LLCs present numerous advantages for entrepreneurs in Vermont. Yet, beyond the initial registration and filing fee to establish your LLC, there are ongoing regulatory responsibilities and costs. These obligations and expenses are necessary to keep your LLC in good standing with the state. This guide will delve into the annual requirements and anticipated taxes and fees for LLCs in Vermont. By understanding these yearly requirements and costs, entrepreneurs intending to establish an LLC in Vermont can better prepare for their business launch and budget effectively.
All Vermont LLCs are required to file an annual report with the Vermont Secretary of State. This report is due within the first three months following the end of the LLC's fiscal year. For example, if your LLC's fiscal year ends in December, the annual report is due between January 1 and March 31. The filing fee for the Vermont LLC annual report is $35 as of 2024. The report can be filed online through the Vermont Secretary of State's Online Business Service Center.
The annual report requires you to confirm or update basic information about your Vermont LLC, such as the LLC's name, the LLC's registered agent and registered office address and the LLC's members and managers. Once filed online, the annual report is processed and approved within 24 hours.
There is a $25 late fee assessed by the Vermont Secretary of State for failing to file the annual report on time. In addition to the late fee, if the LLC does not file the annual report within the required timeframe (3 months after the fiscal year-end), the state can dissolve or revoke the LLC's registration. The state does not charge any other late fees, but the business will lose its good standing with the state if the report is not filed, which can put the LLC's liability protection and tax status at risk.
In order to reinstate the LLC's good standing after it has been dissolved or revoked, the business must file reinstatement documents, pay the $25 penalty fee, and bring all missing reports and filing fees up to date.
In addition to paying the annual report fee, LLCs in the state of Vermont are required to pay a Business Entity Tax (BET), a privilege tax that needs to be paid yearly to the Vermont Department of Taxes. LLCs will pay a minimum of $250 a year in Business Entity Tax. This is referred to as the "Minimum Entity Tax." Beyond this minimum payment, the BET tax rate is a flat rate that is based on the LLC's income. The BET rate is 6% on the company's first $10,000 of net income, 7% on income between $10,001 and $25,000, and 8.5% on income over $25,000. LLCs will need to file the Business Income Tax Return (Form BI-471 or BI-476) to report their BET to the state. This form can be submitted online through the myVTax system. The BET due date is the same date as the LLC's federal income tax return. LLCs may also be required to pay estimated quarterly payments may also be required.
In Vermont, LLCs are required to designate a registered agent to handle legal documents and official notices for their business. While some business owners may opt to fulfill this role themselves or appoint someone internally, many prefer to enlist the services of a professional registered agent.
The annual fees for registered agent services vary based on the chosen provider. At MyLLC.com, we offer registered agent services starting at $129 per year, with multi-year plans available for as low as $87 per year. Professional registered agent services offer convenience and reliability, which contribute to operational efficiency and regulatory compliance. Therefore, using a dedicated registered agent service is highly recommended and considered best business practice.
After establishing your Vermont LLC, you'll likely need to secure specific business licenses and permits to ensure lawful operations. Consequently, Vermont LLCs may encounter expenses related to obtaining and renewing these licenses and permits.
The type of licenses and permits necessary for a Vermont LLC hinges on several factors, including the type of business, local jurisdiction, and industry. Examples include professional licenses, building permits, environmental permits, health department permits and liquor licenses.
The costs associated with acquiring these licenses and permits can vary significantly based on their type and the extent of business activities. Renewal requirements for Vermont business licenses and permits may also vary and depend on the specific license or permit and the government body that issues it. While some licenses and permits require annual renewal fees, others may be a one-time purchase and won't have to be renewed.
If your Vermont LLC will be selling taxable goods or services, you'll need to register for a Sales and Use Tax Account with the Vermont Department of Taxes. You'll then be responsible for collecting and remitting sales tax, filing returns, and making payments on a monthly, quarterly, or annual basis depending on your sales volume.
In addition to Vermont's statewide sales tax, local municipalities have the ability to charge their own added sales tax. In order to determine the specific taxes applicable to your business at the local level, it's essential to consult with your local governing body.
Most LLCs in Vermont that have employees are subject to various state taxes related to employment. These include payroll taxes such as the Vermont Unemployment Insurance Tax, which funds unemployment benefits for eligible workers. Employers may also be responsible for withholding and remitting state income tax from employee wages.
LLCs in Vermont may be subject to industry-specific taxes depending on the nature of their business activities. Businesses involved in certain regulated industries may face additional taxes or regulatory fees. These could include meals and room taxes for lodging establishments or sales taxes on alcoholic beverages. Similarly, businesses engaged in environmentally sensitive industries might encounter specialized taxes or fees related to environmental protection or resource usage. It's crucial for LLCs to understand and comply with any industry-specific tax obligations to ensure legal compliance and avoid penalties. Consulting with a tax professional or relevant industry authorities can provide guidance on specific tax requirements applicable to your business.
In addition to hiring a registered agent service, you may choose to use other professional services such as accountants, attorneys, or other professionals to assist with tax preparation, legal compliance, or other aspects of running your LLC. You may need these services only once.
At MyLLC.com, we recognize the intricacies of managing an LLC in Vermont and meeting all regulatory requirements. Our expert team is committed to simplifying these procedures on your behalf while guaranteeing your business adheres to state regulations. Whether you need assistance with registered agent services, annual report submissions, or other aspects of Vermont's regulatory environment, we've got you covered. If you're still in the process of launching your business, we can also aid in LLC formation. Get in touch today to discover how we can offer support to your business efforts, helping you thrive within The Green Mountain State.
Sources:
1. https://www.nolo.com/legal-encyclopedia/annual-report-tax-filing-requirements-vermont-llcs.html
2. https://www.zenbusiness.com/vermont-filing-fees/
3. https://sos.vermont.gov/corporations/fees/
4. https://www.wolterskluwer.com/en/solutions/bizfilings/state-guides/vermont-llc-requirements
5. https://www.llcuniversity.com/llc-annual-fees-by-state/
