Starting a Business in Vermont
Vermont is among the top states in the nation for its diverse manufacturing businesses such as Brewing, Tea, Ice Cream, Coffee, Wild Game and Fisheries. It is an especially good place for a startup company or other small to medium sized business to grow. In fact, the last years have produced exponentially more small businesses than that of large corporations. This is due to different factors such as communities that support local businesses, access to capital, and an economic environment that solidifies stability. Vermont businesses can benefit from a good amount of different incentive programs that can help promote growth and help with expansion. The most common are incentives that are given through tax credits, Sales and Use Tax exemptions, grant/loan programs, and benefits to companies who reside inside a Vermont Opportunity Zone.
STEPS TO STARTING A BUSINESS IN VERMONTThe Vermont Secretary of State facilitates business filings. After you establish a company, you will need to apply online for a Tax ID Number which you can use to get business credit, rent an office, obtain a business bank account, and look up Business Licenses. After applying for business license research and finalizing a Vermont business formation you could move on to other actions. These include checking the status of Form BR-400, looking up a Vermont sales tax rate or paying sales tax, and setting up a payroll account. If you make out of state sales to your customers, you may be liable for sales tax. It may also be necessary to file for a Multi-Jurisdictional Sales Tax Permit if you meet certain requirements. Once you have completed all of your administrative filing requirements, you can research benefit programs. Here are some of the incentives programs offered to businesses in Vermont:
- The Vermont Development Authority has collaborated with various lending institutions to offer low interest financing to companies of all sizes. Companies can use funds for business expansion and to provide job opportunities.
- The Vermont Employment Expansion Program gives cash grants to businesses that can either contribute capital investments, payroll expansion or create new jobs. Jobs must pay 1.4 times to 1.6 times the minimum wage (based on job location) to qualify. Credits are available once conditions are met.
- The Vermont Opportunity Zone Program provides benefits to businesses that either expand or relocate to state designated growth areas. Any business willing to situate itself inside an opportunity zone can take advantage of deferral on capital gains. The objective is to stimulate investment and bring growth to these distressed areas. The idea behind the programs is to lower the tax burden for businesses.
- Vermont offers a state tax credit to certain businesses that have qualified R & D activities within the state. The R & D tax credit is equivalent to 27% of the Federal R & D base credit. Credits can be taken against corporate or personal income tax obligations. It can be carried over for up to a ten year period.
- Another workforce development initiative is known as the Vermont Training Program. Pre-employment training grants are provided to businesses who want to hire new employees or expand skill sets of existing workers. Grants cover up to half of all training costs.