Vermont sits in the north of the United States and is part of New England. The "Green Mountain State" covers just under 24,000 km² and has New York to the west, Massachusetts to the south and New Hampshire to the east as its American neighbors. To the north lies Canada. With 625,000 residents, it is the second least populous state. The capital, Montpelier, had fewer than 8,000 residents at the last census (2010).
Vermont lives up to its name as the "Green Mountain State". This idyllic state is known for its natural forests and beautiful places like the Green Mountains, Mount Mansfield and Lake Champlain.
Local, national and international businesses thrive in Vermont thanks to support from the community and the government and a real spirit of collaboration among peers. Startups, growing companies and innovators succeed here because Vermont offers the human, social and financial capital they need. In 2019, the "Green Mountain State" ranked second in the national Opportunity Index. Just as remarkable: almost 80 percent of Vermont startups are still active one year after launch (Kauffman Foundation, 2020).
Vermont is home to globally competitive companies and many well-known brands. Originality is encouraged, quality is respected, and collaboration helps everyone do their best work. If you want to start or grow a business, Vermont has everything you need.
Socially responsible businesses
Businesses here take social responsibility seriously. In 2010, Vermont became the second state in the country to pass benefit corporation legislation. It lets new companies form as benefit corporations and existing companies reorganize as one. The benefit corporation framework gives companies and investors the flexibility to weigh their mission and public benefit for all stakeholders, shareholders included, alongside profit over the long term, even in exit transactions such as IPOs and acquisitions.
Today there are 38 certified B Corps, from well-known food makers like Cabot Creamery Co-op and Ben & Jerry's to utilities like Green Mountain Power, financial institutions like Mascoma Bank, retail brands like Seventh Generation and advanced manufacturers like Chroma Technology Corp. Vermont is among the ten states with the most B Corps per capita.
B Corp certification gives companies another tool to run their operations and programs to the highest social and environmental standards. You can read more about benefit corporations here.
A workforce with a great reputation
Vermont's workforce is known for a strong work ethic and fine craftsmanship. The state consistently ranks near the top for the quality of its talent pipeline, both in university and college programs and in vocational training.
Vermont's ongoing commitment to workforce innovation produces workers trained in new technologies. Organizations like BTV Ignite and Burlington Code Academy offer coding and software training for tech professionals. The Community College of Vermont offers certificate programs in manufacturing, healthcare and finance, while Vermont Technical College offers continuing education in trades, manufacturing, human resources and teaching.
The Vermont Department of Labor offers employers a wide range of workforce resources to hire and train both current and new staff. Companies can, for example, sign up for the weekly regional #HiringVT2Day Virtual Job Fairs. The "Green Mountain State" knows how much a skilled workforce matters and works hard to provide one.
Income tax in Vermont
Vermont levies an income tax of 3.35 to 8.75%, depending on income. Federal income tax applies on top.
Corporate tax in Vermont
Vermont levies a corporate tax of up to 8.5% (graduated, starting at 6%). Federal corporate tax applies on top.
Sales tax in Vermont
The USA has no VAT on the European model. Instead, states, counties and municipalities levy a local sales tax on the sale of goods (but not services).
Vermont sales tax rate
The state sales tax in Vermont is 6%. Cities and counties add an average of 0.22%, for a combined average of 6.22%.
Vermont nexus laws & sales tax
Learn more about economic nexus laws and sales tax.
Effective date
July 1, 2018
Included transactions:
Sales of tangible personal property, electronically delivered products or services in the state, where the retailer regularly or systematically solicits sales from customers in the state
Treatment of exempt sales:
Exempt sales and exempt services count toward the threshold. However, businesses that sell only exempt items into Vermont do not need to register for a sales tax account.
Trigger:
Sales or transactions
Sales/transaction threshold:
$100,000 or 200 transactions
Evaluation period:
The threshold applies to the preceding 12-month period and should be reassessed quarterly
Additional information:
- Registration requirements: A remote business must register to collect and remit Vermont sales tax within 30 days of exceeding the economic nexus threshold. Sellers must check at the end of each quarter whether they have met the Vermont threshold. For more, see the Wayfair FAQs.
- South Dakota v. Wayfair
- H.873
Vermont marketplace sellers & sales tax
Learn more about registration requirements for marketplace sellers
Effective date for marketplace facilitators:
June 1, 2019
Economic nexus threshold:
More than $100,000 in gross sales or 200 or more transactions in Vermont during the preceding 12-month period. Remote sellers should include marketplace sales when calculating the threshold. Marketplace facilitators count only sales facilitated through the marketplace.
Registration requirements:
- Remote multichannel sellers: Once you exceed the economic nexus threshold, you must register with the Vermont Department of Taxes and collect Vermont sales tax on sales not taxed by a marketplace facilitator.
- Remote marketplace sellers: You must register once you exceed the economic nexus threshold. Contact the Vermont Department of Taxes for more information.
- In-state multichannel sellers: You must register with the Vermont Department of Taxes and collect tax on sales not taxed by a marketplace facilitator.
- In-state marketplace sellers: You must register. Contact the Vermont Department of Taxes for more information.
- Learn more here.
For a look at every state, see our overview of the US states. Whether Vermont or another state is the right home for your US company is covered in our guide Which US state is best for your company?, and the basics are in the guide to forming a company in the USA.
How we help with Vermont:
We support you with company formation, taxes and visas, including when Vermont is your destination. It usually starts with a consultation; you'll find the routes to your own company under US Company Formation.