Vermont Contractor Compliance Checklist

Setting up a contracting business in Vermont means filing with four or five different agencies in a specific order. Miss a step or do them out of sequence and you'll hit roadblocks — OPR won't accept your registration without insurance on file, and OPR registration does not replace the local permits you may need.

Here's the full compliance checklist, ordered the way the agencies actually process things.

Step 1: Form Your Business Entity

File with the Secretary of State's Corporations Division before anything else. Your options:

• LLC (Articles of Organization): $125 filing fee. Provides personal liability protection — your house and personal accounts stay separate from business debts.
• DBA (Assumed Business Name): $50 filing fee. For sole proprietors operating under a trade name. No liability shield.
• Corporation: $125 filing fee. Less common for small contractors, but required if you're taking on investors or issuing stock.

OPR enforces strict name-congruency rules: you can only market services, sign contracts, and pull permits under the exact name filed with the Corporations Division. Using an unregistered trade name on a client contract counts as unauthorized practice.

Step 2: Get Your Federal EIN

Apply for a free Employer Identification Number through the IRS website. Takes five minutes. You'll need it for opening a business bank account, filing Vermont tax returns, and hiring employees.

Sole proprietors using their SSN can technically skip this, but a separate EIN is standard practice for any contracting business.

Step 3: Register Tax Accounts on myVTax

Set up your Vermont Business Tax Account through the myVTax portal. This covers:

• Sales and use tax: Vermont charges 6% on building materials. As a contractor, you're the "end consumer" — you pay tax at the supplier, not your client. If you buy materials from out-of-state (New Hampshire suppliers are popular), you owe use tax on those purchases.
• Payroll withholding: Required once you hire your first employee.
• Unemployment insurance tax: Set up the applicable Department of Labor account when you hire employees.

Keep your account number — you'll use it for the applicable tax filings.

Step 4: Secure Insurance

Two policies to arrange:

General liability (mandatory for OPR):

• Minimum: $1,000,000 per occurrence / $2,000,000 aggregate
• Get your Certificate of Insurance (COI) — you'll upload it during OPR registration

Workers' compensation (mandatory if hiring):

• Required for any employer with one or more employees
• Sole proprietors with no employees are exempt but can buy voluntary coverage
• Corporate officers and LLC members are automatically counted as employees unless they formally apply for and receive written permission for exclusion from the Department of Labor

Don't wait to shop insurance until after you've started marketing. OPR won't process your registration without the COI.

Step 5: Register with OPR

File your Residential Contractor Registration through the Office of Professional Regulation's online portal. Required for any contractor entering direct residential contracts of $10,000 or more (labor and materials combined).

• Individual registration (no employees): $75 biennial fee
• Business registration (one or more employees): $250 biennial fee

You'll need to upload your COI, confirm your Secretary of State filing, and attest that you'll use written contracts meeting OPR standards on qualifying projects.

Step 6: Set Up Compliant Contracts

For any qualifying direct residential project of $10,000 or more, your OPR-compliant written contract must include:

• Detailed scope of work and primary materials
• Estimated start and completion dates
• One of three pricing structures: firm maximum price, capped time-and-materials, or uncapped time-and-materials with a disclosure that no maximum exists
• Change-order procedures requiring signed written amendments

For qualifying direct residential projects of $10,000 or more, 26 V.S.A. § 5501 sets the written-contract requirements. For home-solicitation sales, include a detachable Notice of Cancellation under 9 V.S.A. § 2454, giving the homeowner a three-day right to cancel.

Missing a required provision makes the contract noncompliant. In particular, include the cancellation notice before accepting a deposit or starting work.

Step 7: Check Local Permit Requirements

State registration doesn't grant you permit authority. Before bidding any project, contact the town's zoning administrator and building department to verify:

• Local building permit requirements and fees
• Zoning setback and density rules
• Whether the town requires a performance bond
• Any trade-specific permits (electrical, plumbing, mechanical)

Requirements vary dramatically — Burlington charges $8.50 per $1,000 of construction cost; smaller towns may have flat fees or no building department at all.

Step 8: Specialty Trade Credentials (If Applicable)

If your work includes electrical, plumbing, or HVAC installations, you or your subcontractors need state trade licenses from the Division of Fire Safety. OPR registration alone doesn't authorize trade work.

For covered renovations on pre-1978 target housing or child-occupied facilities — when painted surfaces are disturbed beyond the applicable thresholds — you'll also need Lead-Safe RRPM Firm and Supervisor licenses from the Vermont Department of Health.

The Printable Version

The Vermont General Contractor License Guide includes a printable compliance checklist that tracks every item above, plus the specific forms, portal URLs, and municipal contacts for Vermont's major towns.

See more Vermont guides →