For years, Connecticut LLCs owed a separate biennial Business Entity Tax on top of everything else; that got repealed in 2020. What's left now is a fairly middle-of-the-road state to form and run a business in, cost-wise. This covers the 2026 process.
1. Which business structure fits you?
Before any filing happens, it's worth being clear on what each business structure actually offers.
- Sole proprietorship. Requires no filing to start, since you and the business are treated as one legal entity, though that also means the business's debts are your debts.
- Partnership. Carries the same personal liability as a sole proprietorship, just distributed among two or more owners.
- LLC. The structure most small Connecticut businesses land on, since it puts your personal assets out of reach of the business's debts and lawsuits.
- Corporation, S-corp or C-corp. Involves more paperwork and formal upkeep, typically justified once investors or multiple shareholders are part of the picture.
Our guide on choosing a business structure compares these in more depth.
The Connecticut Secretary of the State is the office that handles LLC and corporation filings statewide. Sole proprietorships and general partnerships aren't required to register there.
2. Register your business
Forming an LLC
Filing a Certificate of Organization through the business.ct.gov portal, with the Secretary of the State, is how you form an LLC in Connecticut. It costs $120, and online filings typically process in 2 to 3 business days.
Every LLC needs a registered agent at a physical Connecticut address who's available during business hours, whether that's you personally or a paid service.
Connecticut law doesn't require you to put an operating agreement in writing, but it's still a good idea to have one, particularly with multiple members, so decisions and profit splits are settled ahead of time rather than argued about later.
Sole proprietorships and DBAs
Sole proprietorships have no filing obligation with the Secretary of the State. Trading under a name other than your own means registering it with the town clerk in whatever town the business operates from.
3. Get an EIN
An Employer Identification Number is free from the IRS and the online application usually takes about 15 minutes. Opening a business bank account, hiring anyone, or filing most business tax forms all require one, even for a single-member LLC with no staff.
4. Check licenses and permits
Connecticut has no single statewide business license either. What you need is a function of industry and town: professional licensing for regulated fields, local permits in some municipalities, and a Sales and Use Tax Permit from the Department of Revenue Services if you're selling taxable goods or services. Our guides on professional licensing by industry and zoning laws for home businesses cover more of this.
5. Understand Connecticut taxes
Personal income tax in Connecticut is progressive, running from 3% up to 6.99% across seven brackets. Pass-through LLCs don't owe a separate entity-level tax; the old Business Entity Tax that used to apply was repealed effective 2020. Electing corporate treatment instead brings a 7.5% corporate income tax rate, with an additional 10% surtax for very large filers.
Sales tax is a flat 6.35% across the state, with no local add-ons authorized anywhere, so the rate doesn't shift by location. Certain luxury goods carry a higher 7.75% rate.
6. Stay compliant
An Annual Report is due every year with the Secretary of the State, filed electronically, between January 1 and March 31, starting the year after formation. It costs $80. A $50 late fee applies if you miss the window, and continuing not to file can eventually lead to administrative dissolution, which then takes a $50 reinstatement fee plus every overdue report to fix.
Connecticut business costs at a glance
| Item | Cost |
|---|---|
| Certificate of Organization (LLC) | $120 |
| Annual Report (every year, due Jan 1 to Mar 31) | $80 |
| Late filing fee | $50 |
| Registered agent service (optional) | $50 to $125/year |
| EIN | Free (IRS) |
| State income tax | 3% to 6.99% (progressive) |
| State sales tax | 6.35% flat, no local add-on |
Frequently asked questions
Does Connecticut still charge a separate Business Entity Tax?
No, that biennial tax was repealed effective 2020; LLCs owe no separate entity-level tax beyond the annual report.
How much does it cost to form an LLC in Connecticut?
$120 for a Certificate of Organization, with online processing typically taking 2 to 3 business days.
What's the personal income tax rate in Connecticut?
Progressive, from 3% up to 6.99% across seven brackets.
Does sales tax vary by city in Connecticut?
No, it's a flat 6.35% statewide with no local add-ons authorized, though a higher 7.75% rate applies to certain luxury goods.
When is Connecticut's Annual Report due?
Between January 1 and March 31 each year, starting the year after formation, for $80.
Fees and rates above come from the Connecticut Secretary of the State and Department of Revenue Services as of 2026, and they do change over time, so double check before you file. None of this is legal or tax advice. Talk to a Connecticut-licensed attorney or CPA about your specific situation.