Is it cheaper to form an LLC in Tennessee than Massachusetts?

Tennessee's filing fee is lower (at least $300 vs $520), but that's not the full picture: operating in Massachusetts means also registering as a foreign LLC there ($500) and paying a Tennessee registered agent. Realistic first-year cost is at least $950 for the Tennessee route versus $520 for forming in Massachusetts.

Can I form my Massachusetts business in Tennessee?

Yes. Any Massachusetts business can form its LLC in Tennessee. But if the business operates in Massachusetts, it must also register there as a foreign LLC ($500 filing fee) and maintain a registered agent in Tennessee, so you take on two states' fees and filings instead of one.

Does Tennessee have better asset protection than Massachusetts?

Not meaningfully. Both states provide charging-order protection for LLC members, and neither offers a decisive asset-protection edge for a typical small business. Sound insurance and clean separation of business and personal finances matter more in practice.

State Comparison

Massachusetts LLC vs Tennessee LLC (2026)

Written for owners based in Massachusetts.

Verdict: for most owners, form where the business is based

Tennessee is the state here whose fees scale with your membership. The annual report starts at $300 and is charged at $50 per member up to a $3,000 cap, and formation works the same way, so a ten-member LLC pays $500 both times. A $100 minimum franchise tax sits on top, payable whether the LLC is active or inactive. Massachusetts charges a flat $520 however many members you have, $1,040 in year one, so Tennessee is cheaper only for a small membership, and a $500 registration here closes even that.

Based in Tennessee? Read Tennessee LLC vs Massachusetts LLC →

Compare Massachusetts LLC vs Tennessee 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: September 23, 2026

If your business is based in Massachusetts, a Massachusetts LLC needs no foreign registration there; a Tennessee LLC run from Massachusetts generally must also register in Massachusetts as a foreign LLC (Massachusetts's $500 filing fee). If your business is based in Tennessee, a Tennessee LLC needs no foreign registration there; a Massachusetts LLC run from Tennessee generally must also register in Tennessee as a foreign LLC (a filing fee of at least $300). An LLC formed in one of these states and run from the other owes whatever filings, fees and taxes each state requires. A Massachusetts LLC runs $1040 in year one and $520/yr after; a Tennessee LLC runs from $700 and from $400/yr. See the full breakdown below.

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Factor	Massachusetts	Tennessee
Filing Fee	$500 by mail, $520 online (mandatory $20 expedite fee)	$300
Processing Time	Not published by the state	Not published by the state
Annual Report Fee	$500 by mail, $520 online	$300
Annual Report Due	Anniversary date	April 1
State Income Tax	Yes	No
Anonymous LLC	No	No
Publication Requirement	No	No
Foreign LLC Cost (if forming out-of-state)	N/A, you're in your home state	$500 + registered agent ~$150/yr

Full fee breakdown for either state: Massachusetts LLC cost and Tennessee LLC cost. Owner privacy options for either state: Massachusetts anonymous LLC guide and Tennessee anonymous LLC guide.

Business Climate: Massachusetts vs Tennessee

Factor	Massachusetts	Tennessee
5-year business survival rate	52.7% (#18 of 51)	46.4% (#45 of 51)
Business application growth (2026 YTD (Jan to Jul) vs 2025 YTD (same months))	+11.9% YoY (#21 of 51 by volume)	+19.9% YoY (#16 of 51 by volume)

Sources: U.S. Bureau of Labor Statistics, Business Employment Dynamics · U.S. Census Bureau, Business Formation Statistics (BFS)

See the full 50-state survival ranking.

Compare LLC Costs: Massachusetts vs Tennessee

State A

State B

Massachusetts

Formation fee$520

Annual report fee$520

State entity taxNone

Report dueAnniversary date

Processing timeNot published by the state

Late penalty$0

Tennessee

Formation feefrom $300

Annual report feefrom $300

State entity taxfrom $100/yr, Franchise and Excise Tax

Report dueApril 1

Processing timeNot published by the state

Late penalty$0

Total Cost

Massachusetts

Tennessee

1 Year

$1,040

from $700

3 Years

$2,080

from $1,500

5 Years

$3,120

from $2,300

Will you operate outside your home state?

A figure shown as "from" is the least the state can charge, not a price. Tennessee's report is $300 for up to six members and $50 for each member above six, its franchise tax is the greater of $100 or 0.25% of Tennessee net worth, Wyoming's report is the greater of $60 or $.0002 per dollar of in-state assets, Kentucky's entity tax is $175 up to $3 million of gross receipts and graduated above it, and New York's annual filing fee is graduated on New York source gross income. A total that contains one of those is shown as "from" for the same reason. 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 the state publishes a rate for it, and any one-time registration charge a state requires before the LLC may trade. Two exclusions follow from that wording. Arizona and Nebraska require publication and publish no rate, so no newspaper cost is carried for either and their totals are not the whole cost. Alaska's $50 annual state business licence is a separate charge from the Secretary of State fees and is not carried here either. 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. 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

Massachusetts charges $520 to form an LLC, while Tennessee charges at least $300. Tennessee is $220 cheaper upfront. The cost that usually gets overlooked: if you form in Tennessee but operate in Massachusetts, you must also register as a foreign LLC in Massachusetts (a $500 filing) and maintain a registered agent in Tennessee (typically around $150 per year). That puts the realistic first-year cost of the Tennessee route at least $950, versus $520 for simply forming in Massachusetts. Speed isn't a basis for choosing between them: neither Massachusetts nor Tennessee publishes a standard processing time, so any figure comparing the two is guesswork.

