Connecticut Tax Reforms
LLCs in Connecticut used to pay a $250 Business Entity Tax every 2 years. In June 2019, Connecticut abolished this tax.
To obtain a Connecticut Sales Tax Permit, apply online or visit a local DRS office.
In June 2023, CT passed a law affecting Pass-Through Entity Tax, effective 2024. Highlights: The tax becomes optional and annual. Returns are due the 15th day of the 3rd month after year end. Electing entities must use the alternative base to calculate income.
Federal and State Tax Obligations for LLCs
LLCs don’t pay income taxes themselves. LLC income passes through to members, who pay tax. Members also pay self-employment taxes on LLC earnings.
LLCs are treated as pass-through entities, and all revenue passes through to the members who pay their income tax. In Connecticut, LLC owners can also select taxing like a C or S Corporation. State Taxes for Connecticut LLCs.
- Single-Member LLCs
A single-member LLC has one owner or LLC member and is taxed as a sole proprietorship. The Connecticut state income tax rate for an LLC ranges between 3% to 6.99%.
By default, LLCs do not pay federal income taxes, only members do. Connecticut law requires LLCs to complete annual report filings to update business information.
Sales Tax and Business Entity Tax
6.35% is the state sales tax rate for purchasing goods in Connecticut. If your business sells taxable goods or services, you must register with the Department of Revenue Services and acquire a Sales Tax Permit.
What is the business tax in CT?
The CT business entity tax is a tax required of all limited liability companies that operate in the state of Connecticut. The business entity tax costs $250 and is due every two years. LLC members are responsible for paying the entire 15.3% (12.4% for Social Security and 2.9% for Medicare).
Forming an LLC in Connecticut
Can I be my own registered agent in Connecticut? In order to form an LLC in Connecticut, you must submit a Certificate of Organization to the Connecticut Secretary of State, charging $120. You can submit your application online, by mail, or in person.
An entity that is incorporated in the UAE will automatically be considered a ‘Resident’ Person for the purposes of UAE Corporate Tax.
Sole Proprietorships and Single-Member LLCs: Since these business types are considered “pass-through” entities, the income generated by the business will be taxed at the individual owner’s personal income tax rate.