Connecticut lesson 5 of 6
Connecticut LLC taxes, licences and permits
Connecticut has no franchise tax on standard LLCs. Members of a pass-through LLC pay Connecticut's graduated personal income tax on their share of profit, and businesses that sell taxable goods need a Sales and Use Tax permit.
How members are taxed
A pass-through Connecticut LLC does not pay entity-level state income tax. Members who are Connecticut residents pay the state's graduated personal income tax, with rates running from 2% up to 6.99%, on their share of profit. An LLC that elects C corporation tax treatment instead owes Connecticut's 7.5% corporate income tax plus the surcharge that currently applies to larger corporations. Check the Department of Revenue Services' current-year tables before filing, since bracket thresholds are set by statute and can change.
Sales tax and local licensing
If you sell taxable goods or certain services, register for a Sales and Use Tax permit with DRS before you start selling; the state sales tax rate is set by statute and applies uniformly, since Connecticut does not layer on additional local sales taxes the way some states do. Connecticut has no single statewide general business licence; requirements depend on your industry regulator and, for some activities, your town.
Insurance, financial services, and other regulated Connecticut industries often carry their own state licensing on top of general DRS tax registration. Confirm requirements with the relevant state agency for your industry.
Key takeaways
- Members of a pass-through LLC pay Connecticut's graduated personal income tax, from 2% up to 6.99%, on their share of profit.
- There is no LLC franchise tax; a C-Corp election instead pays the 7.5% corporate income tax plus any applicable surcharge.
- Connecticut does not add local sales tax on top of the state rate, unlike many other states.
Frequently asked questions
Does Connecticut have a franchise tax on LLCs?
No, a standard pass-through Connecticut LLC does not pay a franchise tax. Only a C-Corp election pays Connecticut's corporate income tax.
Is there a statewide business licence in Connecticut?
No. Check with your town and with any state agency that regulates your specific industry, such as insurance or financial services.
Official sources
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Last reviewed: September 2026 - reviewed by Gullia Filing Legal & Formation Team