Vermont · LLC tax election
Vermont LLC: S corp or C corp?
Vermont attaches a fixed fee to being a pass-through, and it makes C corp minimums depend on revenue, not profit.
See Vermont at a glanceShort answer
Vermont charges every pass-through entity, including an LLC taxed as an S corp, a flat $250 annual entity tax. A C corp pays 6%, 7% and 8.5% in brackets, with a minimum tax between $100 and $100,000 by gross receipts. For a small Vermont LLC the S election costs $250 a year at the state level.
Last checked .Vermont at a glance
| Question | Vermont |
|---|---|
| S election recognized? | Yes, Vermont follows the federal election1 |
| Separate state form and deadline | No separate state form2 |
| Tax the S corp itself pays | minimum $2503 |
| C corp rate and minimum | 6% to 8.5%, graduated, minimum $1004 |
| Entity tax on a default LLC | $250 a year5 |
| Personal income tax | Yes, on wages and pass-through income6 |
What is different about Vermont?
Vermont is one of the few states where the pass-through label itself costs money. The Department of Taxes says a pass-through entity is liable for a minimum annual entity tax of $250, and that covers S corporations and LLCs alike. Income itself is taxed only at the shareholder, partner or member level. The C corp side is a different animal. Brackets run from 6% to 8.5%, and the minimum tax is set by Vermont gross receipts, not by profit: $100 under $500K, rising to $100,000 over $300 million. A small Vermont LLC with thin margins can find the minimum matters more than the rate. Know both numbers before you pick.
Does Vermont recognize a federal S corp election?
Vermont taxes the income of an S corporation at the shareholder level, but the entity still pays. The S corporation or LLC taxed as one files the Business Income Tax Return (BI-471) and pays a minimum annual entity tax of $250 with it. If every owner is a Vermont resident and the entity owes only the $250, it can file the simpler BI-476. For nonresident shareholders the entity makes payments for the income attributable to Vermont.
Does my LLC need a separate Vermont election or form?
Vermont has no separate S election form; S corporations and LLCs taxed as pass-throughs file the Business Income Tax Return (BI-471), or BI-476 if all owners are Vermont residents.2
What does Vermont tax an S corp or LLC at the entity level?
- A Vermont S corporation owes a flat $250 minimum annual entity tax, due with the return, plus payments for nonresident shareholders.3
- A Vermont LLC taxed as a pass-through entity owes the $250 minimum annual entity tax.5
- The minimum tax for a Vermont C corp ranges from $100 under $500K of Vermont gross receipts to $100,000 over $300 million.7
- The entity must make payments for nonresident shareholders, partners or members for the income attributable to Vermont.8
Is a Vermont LLC taxed as a C corp ever better?
A Vermont C corp pays 6% on the first $10,000 of Vermont income, 7% on income from $10,001 to $25,000 and 8.5% on income above $25,000. A minimum tax applies to every active corporation, including LLCs electing C corp treatment, and it depends on Vermont gross receipts: $100 under $500K, $500 from $500K to $1 million, $2,000 from $1 million to $5 million, $6,000 from $5 million to $300 million and $100,000 above that.
Run your Vermont numbers
In Vermont the $250 entity tax applies whether you elect S status or stay an ordinary pass-through LLC, so it does not separate the two. Against a C corp, the S corp avoids the 8.5% top bracket and the gross-receipts minimum, which reaches $2,000 above $1 million of Vermont receipts. If profit is thin and receipts are high, the minimum alone can favor S status.
Result
How much would a Vermont LLC owner save as an S corp?
| Taxed as | At $80,000 profit | At $150,000 profit |
|---|---|---|
| Default LLC | $11,554self-employment tax $11,304 + Vermont LLC tax $250 | $21,444self-employment tax $21,194 + Vermont LLC tax $250 |
| S corp | $9,594payroll tax $7,344 + Vermont S corp tax $250 + $2,000 payroll and prep | $16,020payroll tax $13,770 + Vermont S corp tax $250 + $2,000 payroll and prep |
| C corp | $17,838payroll tax $7,344 + Vermont tax $2,245 + federal $6,249 + $2,000 payroll and prep | $32,024payroll tax $13,770 + Vermont tax $4,625 + federal $11,629 + $2,000 payroll and prep |
Assumes a 60% salary10 and a single filer. Income tax is left out. C corp dividends are taxed again. Vermont's $250 entity tax applies to the default LLC and the S corp alike.
