Connecticut

Multi-State Compliance Matrix

Updates

What You’ll Learn

If you are a nonprofit in Connecticut—or if your nonprofit plans to fundraise or have programs in the state—you must know Connecticut’s nonprofit laws and regulations.

How can you come to know these laws? Where should you start?  

Start here. Below you will find lists and explanations of the laws that you must follow in this state. When you are finished, you will know what forms to file to set your organization up for success in Connecticut.  

Getting to Know the State Nonprofit Corporation Law

Background

*Important primarily for nonprofits incorporated in Connecticut  

“[W]hat is a hobbit? I suppose hobbits need some description nowadays, since they have become rare and shy of the Big People, as they call us. They are (or were) a little people, about half our height, and smaller than the bearded Dwarves. Hobbits have no beards. There is little or no magic about them, except the ordinary everyday sort which helps them to disappear quietly and quickly when large stupid folk like you and me come blundering along, making a noise like elephants which they can hear a mile off. They are inclined to be fat in the stomach; they dress in bright colours (chiefly green and yellow); wear no shoes, because their feet grow natural leathery soles and thick warm brown hair like the

stuff on their heads (which is curly); have long clever brown fingers, good­natured faces, and laugh deep fruity laughs (especially after dinner, which they have twice a day when they can get it). Now you know enough to go on with.”

- The Hobbit, J. R. R. Tolkien

When reading a novel, we get to know a fictional character by the author’s description of him or her. The author tells us what the character will look like, what his or her purpose will be, how he or she will act, and how he or she will make decisions.  

Nonprofit corporations are something like fictional characters.  

We learn how a nonprofit will look and act and make decisions not by reading a novel, but by reading the state law (called the nonprofit corporation act) and the rules the nonprofit makes for itself (called the bylaws and articles of incorporation). The law and the organization’s own rules tell us what the organization will be called, what its purpose will be, how the nonprofit will act, and how it will make decisions.  

To get to know your own nonprofit, you must be familiar with the sections below.  

State Nonprofit Corporation Law

Corporate Governance

Conflict Transactions: Conn. Gen. Stat. § 33-1129. Need to review the basic best practices for conflicted transactions? See Bylaws Module 14: Conflicts of Interest.

Director Standards of Conduct: Conn. Gen. Stat. § 33-1104. Need a refresher on the role of directors? See Bylaws Module 6: Directors.  

Members: Eligibility and Statutory Powers: Conn. Gen. Stat. § 33-1071. Not sure what a “member” is? Need to review the basics? See Bylaws Module 5: Members.

Indemnification: Conn. Gen. Stat. § Section 33-1116. Not sure what “indemnification” is? Need to review the basics? See Bylaws Module 8: Indemnification.

For Religious Nonprofits

Nonprofit Religious Corporation Act: Connecticut’s nonprofit corporation law lacks: (a) specific provisions permitting the formation of nonprofit religious corporations; (b) specific protections for religious exercise at faith-based organizations, and (c) express acknowledgement of an option for nonprofits to incorporate for religious purposes. See Conn. Gen. Stat. § 33-1000, et. seq. Confused about what it means to be a religious nonprofit corporation? See our whitepaper “Why a Religious Corporation?

Standards of Conduct for Directors – Reliance on Religious Authorities:  Connecticut permits a director, in the fulfillment of the director’s fiduciary duties, to rely on the opinion of individuals who can reasonably be assumed to have expertise on a certain matter, but does not expressly allow a director to rely on guidance from religious figures within his or her faith tradition. See Conn. Gen. Stat. § 33-1104

Understanding Religious Liberty in this State

Case Study

*Important for all nonprofits doing business in Connecticut, whether incorporated in Connecticut or elsewhere  

“The state or any political subdivision of the state shall not burden a person's exercise of religion…even if the burden results from a rule of general applicability, except…if it demonstrates that application of the burden to the person (1) is in furtherance of a compelling governmental interest, and (2) is the least restrictive means of furthering that compelling governmental interest…A person whose exercise of religion has been burdened in violation of the provisions of this section may assert that violation as a claim or defense in a judicial proceeding and obtain appropriate relief… For the purposes of this section, ‘state or any political subdivision of the state’ includes any agency, board, commission, department, officer or employee of the state…”

- Conn. Gen. Stat. § 52-571b.

