Selling a business in Connecticut: what the state takes (2026)
Connecticut’s top individual income tax rate is 6.99%. Here is what an owner selling company stock pays, with 2026 rules from official sources and worked examples at $10 million, $25 million and $50 million.
- 6.99%
- Top Connecticut income tax rate (2026)
- $1,747,500
- State tax on a $25M long-term gain
- 30.8%
- Combined federal and state rate on $25M
- 13 of 51
- Rank by total tax on $25M (1 = highest)
How Connecticut taxes a business sale
- Income tax
- Top rate 6.99%: Over $500,000 (single). With the 2% bracket phase-out and benefit recapture, a single filer with CT AGI above about $545,000 pays roughly 6.99% on all taxable income..
- Long-term capital gains
- Capital gains are taxed as ordinary income with no exclusion. Benefit recapture under CGS 12-700(a)(10)(A)(ii)-(v) removes the benefit of the lower brackets. For single filers the add-ons of up to $250, $2,700 and $450, plus the 2% bracket phase-out, are fully phased in at CT AGI of about $545,000, so a seller of a $10M+ business pays about 6.99% on all income.
- Entity-level taxes
- Connecticut's pass-through entity tax (CGS 12-699) has been elective since tax year 2024.
Three worked examples
| Long-term gain | $10,000,000 | $25,000,000 | $50,000,000 |
|---|---|---|---|
| Federal capital gains tax (20%) | $2,000,000 | $5,000,000 | $10,000,000 |
| Net investment income tax (3.8%) | $380,000 | $950,000 | $1,900,000 |
| Connecticut tax | $699,000 | $1,747,500 | $3,495,000 |
| Total tax | $3,079,000 | $7,697,500 | $15,395,000 |
| Effective combined rate | 30.79% | 30.79% | 30.79% |
| Net proceeds after tax | $6,921,000 | $17,302,500 | $34,605,000 |
| Extra tax versus Texas | $699,000 | $1,747,500 | $3,495,000 |
Seller’s tax calculator
Estimate federal and state tax on a stock sale and what is left before fees and debt.
- Long-term capital gain
- $25,000,000
- Federal capital gains tax (20%)
- $5,000,000
- Net investment income tax (3.8%)
- $950,000
- Connecticut tax
- $1,747,500
- Taxable gain at 6.99%
- $1,747,500
- Total tax
- $7,697,500
- Effective rate on the gain
- 30.79%
- Net proceeds after tax
- $17,302,500
Illustration, not tax advice. Assumes a resident individual, the whole gain long-term, top marginal rates, no state credits, installment terms, QSBS exclusion or other planning, and no local taxes. Net proceeds are before transaction fees, debt repayment, escrows and earn-outs. Rates are for tax year 2026 where published; see the methodology.
Compare with other states
Neighboring states
- Massachusetts32.6% combined, $16.84M net
- New York34.1% combined, $16.48M net
- Rhode Island29.8% combined, $17.55M net
Common comparisons
- California37.1% combined, $15.72M net
- Texas23.8% combined, $19.05M net
- Florida23.8% combined, $19.05M net
- Nevada23.8% combined, $19.05M net
- Washington33.5% combined, $16.63M net
- Tennessee23.8% combined, $19.05M net
Methodology and sources
Connecticut figures are for tax year 2026. CGS 12-700(a)(10) sets the rates for taxable years from 2024 on; the brackets are not indexed, so they apply to 2026. Two 2026 bills for a capital gains surcharge (SB 104 and HB 5185) died in the Finance Committee. The examples assume a resident individual selling privately held stock for a long-term gain equal to the sale price (zero basis), with every dollar taxed at the top marginal rates, the federal 20% capital gains rate and the 3.8% net investment income tax, and no planning, credits or local taxes. Full assumptions are in the report methodology.
All 50 states and DC with source URLs.
- 1CGS 12-700 (rates and recapture for taxable years from Jan 1, 2024)
- 2CGS chapter 228z, 12-699 (elective pass-through entity tax from 2024)
- 3CGA bill status 2026 SB 104 (capital gains surcharge, referred to FIN only)
- 4CGA bill status 2026 HB 5185 (capital gains and dividends surcharge, referred to FIN only)
- 5Tax Foundation, State Individual Income Tax Rates and Brackets, 2026. Secondary source
Data last updated October 26, 2026.
Cite this research
You may quote and republish figures from this page with attribution and a link to the source.
Citation
Laurent Capital Research, “The Seller’s Tax Map: What Selling a Business Costs in Every State (2026): Connecticut,” 2026, https://laurent.capital/research/seller-tax-map/connecticutLink (HTML)
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