In 2017, The Green Mountain state’s gross domestic product (GDP) was $19.3 billion, making it the second-smallest among the 50 states. Some sectors that are vital to the state’s revenue are the Federal government ($3 billion), Real estate ($2.6 billion), manufacturing ($2.2 billion), Health care ($2.1 billion) and retail ($1.9 billion).
Vermont has the 14th highest tax rate of the 50 states particularly corporate and personal income tax rates. Factor in an inflated cost of living, exorbitant real estate and high employee compensation resulting in many entrepreneurs having a hard time setting up shop in the state.
However, Vermont’s natural beauty, stable economy, strong community support and reputation for outdoor recreation and healthy living are the reasons that small business owners are continuing to invest in the state.
Let’s have a look at some statistics on small businesses (SMBs) from the state of Vermont:
- Vermont has 78,759 small firms that represent 99% of all businesses in the state.
- Before forming a corporation in the state, you need to file your Articles of Incorporation with the Secretary of State together with a $125 filing fee.
- Vermont’s small businesses employ a total of 157,322 workers who account for 60.8% of the entire state labor force.
- Private-sector employment in Vermont decreased 25.4% during the 12-month period ending in April 2020.
- The median income for self-employed individuals at their own incorporated businesses is $45,819 which is $22,884 more than their counterparts with unincorporated businesses.
- To form an LLC (Limited Liability Company) in Vermont, you need to file your Articles of Organization with the Secretary of State. The filing fee is $125.
- State law requires that every new Vermont LLC designates a Vermont registered agent that will be available during regular business hours at a physical address within the state.
- The top 3 industries with the largest share of small business employees include:
- Health Care and Social Assistance – 23,441.
- Accommodation and Food Services – 21,346.
- Retail Trade – 21,282.
- Vermont has 967 small businesses in the export business that account for 19.3% of the state’s $2.8 billion worth of export revenue.
- Out of the over 78,000 small business owners, 2,331 or 0.03% are self-employed minorities.
- Vermont taxes personal income at rates ranging from 3.55% to 8.95% while the annual business entity tax for S corporations is a flat rate of $250.
- Vermont also has an optional franchise tax that applies to so-called digital business entities. Companies electing to pay this tax are subject to either:
- A .02% tax on total assets.
- A tax based on the number of authorized shares of stock, with a minimum tax of $250 and a maximum tax of $500,000.
- In 2018, banks in Vermont issued 12,165 loans under $100,000 to small businesses while reporting under the Community Reinvestment Act. The total value of the loans was $172.9 million.
- Small businesses generated 1,635 net jobs in 2019. Firms with fewer than 20 employees created 1,537 net jobs while firms with 100-499 employees lost 24 net jobs.
- Mining, Quarrying, Oil and Gas Extraction sectors have the smallest share of small businesses with a cumulative 88 working in them.