Sometimes, the state or local government (like the city or county) makes laws that could conflict with your organization’s free exercise of religion or its sincerely-held religious beliefs.  

For example, a law might require employers not to make faith-based distinctions between job candidates. If your organization’s mission is to pass on the teachings of your faith, you will need to make faith-based distinctions in evaluating candidates because their faith commitments will impact their abilities to partner in your mission and witness the faith to your program participants.

So, what do you need to do? Be aware of the laws listed below. If any of the laws impact your organization—for example, if you are an employer or a facility open to the public—learn more about how you can protect yourself by reviewing Napa Legal’s religious liberty resources. Talk to an attorney if you have specific concerns.

Religious Liberty Protections

State Religious Freedom Restoration Act: Connecticut was the first state to enact a RFRA protecting the religious free exercise of all individuals and entities by requiring government burdens on religious exercise to satisfy strict scrutiny. These protections are statutory and have not been incorporated into the state constitution. Conn. Gen. Stat. § 52-571b. Not sure what a “religious freedom restoration act” is? Click here to learn the fundamentals.

Constitutional Protections for Free Exercise: The Connecticut Constitution follows in lockstep with the federal constitution’s protections, meeting but not exceeding the required minimum protections of the First Amendment. Conn. Const. Art I, §§ 3 and 20; Art. VII

State Blaine Amendment: Connecticut’s constitution does not contain a Blaine Amendment but also does not expressly protect faith-based organizations’ freedom to participate in public benefit programs on the same terms as similarly situated secular institutions. Not sure what a Blaine Amendment is? Review the basics here.

Other Relevant State Laws and Regulations

Religious Freedom and Public Accommodation Laws:  Connecticut’s nondiscrimination laws generally restrict religious freedom for religious organizations that offer public programming and facilities and provide accommodations or exemptions but only for a narrow spectrum of religious organizations. Conn. Gen. Stat. § 46a-64. Not sure what a public accommodation law is or what it means for your organization’s religious liberty? Learn the basics in this article which discusses the issue in the context of the case Fulton v. City of Philadelphia.

Protections for Religious Exercise in State of Emergency: Connecticut law has no explicit constitutional or statutory protections for religious exercise during a time of emergency.

Key Employment Laws and Regulations

Employment Discrimination Laws and Regulations: Public Act 11-55; Conn. Gen. Stat. § 46a-51

Religious Freedom for Faith-Based Employers: Conn. Gen. Stat. § 46a-60. Need to review the basics on religious freedom and employment matters? Walk through a self-audit of best practices here.

Religious Freedom for Employees: No specific protections for employees’ free exercise in the workplace are present.  

Conducting Activities or Programs in this State

Understanding the Business Registration Requirement

*Important primarily for nonprofits doing business in Connecticut but incorporated elsewhere 

If your organization is planning on hosting programs in Connecticut or interacting regularly with Connecticut donors or program participants, you may also need approval from the Connecticut Secretary of State for these activities, in addition to the charitable registration discussed above.  

There is a technical term for this approval—“a certificate of authority.” Of course, this label is confusing, since your organization is not really seeking “authority” in the usual sense of the word.  

How do you know if you need a certificate of authority? Ultimately, you have to make an informed judgment call. Asking an attorney for assistance is often prudent if you aren’t sure whether this is required for your organization.

If you have only occasional connections with Connecticut, your organization might not need to register, but if you have significant connections, such as in-person programming or regular fundraising drives, you likely are subject to the registration requirement.  

Periodic Reporting for Foreign Businesses: Conn. Gen. Stat. § 33-1243

Business Registration Statute

Fundraising and Charitable Registration in This State

How to Know (And What to D0) If You're Fundraising In This State

*Important for all nonprofits doing business in Connecticut, whether incorporated in Connecticut or elsewhere 

Not sure what “charitable registration” is? Need to review the basics? Read this article for a refresher.

What does it mean to “fundraise”? Connecticut law says you are fundraising, often called “soliciting,” any time you ask for donations on behalf of a charity. And if you are planning to ask for donations in Connecticut, you first must register, unless you are eligible for an “exemption.” An “exemption” excuses the organization from completing certain requirements.  

