How to Start an Online Store in Connecticut: Sales Tax Permit, Trade Name and Marketplace Rules

Starting an online store in Connecticut is less complicated than many sellers expect, but the paperwork has to happen in the right order. The state has no general business license. Instead, you handle three separate things: the name and entity you operate under (filed with the Secretary of the State or your town clerk), the sales and use tax permit you need from the Connecticut Department of Revenue Services (DRS) to collect tax on taxable sales, and any trade-specific or local approval your products require. This guide walks through how to start an online store business in Connecticut in the order most sellers should handle it.

Informational content, not legal or tax advice. This article explains general Connecticut requirements as of October 2026. Fees, thresholds, and forms change. Confirm current figures with the agency named in each step, and consult a qualified Connecticut attorney or certified public accountant (CPA) before you decide on entity structure, sales tax collection, or marketplace agreements.

What you need before you start

• A decision on how you will operate: sole proprietorship, limited liability company (LLC), or corporation
• Your legal name and the exact name you plan to sell under
• A Business.CT.gov account if you are forming an LLC or corporation
• A registered agent: a Connecticut resident age 18 or older, or a business entity registered with the Secretary of the State, at a usual place of business in Connecticut (a post office box or commercial mailbox does not qualify)
• Budget for the core state costs: $120 for an LLC Certificate of Organization and $100 for the DRS sales and use tax permit, plus $20 if you need a trade name certificate and $60 if you want to reserve a name first
• A product list sorted by category, since the categories determine which licenses apply
• Draft shipping, return, and sales tax policies you can publish before launch
• Your home address and your town zoning rules, if you will work from home
• A bank account in the business name

Step-by-step: how to start an online store business in Connecticut

Step 1: Choose your structure and check the name

A sole proprietorship does not file a formation document with the Secretary of the State. If you sell under your own legal name, you can start selling without a state filing. If you want a separate storefront name, you need a trade name certificate (Step 3).

An LLC is formed by filing a Certificate of Organization through Business.CT.gov for a $120 filing fee. The name must contain “Limited Liability Company” or an abbreviation such as “LLC” or “L.L.C.”, and it must be distinguishable on the record from names already registered or reserved. You can check availability for free with the Business.CT.gov business records search. If you need more time to decide, you can reserve a name for 120 days for $60.

A corporation is formed by filing a Certificate of Incorporation for $250, followed by the Organization and First Report at $150. Most first-time online sellers do not need a corporation, but a CPA can tell you whether it fits your plans.

Expedited service costs $50 per transaction and is completed within 24 hours of receipt, but only for filings submitted online through Business.CT.gov. The state says most online filings are accepted automatically, so expedited service is usually unnecessary.

Step 2: Appoint a registered agent

Every LLC and corporation formed in Connecticut must appoint and keep a registered agent who receives legal and official correspondence for the business. The agent must be a Connecticut resident age 18 or older, or a business entity registered with the Secretary of the State. The agent's address must be a real place of business in Connecticut that is customarily open during normal business hours with an authorized person present. A home address can work if it meets that standard, so confirm with your agent before you file. A post office box or commercial mailbox does not qualify. Agent information is confirmed and updated each year with your annual report.

Step 3: Decide whether you need a trade name certificate

You need a trade name certificate when you sell under a name other than your real name. For a sole proprietor, that means any storefront name that is not your own legal name. For an LLC, it means any name that is not the exact name on your Secretary of the State record. An LLC that sells under its exact registered name is exempt under Connecticut General Statutes 35-1(a). If your LLC is Harbor Soap Works LLC and your storefront says “Harbor Soap Works,” you do not need a certificate. If the storefront says “Harbor Soap,” you do.

The certificate is filed with the town clerk, not the Secretary of the State. The fee is $20, payable to the town clerk. The filing goes to the town where the business is primarily transacted. An online store has no obvious storefront, so call the town clerk and confirm which town applies before you file. The state's trade name guidance explains the process.

Step 4: Register for a Sales and Use Tax Permit

A business that sells taxable goods or services must obtain a Sales and Use Tax Permit from DRS. The registration fee is $100. The general state sales tax rate is 6.35%. The permit must be displayed at each location where you sell, so ask DRS how that rule applies to a home office or a storage space you use for shipping. You can find the permit application and current guidance on the DRS sales tax information page.

Before you launch, confirm with DRS whether your shipping and handling charges are taxable, which products are exempt, and how often you must file returns. Those answers depend on what you sell and how you charge customers, and the rules are easy to get wrong when a store carries many product types.

Step 5: Check the out-of-state seller rules

If your business is based outside Connecticut but ships to Connecticut customers, you must register with DRS once you meet both tests. You have made 200 or more retail sales into Connecticut, and you have $100,000 or more in gross receipts from Connecticut sales in the 12 months ending the prior September 30. Count your sales carefully, because the look-back period is fixed to that September 30 date rather than to the calendar year. Find the current nexus guidance on the DRS website.

