Vermont lesson 5 of 6
Vermont LLC taxes and licensing
Vermont has no franchise tax on LLCs, but pass-through LLCs doing business in the state owe a minimum Business Entity Income Tax, and Vermont-resident members pay the state's personal income tax on their share of profits.
How members are taxed
A Vermont LLC taxed as a partnership or disregarded entity passes income through to its members, who report their share on personal returns and pay Vermont's graduated personal income tax, which tops out at 8.75% for the highest bracket. Confirm current brackets with the Department of Taxes since they are adjusted periodically.
An LLC that elects C corporation treatment instead pays Vermont's corporate income tax, which is graduated up to 8.5%, rather than the personal income tax.
The $250 minimum business entity tax
LLCs taxed as partnerships or S corporations that do business in Vermont file a Business Entity Income Tax return and owe a minimum tax of $250, due even if the LLC has no net income for the year.
Budget for the $250 minimum business entity tax separately from the Secretary of State's $155 filing fee and $45 annual report fee, since it is owed to the Department of Taxes on a different schedule.
Sales tax and licensing
If you sell taxable goods or certain services, register with the Department of Taxes for a Vermont sales and use tax account before you start selling. Vermont has no single statewide business license; check with your municipality and any board that regulates your specific trade.
Key takeaways
- Pass-through members pay Vermont's graduated personal income tax, topping out at 8.75%.
- The $250 minimum Business Entity Income Tax applies to pass-through LLCs doing business in Vermont, even with no profit.
- There is no single statewide business license; check municipal and trade-specific requirements.
Frequently asked questions
Does every Vermont LLC owe the $250 minimum tax?
The $250 minimum applies to LLCs taxed as partnerships or S corporations that do business in Vermont and file the Business Entity Income Tax return. Confirm your specific LLC's obligation with the Department of Taxes.
What is a Vermont Blockchain-Based LLC?
A BBLLC is an LLC that has elected treatment under 11 V.S.A. 4171 through 4174, allowing it to use blockchain technology to maintain records or carry out terms of its operating agreement, while remaining subject to the same formation and tax rules as any other Vermont LLC.
Official sources
- Vermont Department of Taxes: Business Entity Income Tax
- Vermont Department of Taxes: Businesses
- 11 V.S.A. 4171: Blockchain-based limited liability companies, definitions
- 11 V.S.A. 4172: Blockchain-based limited liability companies, election
- 11 V.S.A. 4173: Blockchain-based limited liability companies, authority; requirements
Or let us file your Vermont LLC for you
Everything above is yours to use for free. If you would rather hand it over, we prepare and file the Articles of Organization (Form LLC-1(D)), act as your registered agent, and track your ongoing deadlines.
Last reviewed: September 2026 - reviewed by Gullia Filing Legal & Formation Team