How To Get A Business License In Vermont (2024)

Business licenses are legal documents or permits granted by government agencies, enabling individuals or companies to legally operate within a specific geographical jurisdiction. These licenses serve as authorization to establish and conduct business activities and are issued by the local government.

In many cases, multiple licenses are required from various government departments and agencies in a single jurisdiction. The specific licenses needed can vary across countries, states and local municipalities. Small businesses may require a combination of licenses and permits from federal and state agencies, with the specific requirements and fees varying depending on the nature of the business, number of employees, location and government regulations in place.

Failure to obtain the necessary licenses and permits can result in penalties or even the closure of the business by government authorities.

Business License

In general, a business license grants you permission to operate a business of some kind, and it is typically associated with professional qualifications. For example, a cosmetologist must be licensed in the state where they operate their business. The requirements and costs for obtaining a business license can vary between city, state and federal levels of government. You can find the specific requirements through USAGov or find a legal expert to assist you.

Business Permit

A business permit, in general, is usually issued for safety tied to specific actions or operations. For example, you need a health permit if your business sells food or a building permit if you are renovating an existing location. Business permits may be required at different levels of government—such as city, state or federal—and their purpose is to ensure compliance with laws, regulations and safety standards.

You can find further information on required licenses and permits in Vermont by clicking here.

In Vermont, there is no specific business operating license issued or mandated at the state level. However, individual cities within the state may have their own requirements for local licenses. These local licenses can typically be obtained by contacting the city clerk’s office in your respective city.

In addition, the Office of Professional Regulation (OPR) has a system in place in Vermont to protect unethical practitioners through a system of licensure. This is achieved by supporting boards and advisor groups that oversee licensure of 50 professions. Visit the Vermont Secretary of State professions page to view a comprehensive list of professions regulated by the Vermont Office of Professional Regulation.

You can click on your profession to view forms and instructions. You can also apply, renew, update your application/license, request verification and learn about the requirements governing your profession.

For many small businesses, a combination of licenses and permits from state, local and federal agencies is necessary. The specific requirements and associated fees can differ based on factors such as the nature of your business activities, the business location and the regulations set by the government. Here’s a brief overview of what state, local and federal licensing looks like.

State: A state license is an official document issued by a state government agency that grants permission to an individual or business to engage in a specific activity or profession within the state. This license is to ensure that the individual or business meets certain standards in order to protect the public’s health, safety and welfare. If your business is a limited liability company (LLC), corporation, cooperative corporation, limited or limited liability partnership, mutual benefit enterprise (MBE) or nonprofit corporation, you are required to register your entity with the Secretary of State’s office. In addition, the state also issues occupational licenses for specific professions that require certification from a state-level agency. A few examples of state licenses that are typically required for occupations are:

• Doctors
• Lawyers
• Teachers
• Real estate agents
• Contractors

Local: A local license is issued by a county or city government and approves an individual or business to engage in specific activity locally or within a specific jurisdiction. Local licenses are typically required for activities that are specific to a particular area within the state. Licenses and permits required can vary depending on the location and the nature of your business. Each city/town and county has its own rules to ensure compliance with local laws, regulations and zoning requirements so that business activities are conducted in a safe and regulated manner. A few examples of local licenses and permits are:

• Health permits (restaurants, food preparation, sales)
• Zoning and land permits (business signs, parking, home business)
• Building permits (construction, electrical, renovation)
• Fire marshal/department permits and certificates

Federal: A federal license or permit is an official federal document issued by a government agency that grants permission to an individual or business to engage in a specific activity or profession that is under the regulation of a federal agency. Some examples of business activities regulated by a federal agency are:

• Alcoholic beverages
• Agriculture
• Aviation
• Firearms, ammunition and explosives
• Fish and wildlife
• Commercial fisheries
• Maritime transportation
• Nuclear energy
• Radio and television broadcasting
• Transportation and logistics

In addition, you need a sales and use tax license from the state Department of Taxes and you may also need to obtain sales and use tax licenses from municipalities where you do business.

In Vermont, there is no one-size-fits-all business license that is issued or mandated at the state level. However, individual cities within the state may have their own requirements for local licenses. These local licenses can typically be obtained by contacting the city clerk’s office in your respective city. Let’s take a look at some of the essential steps you must do to start your business. As a side note, there are many free resources available in each city located in Vermont to assist you at every step of the way.

Step 1. Develop a Business Plan

A business plan is a written document that outlines the goals, strategies and financial projections of a business. It outlines each stage of starting and managing your business, providing key elements, skills and goals. For example, a sample plan may include:

• Introduction
• Marketing
• Financial Management
• Operations
• Concluding Statement

Step 2. Register Your Legal Structure and Trade Name

To start and operate a business in Vermont, there are several important steps and registrations you need to complete. Here is a clear structure of what the process looks like:

• Register your trade name (DBA): If you plan to operate your business under a name different from your own, you must register the trade name with the Secretary of State’s office. This can be done online with the Vermont Secretary of State.
• Register your legal structure: As part of the business planning process, you need to choose and register the legal structure for your business with the state of Vermont. Options include limited and limited liability partnership, corporation, cooperative, MBE, nonprofit, LLC or L3C. Sole proprietors and general partnerships do not need to register or file forms.

Step 3. Apply for Federal, State and City Tax Accounts

To ensure compliance with tax regulations, it is important to register with the appropriate tax authorities. Here is an idea of what steps are required:

• Register with the Vermont Department of Taxes: Determine the taxes that apply to your business by consulting with the Vermont Department of Taxes. Most businesses that operate in Vermont must first register with the Vermont Department of Taxes. It administers various taxes, including:
  • Personal income tax
  • Sales and use tax
  • Withholding tax
  • Meals and rooms tax
  • Business taxes
  • Miscellaneous taxes
• Register with the Internal Revenue Service: The IRS is responsible for federal tax regulations. This means most businesses need to file for an EIN (federal employer identification number). This serves as a way for the IRS to track income and payroll tax liabilities and payments for your business. Additionally, an EIN can be used to identify your business for state and local tax purposes, as well as for various financial transactions.

In addition, if your business involves selling taxable goods, meals, rooms or alcohol, or if you have employees, you must obtain a user account for the state’s Online Business Service Center. You can register online through the Vermont Secretary of State’s Online Business Service Center.

Step 4. Obtain Insurance

Even if your business has only one employee, it is mandatory to have workers’ compensation insurance in Vermont. The Vermont Department of Labor is responsible for administering Workers’ Compensation. Additionally, depending on the nature of your business, you may require other types of insurance such as:

• General
• Property
• Professional
• Business interruption
• Product

To understand your insurance options and tailor a package that suits your needs, it may be a good idea to consult insurance brokers who can provide quotes from different agencies.

Step 5. Look Into Local Permits, Zoning and Licenses

To check zoning requirements or obtain local permits and licenses, visit your local office or visit the online website specific to the city in which you live. This should provide you with step-by-step guidance on which city permits you will need in order to operate your business in compliance. For example, below are a few references pertaining to the city of Burlington:

• Burlington Zoning Help Guides
• Burlington Zoning Enforcement
• Burlington Public Works
• Burlington Official Zoning Map
• Doing Business in Burlington

The city clerk for the city in which your business is located will provide you with information and forms regarding specific licenses and permits needed to operate your business. Some common licenses and permits include:

• Liquor license
• Catering license
• Entertainment permit
• Cannabis license

Lastly, Vermont’s Secretary of State lists various professions regulated by the Vermont Office of Professional Regulation. You can visit your professions page for more detailed information including contact information for your licensing administrator at http://sos.vermont.gov/opr/professions/.