CobaltProsper

How to start an LLC in Vermont

By Brent Chudoba, editor Updated

Forming an LLC in Vermont costs $155 to file the Articles of Organization with the Vermont Secretary of State. After that you file an annual report of $45. Vermont also charges a franchise or business tax (details below). Filing fee is $155 for Articles of Organization (11 V.S.A. § 4023, fee set by § 4012), with no additional charge for online filing (bizfilings.vermont.gov), online filings typically process in under 1 business day vs. 7-10 business days by mail. Annual report fee is $45 (11 V.S.A. § 4033), due within the first three months following the LLC's fiscal-year end (NOT a fixed calendar date, unlike most states). Every LLC must continuously maintain an agent for service of process (11 V.S.A. § 4007, referencing § 1655). The real-cost gotcha: a multi-member (or S-corp-electing) LLC also owes Vermont's separate $250/year minimum Business Entity Income Tax (see franchiseTax) on top of the $45 SOS annual report fee, a cost most LLC-formation guides quote only the $155+$45 SOS figures and omit.

How much does it cost to start an LLC in Vermont?

Vermont LLC costs (reviewed August 29, 2026)
ItemCost
Filing fee (Articles of Organization)$155
Annual report$45/year
Franchise or business taxYes, see below
Registered agentRequired

Source: Vermont Secretary of State, fee schedule reviewed August 29, 2026.

What are the steps to form an LLC in Vermont?

  1. Name your LLC. Pick a name that is available and meets Vermont naming rules, then check it against the Secretary of State's business database.
  2. Appoint a registered agent. Vermont requires a registered agent with a physical in-state address to receive legal mail. You can be your own agent, or hire a service.
  3. File the Articles of Organization. Submit it to the Vermont Secretary of State and pay the $155 fee. This is the step that legally creates the LLC.
  4. Get an EIN from the IRS. It is free and takes minutes. Do not pay a service for it. See how to get an EIN free from the IRS.
  5. Calendar your annual report. Vermont charges $45 to keep the LLC in good standing. Missing it risks penalties or administrative dissolution.
  6. Open a business bank account. Keep business money separate from personal money so your liability protection holds up.

Does Vermont have a franchise tax on an LLC?

Vermont has no franchise tax by that name for LLCs, but functionally similar is the $250/year minimum Business Entity Income Tax (32 V.S.A. Chapter 151, Subchapter 4, e.g. § 5920) that applies to any LLC that is NOT a single-member disregarded entity, i.e., any multi-member LLC taxed as a partnership by default, or any LLC that elects S-corporation taxation, filed on Form BI-471 (or the simplified BI-476 short form for VT-resident-owners-only entities owing only the $250 minimum). A default single-member LLC (disregarded entity, reported on the owner's personal IN-111 return) does NOT owe this $250 tax and does not file BI-471/BI-476.

How is an LLC taxed in Vermont?

By default, an LLC is a pass-through entity: it pays no income tax itself, and the profits flow to the owners' personal returns. Vermont has a state individual income tax with a top rate of 8.75% (graduated brackets), so those profits are taxed on your Vermont return on top of federal tax. Four brackets, same rate structure and order for tax years 2025 and 2026 (only the dollar thresholds are inflation-indexed between the two years). Officially published Tax Year 2025 Vermont Tax Rate Schedules (in effect for the return filers are completing during the current 2026 filing season), Single (Schedule X): 3.35% up to $49,400; 6.60% (base $1,655) from $49,400-$119,700; 7.60% (base $6,295) from $119,700-$249,700; 8.75% (base $16,175) above $249,700. Married Filing Jointly (Schedule Y-1): 3.35% up to $75,000; 6.60% (base $2,513, applies $75,000-$82,500, then base $2,764) $82,500-$199,450; 7.60% (base $10,482) $199,450-$304,000; 8.75% (base $18,428) above $304,000. Head of Household (Schedule Z): 3.35% to $66,200; 6.60% (base $2,218/$2,799) $66,200-$171,000; 7.60% (base $9,135) $171,000-$276,850; 8.75% (base $17,179) above $276,850. Married Filing Separately (Schedule Y-2): 3.35% to $41,250; 6.60% (base $1,382/$3,609) $41,250-$99,725; 7.60% (base $5,241) $99,725-$152,000; 8.75% (base $9,214) above $152,000. For AGI over $150,000, tax is the GREATER of the schedule calculation above or 3% of AGI (less interest from U.S. obligations), an alternative minimum-style floor. Tax year 2026 (wages paid/income earned in 2026) uses the identical four rates (3.35/6.60/7.60/8.75%) in the identical order, confirmed via the Department's 2026 withholding Percentage Method Tables, effective Jan. 1, 2026, whose annual-payroll bracket breakpoints for a single filer claiming 0 allowances ($3,925 built-in standard-deduction band, then 3.35% to $54,675, 6.60% to $126,775 [base $1,700.13], 7.60% to $260,225 [base $6,458.73], 8.75% above [base $16,600.93]) net of that $3,925 standard-deduction offset reproduce the same base-tax dollars as the 2025 Schedule X once inflation-indexed, but the Department had not yet published a standalone finalized 'Tax Year 2026 Vermont Tax Rate Schedules' filing-return document as of this pass (confirmed via a direct 404 on the file-naming pattern the Department uses for that document), so the precise TY2026 taxable-income breakpoints are not independently citable to a dedicated primary rate-schedule PDF and are omitted here rather than derived/estimated. 32 V.S.A. § 5822.

An LLC can also elect to be taxed as an S-corp, which changes how owners pay self-employment tax. See LLC vs S-corp vs sole proprietorship and how self-employment tax works.

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