California LLC vs Montana LLC (2026)
Compare California LLC vs Montana LLC on filing fees, taxes, privacy laws, and annual costs. Find out which state is actually better for your business.
By Edmond Hui · Last updated: August 4, 2026
Verdict: California wins for most businesses
For most California-based businesses, forming locally in California is the smarter choice. You avoid paying fees in two states and managing compliance in both. Montana only makes sense if your business genuinely operates there, and even then the total costs deserve a hard look.
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| Factor | California | Montana |
|---|---|---|
| Filing Fee | $70 | $35 |
| Processing Time | Live queue, not fixed | Not published by the state |
| Annual Report Fee | $20 | $20 |
| Annual Report Due | Anniversary month | April 15 |
| State Income Tax | Yes | Yes |
| Anonymous LLC | No | No |
| Publication Requirement | No | No |
| Foreign LLC Cost (if forming out-of-state) | N/A, you're in your home state | $70 + registered agent ~$150/yr |
Full fee breakdown for either state: California LLC cost and Montana LLC cost.
Business Climate: California vs Montana
| Factor | California | Montana |
|---|---|---|
| 5-year business survival rate | 53.7% (#12 of 51) | 53% (#16 of 51) |
| Business application growth (2026 YTD (Jan to Jul) vs 2025 YTD (same months)) | +14.7% YoY (#2 of 51 by volume) | +13.4% YoY (#40 of 51 by volume) |
Sources: U.S. Bureau of Labor Statistics, Business Employment Dynamics · U.S. Census Bureau, Business Formation Statistics (BFS)
Compare LLC Costs: California vs Montana
California
Montana
Costs include every mandatory state charge: the filing fee, the report fee (annualised where a state files biennially), any state entity-level tax shown in its own row above, a one-time publication cost where a state requires publication, and any one-time registration charge a state requires before the LLC may trade. Annualising makes the 1, 3 and 5 year rows a cost of ownership rather than a payment schedule: a biennial state charges its whole report fee in the years it falls due and nothing in between. Entity-level taxes that only apply after a corporate election, or above an owner or income threshold, are excluded and flagged on the state's own cost page. New York's publication cost is carried at a $250 floor, roughly $200 of newspaper cost in a low-cost county plus the $50 Certificate of Publication fee. No county-clerk-designated New York City newspaper publishes a rate card, so the four-figure NYC estimates in wide circulation cannot be traced to a primary source and are not asserted here; budget for materially more than the floor if you file in a NYC county. Montana's annual report is free when filed by April 15 and $35 after, a waiver the Secretary of State applies at its discretion. Every fee was verified against the state's own fee schedule, statute, or revenue authority on 29 July 2026. Excludes registered agent and legal fees. For informational purposes only, not legal or tax advice.
Filing Fees & Formation Costs
California charges $70 to form an LLC, while Montana charges $35. Montana is $35 cheaper upfront. The cost that usually gets overlooked: if you form in Montana but operate in California, you must also register as a foreign LLC in California (a $70 filing) and maintain a registered agent in Montana (typically around $150 per year). That puts the realistic first-year cost of the Montana route at roughly $255, versus $70 for simply forming in California. Speed isn't a basis for choosing between them: neither California nor Montana publishes a standard processing time, so any figure comparing the two is guesswork.
Taxes: California vs Montana
Both California and Montana levy a personal income tax on pass-through business income, and your LLC's profits will be taxed where you live and operate. Forming in Montana doesn't change what a California-based owner pays. Montana levies a two-bracket individual income tax; per HB 337 (2025) the top rate drops from 5.9% to 5.65% effective January 1, 2026, with the 4.7% lower rate applying up to $47,500 single/$95,000 joint (Montana Department of Revenue). California LLCs owe an $800 minimum annual franchise tax to the Franchise Tax Board, plus an LLC gross-receipts fee above $250,000 of California income. No franchise or privilege tax on LLCs; the Secretary of State currently waives the annual report fee for reports filed by April 15 ($35 if filed late).
Privacy & Asset Protection
Neither California nor Montana offers anonymous LLC formation: both states require owner or manager information on public filings. MCA 35-8-208 requires the LLC's annual report to state the names and business mailing addresses of the managers (if manager-managed) or of the members (if member-managed), and these reports are public. Business owners who prioritize privacy typically form a holding company in a state like Wyoming or New Mexico instead. Both states provide charging-order protection for LLC members, and for most small businesses the practical difference in asset protection between the two is minimal.
Annual Maintenance Costs
California LLCs file an annual report ($20, due in the anniversary month), and Montana LLCs file an annual report ($20, due April 15). If you form in Montana while operating in California, you maintain filings in both states, Montana's report plus California's equivalent for your foreign registration, and pay a Montana registered agent roughly $150 per year. That brings ongoing costs of the Montana route to roughly $190 per year, versus about $20 to keep a domestic California LLC in good standing. There are also recurring state taxes to weigh on each side. California LLCs owe an $800 minimum annual franchise tax to the Franchise Tax Board, plus an LLC gross-receipts fee above $250,000 of California income. No franchise or privilege tax on LLCs; the Secretary of State currently waives the annual report fee for reports filed by April 15 ($35 if filed late).
When Montana Actually Makes Sense
Forming in Montana makes sense in a few specific situations: your business genuinely operates in Montana, with a real office, employees, or property there, or you're relocating to Montana in the near future. For a typical small business based in California, none of these usually apply. Registering a Montana LLC to do business back home means $70 in California foreign-registration fees, on top of Montana's $35 formation fee, while California's own annual report runs $20 a year and is due in the anniversary month. When in doubt, form where you actually do business.
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