Arizona LLC vs Delaware LLC (2026)
Compare Arizona LLC vs Delaware LLC — filing fees, taxes, privacy laws, and annual costs. Find out which state is actually better for your business.
| Factor | Arizona | Delaware |
|---|---|---|
| Filing Fee | $50 | $90 |
| Processing Time | 14 day(s) | 7 day(s) |
| Annual Report Fee | $0 | $300 |
| Annual Report Due | Anniversary month | June 1 |
| State Income Tax | No | No |
| Anonymous LLC | No | Yes |
| Publication Requirement | No | No |
| Foreign LLC Cost (if forming out-of-state) | N/A — you're in your home state | ~$150 + registered agent ~$200/yr |
Verdict: Arizona wins for most businesses
For most Arizona-based small businesses, forming locally in Arizona is the better choice due to lower costs and no foreign registration requirements. Delaware only makes sense if you need anonymous ownership or have investors specifically requiring Delaware formation.
Filing Fees & Formation Costs
Arizona charges just $50 to form an LLC, while Delaware costs $90 upfront. However, if you form in Delaware but operate in Arizona, you'll also need to register as a foreign LLC in Arizona (around $150) plus pay for a Delaware registered agent (~$200/year). This means Delaware formation actually costs $440+ in the first year versus just $50 for Arizona. The hidden foreign registration requirement makes Delaware significantly more expensive for Arizona-based businesses.
Taxes: Arizona vs Delaware
Both Arizona and Delaware don't impose state income tax on LLCs — profits pass through to members' personal tax returns. Delaware does charge a $300 annual franchise tax while Arizona has no annual tax. Arizona LLCs only pay their members' personal state income tax (up to 4.5%), while Delaware has no personal income tax but you'd still owe Arizona personal taxes if you live there. For Arizona residents, there's no tax advantage to forming in Delaware.
Privacy & Asset Protection
Delaware allows anonymous LLC ownership — you don't need to publicly disclose member names in state filings. Arizona requires disclosure of at least one member or manager name in public records. Both states offer strong charging order protection for LLCs. However, if privacy is your main concern, remember that forming in Delaware while operating in Arizona may still require disclosure in Arizona's foreign LLC registration. Delaware's privacy advantage may be limited for Arizona-based businesses.
Annual Maintenance Costs
Arizona LLCs pay $0 in annual fees — just file a basic annual report during your anniversary month. Delaware charges $300 annually for the franchise tax report due June 1st. If you form in Delaware, you'll also need to maintain a Delaware registered agent (~$200/year) in addition to any Arizona requirements. Over five years, an Arizona LLC costs $50 total while a Delaware LLC costs over $1,500 in Delaware fees alone, not counting foreign registration costs.
When Delaware Actually Makes Sense
Delaware formation is worth considering if you need anonymous ownership that Arizona can't provide, plan to raise venture capital (many VCs prefer Delaware), or expect to go public eventually. Delaware's Court of Chancery offers specialized business law expertise for complex disputes. However, for typical small businesses, freelancers, or local service companies operating primarily in Arizona, the extra costs and complexity aren't justified. Most Arizona entrepreneurs should form locally unless they have specific privacy or investor requirements.