When is the Form 2553 deadline for a Vermont LLC, and what if I miss it?
Late relief: federal steps, deadline guide.
What to do next
How to start one, or have us form it from $123.75.
Registered agent $74.25/yr, annual report.
LLC vs S corp guide, election deadline, Form 2553 filed for $165.
More on Vermont: How to start a Vermont LLC · How to start a Vermont corporation · Vermont LLC cost · Vermont annual report · Annual report late fees by state
File the S-Corp Election for your Vermont LLC
We file Form 2553 for a flat $165.
Get the S-Corp ElectionCommon questions
Does Vermont tax S corporations?
Vermont taxes S corporation income at the shareholder level, but the entity pays a minimum annual entity tax of $250 and files the Business Income Tax Return. It also makes payments for nonresident shareholders on Vermont income.
What is the Vermont corporate income tax rate?
6% on the first $10,000 of Vermont income, 7% from $10,001 to $25,000 and 8.5% above $25,000. A minimum tax from $100 to $100,000 also applies, based on Vermont gross receipts.
What is the Vermont minimum corporate tax?
It depends on Vermont gross receipts: $100 under $500K, $500 from $500K to $1 million, $2,000 from $1 million to $5 million, $6,000 from $5 million to $300 million, and $100,000 above $300 million.
Does an LLC taxed as an S corp pay Vermont's $250 tax?
Yes. The Department treats S corporations, partnerships and LLCs as pass-through entities subject to the Business Income Tax, and the pass-through entity is liable for the $250 minimum annual entity tax.
What is Vermont form BI-476?
BI-476 is the simplified return for entities whose owners are all Vermont resident individuals or trusts and that owe only the $250 minimum tax. Otherwise most entities file the BI-471.
Sources 11 links, checked Nov 6, 2026
- Vermont taxes S corporations as pass-through entities, with income taxed at the shareholder level. tax.vermont.gov, checked Nov 6, 2026
- Vermont has no separate S election form; S corporations and LLCs taxed as pass-throughs file the Business Income Tax Return (BI-471), or BI-476 if all owners are Vermont residents. tax.vermont.gov, checked Nov 6, 2026
- A Vermont S corporation owes a flat $250 minimum annual entity tax, due with the return, plus payments for nonresident shareholders. tax.vermont.gov, checked Nov 6, 2026
- A Vermont C corporation pays 6.00% on the first $10,000 of Vermont income, 7.00% on $10,001 to $25,000 and 8.50% above $25,000, subject to a minimum tax that runs from $100 to $100,000 by Vermont gross receipts. tax.vermont.gov, checked Nov 6, 2026
- A Vermont LLC taxed as a pass-through entity owes the $250 minimum annual entity tax. tax.vermont.gov, checked Nov 6, 2026
- Vermont taxes the income of pass-through businesses at the shareholder, partner or member level. tax.vermont.gov, checked Nov 6, 2026
- The minimum tax for a Vermont C corp ranges from $100 under $500K of Vermont gross receipts to $100,000 over $300 million. tax.vermont.gov, checked Nov 6, 2026
- The entity must make payments for nonresident shareholders, partners or members for the income attributable to Vermont. tax.vermont.gov, checked Nov 6, 2026
- IRS: Form 1120 instructions, C corp rate irs.gov, checked Nov 6, 2026
- IRS: S corp reasonable compensation irs.gov, checked Nov 6, 2026
- IRS: Form 2553 instructions irs.gov, checked Nov 6, 2026
Last verified Nov 6, 2026.
This page explains the rules; it is not tax advice. Run your numbers with a CPA or enrolled agent before you elect.
Last verified Nov 6, 2026.