Connecticut used to charge LLCs a separate biennial Business Entity Tax on top of everything else, but that was repealed back in 2020. What's left is a fairly ordinary mid-cost state to form and maintain a business in. Here's what it takes to start a business in Connecticut in 2026.
1. Which business structure fits you?
Before you file anything, it helps to know what you're actually choosing between.
- Sole proprietorship. No filing required to start, and you and the business are legally the same entity. Simple, but you're personally liable for whatever the business owes.
- Partnership. Two or more people running a business together, with the same liability exposure as a sole proprietorship, just split across partners.
- LLC. The most common structure for small businesses in Connecticut. It separates your personal assets from the business's debts and lawsuits.
- Corporation, either S-corp or C-corp. More paperwork and more formality, usually worth it once you're bringing on investors or multiple shareholders.
For a deeper comparison, see our guide on choosing a business structure.
LLCs and corporations register with the Connecticut Secretary of the State, the agency that handles business filings statewide. Sole proprietorships and general partnerships don't register there.
2. Register your business
Forming an LLC
You form an LLC in Connecticut by filing a Certificate of Organization with the Secretary of the State through the business.ct.gov portal. The filing fee is $120, and online processing typically takes 2 to 3 business days.
Every LLC needs a registered agent with a physical Connecticut address, available during business hours. You can act as your own agent, or hire a commercial service.
Connecticut doesn't require an operating agreement by law, but it's still worth writing one, particularly for multi-member LLCs, to spell out how decisions and profits get split.
Sole proprietorships and DBAs
Sole proprietorships don't file with the Secretary of the State. If you're operating under a trade name, you'll register it with the town clerk in the town where your business is located.
3. Get an EIN
An Employer Identification Number is free straight from the IRS and takes about 15 minutes online. You'll need one to open a business bank account, hire anyone, or file most business tax forms, even if you're a single-member LLC with no employees.
4. Check licenses and permits
Connecticut doesn't issue a single general statewide business license either. What you need depends on your 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 sell 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
Connecticut has a progressive personal income tax, from 3% up to 6.99% across seven brackets. Pass-through LLCs owe no separate entity-level tax; the old Business Entity Tax that used to apply to LLCs was repealed effective 2020. If your LLC elects corporate treatment, the corporate income tax rate is 7.5%, with an additional 10% surtax on very large filers.
Sales tax is a flat 6.35% statewide, and Connecticut doesn't authorize any local add-ons, so the rate is the same everywhere. A higher 7.75% rate applies to certain luxury goods.
6. Stay compliant
Every Connecticut LLC files an Annual Report with the Secretary of the State, due between January 1 and March 31 each year, starting the year after formation. The fee is $80, filed electronically. Miss it and you'll owe a $50 late fee; continued non-filing can lead to administrative dissolution, with a $50 reinstatement fee plus all overdue reports to fix it.
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.