What is the CT Business Entity Tax?
August 13, 2020
Once Upon a Time in Connecticut
The CT business entity was a tax that was required of LLCs which operated in the state of Connecticut. At one point, the total sum of the CT business entity tax was $250, which should have been paid biannually. Thanks to a bill called the Public Act 19-117 which was signed by the governor of Connecticut in 2019, that fee is no longer existent and LLCs based in Connecticut no longer have to pay it.
What Was the Tax Anyway?
When it was still around, the due date of this business entity tax (or BET) used to depend on when the business entity’s taxable year ended. The last time the BET was paid was April 12, 2019. Doesn’t seem that long ago! In the state of Connecticut, the LLCs had two main options for paying business entity tax:
- Through mail
- Through a Tax Service Center, which allowed them to pay taxes online
What Now, When There’s Not BET?
You can definitely bet (get it?) good money that the Connecticut business entity tax is not the only tax in CT!
There’s also the Sales and Use tax there, just like in most states, which you pay if you sell any products or services in this state. Keep in mind that as a business owner, you are required to collect and report sales taxes and failing to do so will be very problematic for your business. If you’re a bit lucky, you’ll just get a $500 fine. That’s lucky, because the alternative is imprisonment or both!
In fact, if you plan on running a reseller business in Connecticut, you need to get a Sales Tax Permit, also known as a resale number. Basically, you need to get that state tax ID number if:
- You sell or rent products
- You sell any service which is taxable
- You’re in charge of any type of lodging, like a hotel, or a motel
Luckily, there’s a way to circumvent heavy state fines in Connecticut, and other states. And this is through sales tax exemption, which is what we are good at in Prestige Auditors, among other things!
Withholding Taxes in Connecticut
Let’s say you’re running a business in Connecticut and you have a bunch of people working for you. Doing so means that you are required by law to withhold your Connecticut Income Tax. The first step in doing so would be through the Department of Revenue in Connecticut. After that, the rest of the process is either done through mail or online via TSC, just like a state tax ID.
Unfortunately, sales and use tax is not the only tax in Connecticut, or anywhere else for the matter. So, you should always be on guard about different taxes which you might run across during your business operation.
The following taxes may apply to your business in Connecticut:
- Corporation Business tax
- Property Tax
- Minimum Tax
- Estimated corporation business tax
- Net income tax
- Franchise Tax
- Motor vehicle fuels tax
- Controlling interest transfer tax
There’s a ton of information which we can provide you with concerning businesses in Connecticut. If you need to set up a business entity in this state, our professionals from the Prestige Auditors team are always ready to assist you with all your businesses inquiries in order for you to create a successful business in The Land of Steady Habits!