CT
Connecticut Small Business Tax Guide
Sales tax permits, rates and returns, plus the 2025 corporation business tax, in the words of Connecticut's Department of Revenue Services (DRS), each with its edition date. General information, not tax advice.
Disclaimer: This page is educational content only. Tax laws change, and your situation may differ. It is not legal, tax, or financial advice. Consult a qualified professional licensed in Connecticut before making filing or planning decisions.
Tax landscape for small businesses
Connecticut's Department of Revenue Services (DRS) runs the state's sales and use tax and its corporation business tax. Each Connecticut statement below is a direct quote from a DRS flyer, form or form instructions, labeled with the edition it comes from. Those editions run from 2021 to 2025, so check DRS for anything that has changed since. Federal tax isn't covered.
DRS's sales and use tax permit flyer (Connecticut DRS flyer DRS-143, August 2023 edition, as retrieved on October 31, 2026) says: "The sales tax rate of 6.35% applies to the retail sale, lease, or rental of most goods, and taxable services. However, other sales tax rates may apply to certain sales." DRS Form O-88 (Connecticut DRS Form O-88, revised July 2021, as retrieved on October 31, 2026) adds: "The use tax rates are identical to the sales tax rates."
Worked example (sample figures): a Connecticut print shop invoices a customer $1,200.00 for banners plus $80.00 to ship them. The flyer says "Sales and use taxes are computed on the selling price of the goods or services." and that the selling price includes "the charges for shipping the goods to the purchaser", so the taxable amount is $1,200.00 + $80.00 = $1,280.00. If the 6.35% rate (Connecticut DRS flyer DRS-143, August 2023 edition, as retrieved on October 31, 2026) applies to the sale, the tax is $1,280.00 × 6.35% = $81.28, and the invoice total is $1,361.28.
Tax overview
Each row lists a tax area and its notes. Confirm current figures with your state's tax agency or the IRS.
| Tax type | Rate or basis | Notes |
|---|---|---|
| Sales tax (DRS) | "6.35%" | DRS-143 flyer, August 2023 edition (as retrieved on October 31, 2026): applies to "most goods, and taxable services", and "other sales tax rates may apply to certain sales." |
| Use tax (DRS) | Same as the sales tax rates | Form O-88, revised July 2021 (as retrieved on October 31, 2026): "The use tax rates are identical to the sales tax rates." |
| Corporation business tax, 2025 return (DRS) | "7.5% (.075)" | 2025 Form CT-1120, Schedule A: "Tax: Multiply Line 5 by 7.5% (.075)." Labeled 2025; not stated here as a 2026 rate. |
| Minimum tax on capital, 2025 return (DRS) | "$250" to "$1 million" | 2025 Form CT-1120 instructions, revised December 2025: "The minimum tax on capital cannot be less than $250 or exceed $1 million." |
Filing requirements
This list isn't a complete checklist for your business.
Get a permit before your first sale
The DRS-143 flyer (Connecticut DRS flyer DRS-143, August 2023 edition, as retrieved on October 31, 2026) says: "You must obtain a Sales and Use Tax Permit from DRS if you intend to engage in any of the following activities in Connecticut:" "Sale, rental, or lease of goods;" "Sale of a taxable service; or" "Operating a hotel, motel, lodging house, or bed and breakfast establishment." It also says: "You must obtain a Sales and Use Tax Permit before making any sales."
Every seller, every location
The same flyer says: "The requirement to obtain a Sales and Use Tax Permit applies to all businesses that will make sales in this state, regardless of the number of sales made or the amount of tax collected." It adds: "If you will have more than one location, you must obtain and display a Sales and Use Tax Permit for each location."
Permit fee and renewal
The flyer (Connecticut DRS flyer DRS-143, August 2023 edition, as retrieved on October 31, 2026) says "there is a $100 fee to obtain a Sales and Use Tax Permit. The permit expires every two years." Confirm the current fee with DRS before you apply.
Filing frequency
Form O-88 (Connecticut DRS Form O-88, revised July 2021, as retrieved on October 31, 2026) says: "Both taxable and nontaxable sales must be reported in accordance with your monthly, quarterly, or annual filing frequency assigned by the Department of Revenue Services (DRS)." It also says: "Quarterly and monthly filers must file this return and make payment electronically using myconneCT at portal.ct.gov/DRS-myconneCT."
Due date and zero returns
Form O-88 (Connecticut DRS Form O-88, revised July 2021, as retrieved on October 31, 2026) says: "Form OS-114 is due on or before the last day of the month following the end of the filing period." It adds: "Businesses must complete and file Form OS-114, Connecticut Sales and Use Tax Return, to report all sales activity in Connecticut, even if no sales were made or no tax is due."
Deductions and write-offs
Confirm with your state how it treats each item.
- Corporation business tax works from the corporation's return: the 2025 Form CT-1120 (Connecticut DRS 2025 Form CT-1120, as retrieved on October 31, 2026) computes Schedule A tax with "Tax: Multiply Line 5 by 7.5% (.075)." The 2025 instructions (Connecticut DRS 2025 Form CT-1120 instructions, revised December 2025, as retrieved on October 31, 2026) say: "The minimum tax on capital cannot be less than $250 or exceed $1 million."
- For Connecticut exemptions, credits and any other rate that may apply to your sales, ask DRS or a tax professional.
Practical tips
- Put shipping and handling in the taxable total. The DRS-143 flyer (Connecticut DRS flyer DRS-143, August 2023 edition, as retrieved on October 31, 2026) says: "The selling price includes expenses related to the sale, such as the charges for shipping the goods to the purchaser (for example, charges for U.S. postage), handling charges, charges for labor, and charges for any other services that are part of the sale, whether or not separately stated on the invoice."
- Collect from the first sale. The same flyer says: "If you sell goods or taxable services in Connecticut, the law requires you to charge and collect Connecticut sales tax."
- Handle resale and exempt sales with certificates. The DRS-143 flyer (Connecticut DRS flyer DRS-143, August 2023 edition, as retrieved on October 31, 2026) says: "If you purchase goods or services and intend to resell them or physically incorporate them in to another product or service you sell, you must issue a resale certificate to the seller or you must pay sales tax to the seller." For your own exempt customers it says: "The customer must give you a completed State of Connecticut Exemption Certificate. There are several types of exemption certificates."
- Check the rate for each kind of sale. The flyer's rate answer ends: "However, other sales tax rates may apply to certain sales."
- Billed's invoice software page says: "Save your tax rates and settings once, and Billed calculates taxes automatically when you create invoices and estimates."
- Billed's expense tracking page says: "An expense in Billed records who you paid, when, how much and which category it belongs to, with the receipt attached to the same entry."
Frequently asked questions
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At a glance
| Topic | Connecticut DRS source | Edition |
|---|---|---|
| Permit, 6.35% rate, selling price | Flyer DRS-143 | August 2023 |
| Use tax rates, filing frequency, OS-114 due date | Form O-88 (OS-114 instructions) | Revised July 2021 |
| Corporation business tax rate | Form CT-1120 | 2025 |
| Minimum tax on capital | Form CT-1120 instructions | Revised December 2025 |
When this isn't for you
Personal income tax, payroll withholding, the other sales tax rates that may apply to certain sales, and federal taxes aren't covered on this page. Bring those, and anything about your own returns, to Connecticut DRS or a tax professional.