Connecticut LLC Taxes

Note: Our tax lesson is not as step-by-step as our other Connecticut LLC formation lessons, due to the uniqueness and variation among businesses. Taxes are usually not as straightforward as forming an LLC, and therefore, the information below is an overview, and not a comprehensive guide.

You will likely need to consult with a local tax professional to make sure you meet all your Connecticut tax obligations. We recommend using Thumbtack.

Connecticut Department of Revenue State Tax ID Number

Because you are operating a business in Connecticut, you will need to register with the Department of Revenue and get a Connecticut State Tax Identification Number.

You can register with the Department of Revenue using Form REG-1 online through the Taxpayer Service Center.

You can contact the Department of Revenue with any questions at 860-297-5962, or visit their contact page for additional information.

Connecticut Business Entity Tax (no longer exists)

LLCs doing business in Connecticut used to have to pay a Business Entity Tax (BET). The tax was $250 and was due every 2 years.

However, because the Governor signed Public Act 19-117, the Business Entity Tax (BET) no longer exists.

Any Connecticut LLCs (and out-of-state LLCs doing business in Connecticut) don’t have to pay a Business Entity Tax (BET) anymore.

Connecticut Sales and Use Tax

Sales and use taxes are due if you sell goods or taxable services in Connecticut.

You also need to obtain a Sales Tax Permit before you begin selling your goods or services.

You are responsible for collecting and paying sales and use taxes whether or not you collect them from your customers. If you do not obtain a Sales Tax Permit, the state will fine you up to $500 and you could possibly face imprisonment.

You can find full information on Sales and Use Tax here.

Connecticut Withholding Tax (if you have employees)

As mentioned here, if you’re doing business in CT and considered an employer, you must withhold Connecticut Income Tax.

You must first register for withholding tax through the CT Department of Revenue.

Then, you can file your return by mail or you can file online through the Taxpayer Service Center (TCS).

Additionally, you’ll need to register with the Connecticut Department of Labor for unemployment and workers compensation taxes.

You can find more information on Withholding Tax here.

What other taxes/forms are due?

Depending on your industry, where your business is located, how you are taxed by the IRS, and whether or not you have employees, will determine which additional taxes and forms are due.

Some examples of other taxes and forms due are:

• Form CT-1040
• Form CT-1065
• Form CT-1065 & CT-1120SI (for LLC taxed as S-Corp)
• Corporation Business Tax (for LLC taxed as C-Corp)
• Net Income Tax
• The Minimum Tax
• Surtax
• Estimated Corporation Business Tax
• Controlling Interest Transfer Tax
• Motor Vehicle Fuels Tax
• Franchise Tax
• Property Tax
• And potentially more

For a full list of taxes in Connecticut, please reference this guide:
Connecticut Department of Revenue: Publication 2018(5) Getting Started in Business

Our Recommendation

Calculating your tax obligations in Connecticut can be complicated and if done improperly can negatively impact your LLC.

We recommend that you get help from a tax professional once your LLC is formed. You can use Thumbtack or Yelp.

Hiring a tax professional will not only help you keep your Connecticut LLC in compliance, but it will also give you an advisor to go to for other business questions.

You’ll want someone who’s a good fit for your company, makes you feel comfortable, and is willing to answer all of your questions. It should be someone you like personally as well as professionally. We recommend talking with at least 2-3 people before making your final decision.

Matt Horwitz

Founder & Educator, LLC University®

Matt Horwitz has been the leading expert on LLC education for the past decade. He founded LLC University in 2010 after realizing people needed simple and actionable instructions to start an LLC that other companies weren't offering. He's cited by Entrepreneur Magazine, Yahoo Finance, and the US Chamber of Commerce, and was featured by CNBC and InventRight.
 
Matt holds a Bachelor's Degree in business from Drexel University with a concentration in business law. He performs extensive research and analysis to convert state laws into simple instructions anyone can follow to form their LLC - all for free! Read more about Matt Horwitz and LLC University.