Connecticut Business License

If you’re starting a business in Connecticut, you may need to obtain a business license from certain local, state, or federal authorities (depending on your business’s niche and location).

This Connecticut Business License article provides an overview of how to obtain a business license in the state, detailing the specific requirements and costs that are involved.

Let’s get started so you can get your business up and running in no time.

Do I Need a Business License in Connecticut

In Connecticut, businesses are required to obtain various licenses and permits at the local, state, and federal levels. Here’s a general breakdown:

Type of Business

Below, we’ve detailed common ways in which your business type can dictate the licenses you’ll be required to obtain, as well as specific examples of these:

• Sales and Use Tax Permit: If you will be selling at events such as flea markets, craft shows, trade shows, antique shows, and fairs, or if you’ll be involved in any activities that require you to collect sales tax in Connecticut, you will need to obtain a Sales and Use Tax Permit. This is issued by the Connecticut Department of Revenue Services (DRS)
• Professional Licenses: Connecticut requires certain professions to obtain a designated license. These include engineering, accounting, law, pharmacy, and medicine, among others. Most of these licenses are issued by the Connecticut Department of Consumer Protection — Occupational & Professional Licensing Division
• Environmental Permits: Depending on your industry, you may need an environmental permit in order to operate legally . The state issues most of these permits through the Connecticut Department of Energy and Environmental Protection (DEEP). Keep in mind that permits that relate to the National Pollutant Discharge Elimination System (NPDES) are a part of this process

However, this is not the only factor influencing the exact combination of licenses you’ll need — the location of your business within Connecticut plays an important role as well.

Location

In this section, we’ve provided a succinct overview of the potential licenses and permits that your business may need due to local, state, and federal requirements:

• Local: Depending on your city and/or county, you may need to obtain additional licensing. For example, Hartford has a food service license for businesses that prepare, sell, and serve food
• State: Even though there is no statewide license that’s applicable to all businesses, you may be required to obtain a seller’s permit or professional state license depending on your business’s activities and niche
• Federal: Federal agencies regulate certain industries by issuing the necessary licenses. A business involved in aircraft operations, transportation, alcohol and tobacco sales, fish and wildlife, or broadcasting, for example, will likely be required to obtain a federal business license

Since the exact permits and licenses your business will need are entirely unique to your situation, you’ll have to conduct thorough research into your own local, state, and federal regulations to smoothly launch your business.

Alternatively, many entrepreneurs opt to leverage the expertise of third-party services to handle this on their behalf.

How to Get a Business License in Connecticut

In order to get your business license(s) in Connecticut, you will need to complete the following steps:

• Form Your Business
• Obtain an Employer Identification Number (EIN)
• Apply for the Required Licenses and Permits

Let’s take a look at each step in more detail below.

Step 1: Form Your Business

Before setting out to obtain a business license in Connecticut, it’s pivotal that you first choose an appropriate structure for your business. Sole proprietorships, general partnerships, and corporations are all common choices, however it’s often seen as the most advantageous for small businesses in Connecticut to register as a Limited Liability Company (LLC). Here are a few reasons for why:

• Limited Liability: Members are protected from personal liability for business debts, safeguarding personal assets
• Tax Benefits: LLCs typically enjoy a pass-through tax treatment, avoiding the double taxation that corporations are subjected to
• Management Flexibility: LLCs allow for flexibility in management structure, either being member-managed or manager-managed based on the preferences outlined in the certificate of formation
• Ease of Formation: With the Connecticut Secretary of State providing forms that meet the minimum state law requirements and the option to file online, setting up an LLC is relatively straightforward

Many small business owners opt to avoid the tricky process of forming an LLC by instead leveraging the help of third-party LLC formation services.

Step 2: Obtain an EIN

The second step you’ll need to complete before applying for your business license is to obtain your EIN. This is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses in the United States so that their financial transactions can be identified and tracked.

An EIN is often necessitated when applying for various permits and licenses as it allows local and state governments to ensure your business is operating within the confines of the law. You can obtain it in a number of ways:

• Online: You can apply for your EIN on the IRS’s official website by using the EIN Assistant. You should be granted your EIN shortly after completing this application
• By Fax/Mail: After completing Form SS-4, you can apply for an EIN by submitting it to the IRS via mail or fax
• By Phone: International applicants and businesses located outside US Territories are required to call the IRS at (267) 941-1099 to obtain their EIN — which they should receive during this call

Note: If you are a sole proprietor, you will be able to use your Social Security Number (SSN) instead (as long as you do not have employees).

Step 3: Get a NAICS Code

In Connecticut, you will need to have a North American Industry Classification System (NAICS) code before you can register your business and apply for a business license.

This is a six-digit number that’s associated with a specific business category and is included in your business’s application documents. A NAICS code can help you identify which permits and/or licenses you may need, and is also an essential part of categorizing your NAICS business based on the industry in which you operate.

For more information, we recommend having a look at Connecticut’s NAICS Code List. Alternatively, you can have a look at our in-depth NAICS Code Lookup article.

Step 4: Apply for Licenses and Permits

After settling on the appropriate business entity for your business and initiating the application for your EIN, the next step is to focus on securing the necessary licenses and permits to operate legally within your locale and industry.

• Local Licenses: To apply for a local business license in Connecticut, you will need to check your local government websites or contact the town or city in which your business is located. This is because each municipality can have its own requirements and processes for obtaining a business license
• Statewide Licenses: When applying for a sales and use tax permit in Connecticut, you must register online through the myconneCT online portal. If you’re seeking specific professional or occupational licenses, the Connecticut Department of Consumer Protection’s License, Permit, and Registration Forms page will likely be your go-to resource
• Federal Licenses: While the federal government doesn’t mandate licenses for general business operations, if your business falls under any government-regulated category, such as agriculture, fishing, firearms, and alcohol sales, it may be required to obtain additional federal licenses or permits

Note: For more detailed information on cities and towns and their respective websites, check out Connecticut’s official state website.

Step 5: Renewal of Licenses and Permits

In Connecticut, the renewal process and deadlines depend on the type of license or permit. For example, state-level professional licenses like real estate licenses expire annually on May 31st. 

For local business licenses, the validity period can differ depending on the city or town and the type of license. For example, in Norwalk, licenses issued for street vendors and solicitors are valid for the year in which they are issued and expire on December 31 of that year.

As for the sales and use tax permit, it expires every two years. However, the Connecticut DRS automatically renews it and mails it to businesses at no cost, provided the account is active and in good standing.

If you’re uncertain whether you need to renew any of your business’s licenses, make sure to reach out to the agency that issued your business license for clarification.

Alternatively, you can use a third-party service or a professional attorney for this process. This can be a good choice if you want to ensure that you avoid potential fines, as well as if you want to be as time-efficient as possible.

How Much is a Business License in Connecticut

Your total business license cost in Connecticut will depend on several factors, such as on your location and/or industry.

Here’s a brief summary of the costs you should expect to pay as a small business owner:

• Sales and Use Tax Permit: Generally, you’ll need to shell out around $100 to register for this in Connecticut. Keep in mind that not all businesses will require a seller’s permit
• Business Licenses: The cost for these can differ based on your business type and where it’s located. For instance, acquiring a barber license in Meriden will set you back $100, while in Middletown, some personal care services require a $50 license fee

Keep in mind that the above costs are initial application fees and don’t include other expenses like renewals and processing fees.

For precise cost details that are tailored to your city or county, we recommend consulting with local departments or visiting their official websites. Many business owners opt to use third-party services when it comes to their Connecticut business license requirements in order to ensure that they avoid potential fines and/or other state penalties.