Taxes: Massachusetts vs Tennessee

Tennessee has no personal income tax while Massachusetts does, but forming your LLC in Tennessee won't change that. LLC profits pass through to you and are taxed where you live and operate (in Massachusetts), not where the LLC is registered, so a Tennessee LLC offers no income-tax savings for a Massachusetts-based business. Massachusetts taxes wage and pass-through income at 5.0%, plus a 4% surtax on taxable income above the inflation-adjusted threshold ($1,107,750 for tax year 2026). No separate franchise or excise tax on LLCs taxed as partnerships/disregarded entities, but the mandatory $500 annual report fee is among the highest in the nation. Tennessee imposes a franchise & excise tax on LLCs: $100 minimum franchise tax plus 6.5% excise tax on net earnings.

Privacy & Asset Protection

Neither Massachusetts nor Tennessee offers anonymous LLC formation: both states require owner or manager information on public filings. Tennessee's annual report (a per-member filing) discloses the LLC's members/managers. 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

Massachusetts LLCs file an annual report ($520, due in the anniversary month), and Tennessee LLCs file an annual report (at least $300, due April 1). If you form in Tennessee while operating in Massachusetts, you maintain filings in both states, Tennessee's report plus Massachusetts's equivalent for your foreign registration, and pay a Tennessee registered agent roughly $150 per year. Counting report fees, the agent and any entity-level tax, that brings the Tennessee route to roughly $1,070 a year, versus about $520 to keep a domestic Massachusetts LLC in good standing. The taxes inside those totals: No separate franchise or excise tax on LLCs taxed as partnerships/disregarded entities, but the mandatory $500 annual report fee is among the highest in the nation. Tennessee imposes a franchise & excise tax on LLCs: $100 minimum franchise tax plus 6.5% excise tax on net earnings.

When Tennessee Actually Makes Sense

Forming in Tennessee makes sense in a few specific situations: your business genuinely operates in Tennessee, with a real office, employees, or property there, or you're relocating to Tennessee in the near future, which would also move you out of Massachusetts's personal income tax. For a typical small business based in Massachusetts, none of these usually apply. Registering a Tennessee LLC to do business back home means $500 in Massachusetts foreign-registration fees, on top of Tennessee's $300 minimum formation fee, while Massachusetts's own annual report runs $520 a year and is due in the anniversary month. When in doubt, form where you actually do business.

Frequently Asked Questions

: Tennessee's filing fee is lower (at least $300 vs $520), but that's not the full picture: operating in Massachusetts means also registering as a foreign LLC there ($500) and paying a Tennessee registered agent. Realistic first-year cost is at least $950 for the Tennessee route versus $520 for forming in Massachusetts.
: Yes. Any Massachusetts business can form its LLC in Tennessee. But if the business operates in Massachusetts, it must also register there as a foreign LLC ($500 filing fee) and maintain a registered agent in Tennessee, so you take on two states' fees and filings instead of one.
: Not meaningfully. Both states provide charging-order protection for LLC members, and neither offers a decisive asset-protection edge for a typical small business. Sound insurance and clean separation of business and personal finances matter more in practice.
: It depends on where the business is based. For a Massachusetts-based business, Massachusetts: forming where the business is based keeps costs and compliance simple, and Tennessee is worth considering only if you actually do business there. For a Tennessee-based business, the same reasoning points to Tennessee.
: Speed isn't a basis for choosing between them: neither Massachusetts nor Tennessee publishes a standard processing time, so any figure comparing the two is guesswork. Whichever you pick, remember that forming in Tennessee while operating in Massachusetts means you're not fully set up until the Massachusetts foreign registration is also processed, so the out-of-state route is rarely the faster path end to end. If your timing is genuinely fixed, buy the state's expedite tier rather than relying on a standard turnaround.

Comparison chart of forming an LLC in Massachusetts versus Tennessee, contrasting filing fees, annual report cost and ongoing obligations across 8 factors. — Massachusetts and Tennessee side by side on the factors that decide where to form. Source: MyStateLLC 50-state cost dataset, verified against each Secretary of State's published fee schedule, July 2026.

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More State Comparisons

Massachusetts vs Texas →Massachusetts vs Utah →Massachusetts vs Vermont →Massachusetts vs Delaware →Tennessee vs Delaware →

Massachusetts LLC Guide →Tennessee LLC Guide →

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Sources

Each entry below is a document recorded in our verified sources, and each entry says what the document is. Some statutory text is read from an accurate mirror rather than from the state's own host, and those say so.

sec.state.ma.us/divisions/corporations/filing-by-subject/limited-liability/corporations-limited-liability-company.htmMassachusetts Secretary of the Commonwealth, Corporations Division: business entity filings
sec.state.ma.us/divisions/corporations/download/Fee_Schedule.pdfMassachusetts LLC filing fees
sos.tn.gov/businessesTennessee Secretary of State: business entity filings
sos.tn.gov/businesses/services/business-forms-feesTennessee LLC filing fees

Edmond Hui · Founder, MyStateLLC

Edmond Hui is a software engineer and serial entrepreneur based in New York who has founded multiple online businesses across e-commerce, media, and information publishing. Before transitioning into tech, he spent years as a commercial real estate professional closing deals totaling over 100,000 square feet, giving him firsthand experience with business formation and entity structuring. He built MyStateLLC to provide the free, state-specific LLC guidance he wished existed when forming his own companies.