permits you need to obtain.

For instance, applying for a Retail Sales and Use Tax Permit may have a minimal fee of around $30, while a Liquor License for a restaurant could run upwards of $200 to $500 annually, depending on the location and size of the establishment.

Fees can also be recurring; the aforementioned Liquor License would require yearly renewal, with the renewal fee typically matching the original application fee. Environmental permits for waste management or construction can run even higher, with fees that may include both an initial application cost and ongoing charges for inspections; these can amount to hundreds or even thousands of dollars over time.

Generally speaking, the cost of obtaining all necessary licenses can range from as low as a few hundred dollars for a small, service-based business to several thousand for businesses requiring multiple specialized licenses.