If you’re moving your practice from a different state, there’s an eighth step you’ll need to follow: Learn how to pay taxes in multiple states.
This article covers the bare essentials needed to get your therapy practice up and running in Vermont.
1. Local Zoning Laws and Regulations in Vermont
Vermont boasts 14 counties. Before you settle on a location for your therapy practice—even if that location is your own home—you must make sure the local zoning allows you to operate there.
The local zoning regulations in Vermont are defined by municipalities, which may define different and separate zoning districts and identify within these districts which land uses are permitted as of right and which are not. Vermont requires zoning bylaws to be applied consistently across all properties within a given zone. Communities are not required to regulate land use and development through zoning or other bylaws, but nearly 60% of Vermont municipalities have adopted zoning bylaws. The Vermont Institute for Government provides an introduction to planning and zoning in Vermont. Dimensional standards and fire separation requirements already regulate the size and placement of buildings, so there is no need to arbitrarily regulate them.
2. Business Name Search in Vermont
To register a business name in Vermont, you need to register your business with the state by filing the Articles of Organization or Articles of Incorporation with the Vermont Secretary of State. You can apply online or by mail. If you want to change the legal name of your LLC or corporation, filing an amendment to the legal name of an existing business is your best option. You can submit this online via the Vermont Secretary of State along with the $25 filing fee. To reserve a business name in Vermont, you need to file a Vermont Business Name Reservation form with the Vermont Secretary of State and pay the $20 filing fee.
How to set up a DBA in Vermont:
- Vermont assumed business name search
- File your Vermont DBA with the Secretary of State’s Corporation Division
- Pay Vermont DBA filing fees
To register a DBA (Doing Business As) name, you can complete and submit the Assumed Business Name Registration form online and pay the $50 fee. If you’re more comfortable filing a paper form, you can request a form, print it out, complete it, and mail it in along with payment. The Vermont business name must be renewed every five years, and the renewal fee is $40.
3. Business Structure in Vermont
The state of Vermont recognizes various types of business structures, including Sole Proprietorship, Partnership, Single Member LLC, LLC, S-Corporation, C-Corporation, Federal Government, Vermont State Government, and 501(c)(3) Tax-exempt Nonprofit Organization.
- A Sole Proprietorship is a type of business entity that is owned and run by one individual, and there is no legal distinction between the owner and the business.
- A Partnership is an association between two or more people in business seeking a profit.
- An LLC (Limited Liability Company) provides personal liability protection without the tax burden that comes with running a corporation.
- An S-Corporation is a hybrid between a corporation, general partnership, and sole proprietorship.
- A C-corporation is a separate legal entity from its owners, making it easier to raise money, issue stock, and transfer ownership.
4. Register Your Business in Vermont
To register and incorporate a business in therapy practices in Vermont, you can follow the steps to form an LLC in Vermont. First, you need to file a Vermont Business Name Reservation form with the Vermont Secretary of State and pay the $20 filing fee. Then, you need to complete and submit the Vermont Articles of Organization to the Vermont Secretary of State and pay the $125 filing fee. You also need to designate a registered agent when you file Articles of Organization with the Secretary of State. Additionally, you may need to obtain specific licenses from the state, such as a professional license. The cost to register an LLC in Vermont is $125.
5. Business Licenses & Permits in Vermont
To operate a therapy practice in Vermont, you will need to obtain the appropriate licenses and permits.
- Allied Mental Health License: The Vermont Office of Professional Regulation’s Board of Allied Mental Health licenses clinical mental health counselors and marriage and family therapists. You can apply, renew, update an application/license, request a verification, and more on their website.
- Non-Licensed Psychotherapist Roster: All individuals who provide psychotherapy services must register for the Board’s roster of non-licensed, non-certified psychotherapists using the online portal. Applicants must submit a request for permission to test.
- Vermont Counseling License: Vermont has rigorous licensure requirements for the major types of professional counseling. After completing your education, you will be ready to begin the licensure process with the appropriate Vermont licensing body. The Vermont Office of Professional Regulation’s Board of Allied Mental Health licenses clinical mental health counselors and marriage and family therapists. You will need to complete qualifying graduate programs, work under supervision for two years, and pass a series of examinations.
- Vermont Psychological Examiners License: The Vermont Board of Psychological Examiners is the licensing authority for both doctorate- and master-level psychologists in Vermont.
- Limited Training License: If you are a graduate student in counseling or psychology, you may be eligible for a limited training license.
6. Business Insurance in Vermont
To operate a therapy practice in Vermont, you will need to obtain the appropriate business insurance.
- General Liability Insurance: Vermont general liability insurance coverage helps protect your business from property damage claims and bodily injury claims, in addition to personal and advertising injury claims that could put your business at risk.
- Professional Liability Insurance: Professional liability insurance is essential for all massage therapists and other public health practitioners in Vermont. It helps cover your business’s expenses when a lawsuit is filed against you.
- Workers’ Compensation Insurance: If you have employees, you will need to obtain workers’ compensation insurance.
It is important to note that there may be additional types of insurance required depending on the specific needs of your therapy practice. To get business insurance in Vermont, you can contact an insurance company directly.The cost of business insurance varies depending on the type and amount of coverage you need, as well as other factors such as the size of your business and the industry you are in.
7. Business Taxes in Vermont
To file taxes for a business in Vermont, businesses should follow these steps:
Determine if you need to file an annual income tax return. Almost all businesses that have any operations or activity in Vermont are required to file an annual income tax return.
- Determine your Vermont income tax rate. The Vermont income tax rate varies between 3.35 and 8.75 percent, depending on how much you earn.
- Register for state tax numbers. Businesses should complete form S-1, which is available at www.state.vt.us/tax.
- Establish your Vermont business’s corporate income tax obligations. The corporate income tax rate in Vermont is 6% for net income between $0 and $10,000, and a base tax of $600 plus 7% on amounts over that.
- Pay the minimum fee of $250 every year on top of having to pay the business entity income tax if you have an LLC with S-corp status or filing as partnerships.
It is important to note that the cost of filing taxes in Vermont varies depending on the type of business and the amount of income earned. Businesses should consult with a tax professional or the Vermont Department of Taxes for more information on specific fees and requirements.