Business Overview
Connecticut has a strong presence in finance, insurance, manufacturing, and defense industries. The state offers proximity to major Northeast markets, a skilled workforce, and excellent infrastructure. Its ecosystem supports innovation, particularly in advanced manufacturing, healthcare, and financial services.
Key Facts & Figures
| Category | Details |
| Capital | Hartford |
| Major Cities | Bridgeport, New Haven, Stamford, Hartford, Waterbury |
| State Sales Tax Rate | 6.35% |
| Local Sales Tax Rate | No local sales tax |
| Corporate Income Tax | 4.55% flat rate |
| Physical Nexus Threshold | Physical presence through employees, offices, or independent agents |
| Economic Nexus Threshold | $100,000 in annual sales and 200 transactions |
Did you know?
Connecticut is a global leader in insurance, with Hartford nicknamed the ‘Insurance Capital of the World,’ hosting headquarters for major insurance companies like Travelers and The Hartford.
Setup & Compliance
Connecticut business formation involves several state agencies with specific registration requirements.
Business Setup Process in Connecticut:
- Choose Your Business Structure: Consider tax implications and liability protection needs.
- Register Your Business: File formation documents with the Connecticut Secretary of State.
- Register with Tax Authorities: Register with the Department of Revenue Services for relevant tax permits.
- Obtain Business Licenses: Research and secure necessary state and local business licenses.
- Register as an Employer: Register with the Department of Labor if hiring employees.
Ongoing Compliance Requirements:
- Annual Reports: Most business entities must file annual reports with the Secretary of State.
- Business Entity Tax: Connecticut imposes a $250 annual business entity tax on LLCs, LLPs, and S-Corps.
- Sales and Use Tax: Businesses must collect 6.35% state sales tax on taxable transactions.
- Paid Family and Medical Leave: Connecticut employers must participate in the state’s PFML program.
- Industry Regulations: Certain industries have specialized licensing and regulatory requirements.
Hiring & Payroll
Connecticut has comprehensive employment laws that often exceed federal requirements.
Connecticut Payroll Taxes:
- Unemployment Insurance: Rates from 1.9% to 6.8% on first $15,000 of wages.
- Paid Family and Medical Leave: 0.5% employee contribution.
- State Income Tax Withholding: Required based on CT-W4 form.
Connecticut Labor Laws:
- Minimum Wage: $14.00 per hour (increasing to $15.00 on June 1, 2023).
- Paid Sick Leave: Employers with 50+ employees must provide 1 hour for every 40 worked, up to 40 hours annually.
- Paid Family and Medical Leave: Up to 12 weeks of paid leave.
- Sexual Harassment Prevention Training: Required for all employees.
- Final Paychecks: Due on next regular payday after termination.
State Incentives
Connecticut offers comprehensive economic incentives to support business development.
Key Business Incentives:
- Manufacturing Reinvestment Account: Financial support for manufacturing businesses.
- Angel Investor Tax Credit: Encourages investment in early-stage businesses.
- Research and Development Tax Credit: Supports innovative company development.
Small Business & Startup Support:
- Connecticut Small Business Development Center: Comprehensive business advisory services.
- First Five Program: Significant incentives for large job-creating businesses.
- Next Gen Cybersecurity Incentives: Support for technology and cybersecurity companies.
Regulatory Considerations
Connecticut provides a structured regulatory environment with emphasis on business integrity.
Key Business Regulations:
- Data Privacy: Comprehensive laws protecting consumer and business data.
- Environmental Compliance: Strict regulations for manufacturing and industrial operations.
- Professional Licensing: Mandatory licensing for various professional services.
Additional Regulatory Areas:
- Financial Services Regulation: Strict oversight of financial and insurance businesses.
- Small Business Support: Regulatory guidance for emerging enterprises.
Business Overview
Connecticut has a strong presence in finance, insurance, manufacturing, and defense industries. The state offers proximity to major Northeast markets, a skilled workforce, and excellent infrastructure. Its ecosystem supports innovation, particularly in advanced manufacturing, healthcare, and financial services.
Key Facts & Figures
| Category | Details |
| Capital | Hartford |
| Major Cities | Bridgeport, New Haven, Stamford, Hartford, Waterbury |
| State Sales Tax Rate | 6.35% |
| Local Sales Tax Rate | No local sales tax |
| Corporate Income Tax | 4.55% flat rate |
| Physical Nexus Threshold | Physical presence through employees, offices, or independent agents |
| Economic Nexus Threshold | $100,000 in annual sales and 200 transactions |
Did you know?
Connecticut is a global leader in insurance, with Hartford nicknamed the ‘Insurance Capital of the World,’ hosting headquarters for major insurance companies like Travelers and The Hartford.
Setup & Compliance
Connecticut business formation involves several state agencies with specific registration requirements.
Business Setup Process in Connecticut:
- Choose Your Business Structure: Consider tax implications and liability protection needs.
- Register Your Business: File formation documents with the Connecticut Secretary of State.
- Register with Tax Authorities: Register with the Department of Revenue Services for relevant tax permits.
- Obtain Business Licenses: Research and secure necessary state and local business licenses.
- Register as an Employer: Register with the Department of Labor if hiring employees.
Ongoing Compliance Requirements:
- Annual Reports: Most business entities must file annual reports with the Secretary of State.
- Business Entity Tax: Connecticut imposes a $250 annual business entity tax on LLCs, LLPs, and S-Corps.
- Sales and Use Tax: Businesses must collect 6.35% state sales tax on taxable transactions.
- Paid Family and Medical Leave: Connecticut employers must participate in the state’s PFML program.
- Industry Regulations: Certain industries have specialized licensing and regulatory requirements.
Hiring & Payroll
Connecticut has comprehensive employment laws that often exceed federal requirements.
Connecticut Payroll Taxes:
- Unemployment Insurance: Rates from 1.9% to 6.8% on first $15,000 of wages.
- Paid Family and Medical Leave: 0.5% employee contribution.
- State Income Tax Withholding: Required based on CT-W4 form.
Connecticut Labor Laws:
- Minimum Wage: $14.00 per hour (increasing to $15.00 on June 1, 2023).
- Paid Sick Leave: Employers with 50+ employees must provide 1 hour for every 40 worked, up to 40 hours annually.
- Paid Family and Medical Leave: Up to 12 weeks of paid leave.
- Sexual Harassment Prevention Training: Required for all employees.
- Final Paychecks: Due on next regular payday after termination.
State Incentives
Connecticut offers comprehensive economic incentives to support business development.
Key Business Incentives:
- Manufacturing Reinvestment Account: Financial support for manufacturing businesses.
- Angel Investor Tax Credit: Encourages investment in early-stage businesses.
- Research and Development Tax Credit: Supports innovative company development.
Small Business & Startup Support:
- Connecticut Small Business Development Center: Comprehensive business advisory services.
- First Five Program: Significant incentives for large job-creating businesses.
- Next Gen Cybersecurity Incentives: Support for technology and cybersecurity companies.
Regulatory Considerations
Connecticut provides a structured regulatory environment with emphasis on business integrity.
Key Business Regulations:
- Data Privacy: Comprehensive laws protecting consumer and business data.
- Environmental Compliance: Strict regulations for manufacturing and industrial operations.
- Professional Licensing: Mandatory licensing for various professional services.
Additional Regulatory Areas:
- Financial Services Regulation: Strict oversight of financial and insurance businesses.
- Small Business Support: Regulatory guidance for emerging enterprises.