How do you know if you are eligible for an exemption? Connecticut has several different exemptions, and each one has different eligibility requirements. We will discuss the two exemptions that most often apply to faith-based nonprofits below:  

  1. Religious Exemption. If your organization is faith-based, you might be eligible for a religious exemption. You must apply to receive this exemption—religious organizations are not automatically exempt.  
  1. Revenue-Based Exemption. Even if your organization is not faith-based, you might be eligible to apply for an exemption if you both (1) receive less than $50,000 in contributions annually and (2) do not pay a professional fundraiser. (This can be a little confusing—Connecticut’s law does not specify whether the $50,000 threshold refers to all contributions or contributions from Connecticut sources only.)

You can apply for these exemptions online (Form CPC-54) and submit the form (online or through hard-copy mail) through the Connecticut Department of Consumer Protection, under the Charitable Solicitation Registration section.

If You're Fundraising In Multiple States, Make Sure You Understand the URS

If Connecticut is just one of several states where your organization is planning to fundraise, you should consider using the Unified Registration Statement (URS), which is a standardized charitable registration accepted in many states. The advantage of the URS is that you can use one form (with applicable attachments) to register in 37 states. The disadvantage is that you can’t file online, which will eventually be required anyway since Connecticut requires your organization to file reports online every year.

Evaluate Whether You'll Need a Registered Agent

Some states require organizations to appoint a “registered agent” in the state as part of the organization’s charitable registration.  Connecticut does not currently have this requirement as part of the charitable registration process. However, if you are planning to have enough activities in Connecticut that you need to complete a foreign business registration, you will need to designate a registered agent in order to complete that process. In other words, if your organization is passively accepting donations from Connecticut donors, but is not hosting events and programs there, you might not need to a registered agent in Connecticut. Talk to a local attorney if you are unsure whether you meet these requirements.

Follow the Rules About Communicating with the Public

Connecticut does not require organizations to post specific language when conducting charitable solicitations.

Charitable Registration Statute

Charitable Registration Exemption Statute

Annual Report Requirement

Get Acquainted with State and Local Taxes and Exemptions

State and Local Taxes

*Important for all nonprofits doing business in Connecticut, whether incorporated in Connecticut or elsewhere 

In Connecticut, organizations that have received a federal income tax exemption are also exempt from the state income tax.  However, to receive this exemption, organizations must apply. The exemption is not automatic. Note that, although an organization may be exempt, if it has unrelated business taxable income (UBTI) that is subject to federal taxation, that UBTI may be subject to state income tax.ii Consult with an accountant or attorney to confirm.  

It is also important to consider whether applying for sales and use tax and property tax exemption would be appropriate for your organization. An accountant or attorney can provide specific answers to these questions.  

Corporate Income Tax Statute

Connecticut imposes a statewide corporate income tax but offers an exemption to organizations with federal 501(c)(3) exempt status upon application. Conn. Gen. Stat. § 12-214

Corporate Franchise Tax Statute

What You Need to Know About Sales Tax

Sales and Use Tax:  Connecticut imposes a sales and use tax on religious organizations’ sales but provides limited exemptions for sales of certain items. Connecticut imposes a sales and use tax on a religious organizations’ purchases, but generally provides 501(c)(3) religious organizations broad and comprehensive, entity-based tax exemption upon application. Conn. Gen. Stat. § 12-406, et. seq. ; Conn. Gen. Stat. § 12-408; Conn. Gen. Stat. § 12-411;

State Sales and Use Tax and Required Registrations: Conn. Gen. Stat. § 3-114b

State Tax Treatment of Unrelated Business Income: Conn. Gen. Stat. § 12-242bb; Conn. Gen. Stat. § 12-242aa

State-Specific Special Requirements

Miscellaneous

Legal Disclaimer

This resource contains general educational information related to legal concepts, but this information does not constitute legal advice. Anyone seeking legal advice is strongly encouraged to consult with a licensed attorney regarding any of the matters discussed herein. Although licensed attorneys work with Napa Legal, Napa Legal is not a law firm and does not undertake legal representation on behalf of any clients. Further, no licensed attorney working with or on behalf of Napa Legal agrees to undertake legal representation on behalf of any client unless the terms of such representation are set forth in a separate, written representation agreement.

Become a member or sign in to access the full Multi-State Matrix and Napa Legal's entire library of resources.

Create an All Access Account to view every state plus additional content from our expansive Nonprofit Library.

**Please note that the following state profiles are forthcoming and will be published soon:Hawaii and Washington