Do I Have to Keep Paying Connecticut State Taxes If I Move My Business to Massachusetts?

Someone on Reddit asked about moving their business from Connecticut to Massachusetts and ceasing operations in Connecticut: once they move and no longer have a physical presence or business activities in Connecticut, do they still have to pay state taxes there? When a business has physical nexus in a state, it generally must pay taxes in that state on its activities there. Whether the obligation continues after the business moves depends on ongoing presence, income sourced to the original state, and state law. Typically, you would not have to continue paying Connecticut state taxes if you move to Massachusetts and cease operations in Connecticut and have no ongoing physical presence or business activities in Connecticut. However, if you have lingering obligations (e.g., unfiled returns, final-year tax) or income still sourced to Connecticut (e.g., from contracts or property), you may still have Connecticut tax liabilities. Formally dissolve or withdraw Connecticut registrations and keep records; consult a tax professional familiar with Connecticut and Massachusetts for your situation.

Bottom line: If you move your business from Connecticut to Massachusetts and cease operations in Connecticut, you typically would not be required to continue paying state taxes in Connecticut, assuming you have no ongoing physical presence or business activities there. If your business has any lingering obligations (e.g., final returns, dissolution filings) or continues to earn income sourced to Connecticut, you may still have Connecticut tax liabilities. Ensure you formally dissolve or withdraw business registrations in Connecticut and keep records of activities in both states. Consult a tax professional familiar with Connecticut and Massachusetts multi-state taxation for precise guidance.

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Question from Reddit

Do I have to keep paying Connecticut state taxes if I move my business to Massachusetts?

I had physical nexus in Connecticut and am moving my business to Massachusetts and ceasing all operations in Connecticut. Do I still have to pay state taxes in Connecticut after the move? I want to make sure I'm not on the hook for anything I'm missing.

Source: Reddit

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Analysis

The user is asking whether Connecticut tax obligations continue after moving the business to Massachusetts and ceasing operations in Connecticut. When a business establishes physical nexus in a state, it is generally required to pay taxes in that state based on its business activities there. Whether the business must continue paying taxes in the original state after moving depends on several factors: the nature of the business operations, the type of taxes owed (income tax, sales tax, etc.), and the specific tax laws of the states involved (Connecticut and Massachusetts). Key questions are: Is there any ongoing physical presence or activity in Connecticut? Is any income still sourced to Connecticut? Are there final-year or dissolution filing requirements?

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Answer

Typically, no. If you move your business from Connecticut to Massachusetts and cease operations in Connecticut, you would not usually be required to continue paying Connecticut state taxes, assuming you have no ongoing physical presence or business activities in Connecticut.

When Connecticut obligations usually end

• Connecticut generally imposes taxes based on physical presence and business activities in the state. If you no longer have a physical presence (e.g., no office, employees, or property in Connecticut) and no continuing business activities there, your nexus in Connecticut ends, and your obligation to pay Connecticut taxes on going-forward activity typically ceases.
• You may still have final obligations for the last period you had nexus (e.g., final income tax return, final sales tax returns, dissolution or withdrawal filings). Those are one-time or winding-down requirements, not ongoing payment.

When you may still have Connecticut liabilities

• Lingering obligations: If your business has unfiled returns, unpaid tax for prior periods, or required dissolution/withdrawal filings in Connecticut, you must satisfy those.
• Income sourced to Connecticut: If your business continues to earn income that is sourced to Connecticut (e.g., from long-term contracts, property, or activities that Connecticut taxes as Connecticut-source income), you may still have Connecticut tax on that income even after the move. State sourcing rules vary; a tax professional can help identify any such income.

Massachusetts

• Massachusetts requires businesses to register and pay taxes when they establish nexus there (including physical presence). Once you move operations to Massachusetts, you will have nexus there and must register, file, and pay Massachusetts taxes as required under Massachusetts law (e.g., M.G.L. c. 63 for corporate excise).

Related: Can My 2-Member LLC with No Employees or Physical Presence Have No Nexus? · Is State Tax Nexus Calculated on an Entity Level? · Why Is Determining Sales Tax Nexus (USA) So Complicated? · Do I Charge Sales Tax on Out-of-State Sales If I Have Nexus Only in PA?

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Applicable Sections

State / Connecticut

• Connecticut imposes taxes based on physical presence and business activities in the state. If you no longer have physical presence in Connecticut, your tax obligations there may cease subject to final returns and any income still sourced to Connecticut (Conn. Gen. Stat. § 12-214 and related provisions). Check the Connecticut Department of Revenue Services or a Connecticut tax professional for your situation.

State / Massachusetts

• Massachusetts requires businesses to register and pay taxes when they establish nexus, including physical presence (M.G.L. c. 63, § 30 and related provisions). Once you move your business to Massachusetts, you must comply with Massachusetts registration and filing requirements. Check the Massachusetts Department of Revenue or a Massachusetts tax professional.

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Practical Notes

• Formally dissolve or withdraw any business registrations in Connecticut if you are no longer conducting business there; this can clarify and limit your tax responsibilities and avoid dormant filing requirements.
• Keep records of your business activities in both states (dates of move, last Connecticut activities, Massachusetts start) to support your position and respond to any state inquiries.
• Consult a tax professional who understands multi-state taxation and Connecticut and Massachusetts tax laws for precise guidance, especially regarding income sourced to Connecticut after your move and final-year filings.

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Limitations

This answer does not cover specific circumstances that may affect your obligations, such as long-term contracts, property ownership, or deferred income in Connecticut, or sales tax and other Connecticut/Massachusetts taxes in detail. State law and agency positions vary. For detailed advice tailored to your move and business, consult a tax professional familiar with Connecticut and Massachusetts tax law. Margen can help you model business income and tax; for multi-state nexus and state compliance, rely on state guidance or a SALT or state tax pro.