Step 6: Understand marketplace facilitator rules

If you sell through a marketplace such as Amazon or Etsy, the marketplace may be a marketplace facilitator. A facilitator must collect and remit Connecticut sales tax on the sales it facilitates once those sales reach $250,000 in the prior 12 months. As a seller, you can rely on the facilitator to collect the tax on those sales. The reliance is documented through the marketplace agreement or DRS Form DRS-055, and you should confirm with DRS which documentation your situation requires.

The facilitator rule covers only the sales the marketplace facilitates. Sales you make through your own website remain your responsibility. If you sell in both places, track the two channels separately from the start. That makes it much easier to tell which tax obligations sit with the marketplace and which sit with you.

Step 7: Check whether your products need a license

Connecticut has no general state business license. Licensing depends on the trade, and different agencies handle different products. The Department of Consumer Protection (DCP), the Department of Public Health (DPH), the Insurance Department, and the Department of Banking each cover different industries. Start with the Business.CT.gov New Business Checklist, which points you to the right agency.

If you sell food, cosmetics, or other health-related products, check with DPH and your local health department or health district. Alcohol sales involve DCP. Confirm the requirements for your exact products before you list them, because a product can fall under a regulated category even when it looks like an ordinary consumer good.

Step 8: Confirm home-business zoning with your town

Zoning is local. Your town's zoning regulations decide whether you can run a business from a residence, how much storage and foot traffic are allowed, whether you can have employees, and what signage is permitted. Contact your town's zoning office before you store inventory at home or hire help. Ask for the answer in writing if you can. Rules differ from one town to the next, so do not assume that a neighboring town's answer applies to you.

Step 9: Calendar your annual filings and tax obligations

An LLC must file an Annual Report with the Secretary of the State every year. The fee is $80. A corporation's Annual Report fee is $150. Business.CT.gov shows each entity its own next due date in the account, rather than a single statewide deadline. Widely reported practice for LLCs is a January 1 to March 31 window, so check your account and set a reminder well ahead of the date.

Connecticut has no franchise tax or annual privilege tax on LLCs. An LLC taxed as a partnership or S corporation may elect the optional Pass-Through Entity Tax with DRS. The election is annual and irrevocable for that year. An LLC taxed as a corporation pays the Corporation Business Tax at 7.5% of apportioned net income, with a $250 minimum, plus a capital base tax that is being phased out and a 10% surtax for companies with $100 million or more of total income. A sole proprietor reports business income on the personal return, where Connecticut's personal income tax uses seven brackets from 2% to 6.99%. Have a CPA confirm which of these applies to you.

Step 10: Run a pre-launch checklist

• Your entity or trade name is filed, and the name on your storefront matches the record or the certificate
• Your DRS permit is issued and displayed as required
• Your checkout charges sales tax only on the items and charges DRS confirms are taxable
• Your product categories have been checked against the relevant agency
• Your registered agent is in place and your annual report date is on your calendar
• Your privacy policy, return policy, and shipping terms are published
• Your sales records are kept separately by channel, including marketplace sales

Tips for a smoother setup

• File the entity first, then the trade name, then the DRS permit. Each step can rely on the one before it.
• Use the exact registered name on your storefront when you can. That avoids a town filing and keeps your records simple.
• Keep one folder with every confirmation number, receipt, and written answer from an agency or town office.
• Ask DRS about your specific product mix before launch. General guidance rarely settles questions about shipping charges or exempt items.
• Set up a separate business bank account so your sales tax collections are easy to trace.

Common mistakes to avoid

• Selling under a storefront name without filing a trade name certificate when the exemption does not apply
• Using a post office box as the registered agent address
• Assuming the marketplace collects all of your Connecticut sales tax, when it covers only the sales it facilitates
• Missing the out-of-state registration test because the 200 sales and $100,000 receipts were counted on the wrong period
• Storing inventory or hiring help at home without checking the town zoning rules
• Forgetting the annual report, which keeps the entity in good standing and must confirm the registered agent

What to expect after you set up

Once your entity, trade name if needed, and DRS permit are in place, you can usually begin selling as soon as your checkout and policies are ready. Online filings with the Secretary of the State are commonly accepted automatically, and the state does not publish a standard turnaround figure for ordinary filings, so build in extra time before a planned launch date. Results from an online store depend on product, pricing, marketing, and competition, and this guide cannot promise any particular sales outcome. Treat the setup as the foundation for compliance, and plan your marketing and inventory separately.

Where to get help

The Connecticut Small Business Development Center (CTSBDC) offers free and low-cost advising for new businesses, and the U.S. Small Business Administration Connecticut district page lists local resources. For entity choice, tax treatment, or marketplace contracts, a Connecticut attorney or CPA can review your specific situation. Keep in mind that this article is informational only and is not legal or tax advice.