Tennessee LLC vs Arizona LLC (2026)
Written for owners based in Tennessee.
Verdict: for most owners, form where the business is based
Arizona charges $50 to file with its Corporation Commission and then nothing annually, no report and no franchise tax. That $50 is not the whole first year: Arizona law makes an LLC whose statutory agent sits outside Maricopa or Pima County publish notice three times in a county newspaper, and Arizona publishes no price for it. Tennessee's floor is $700 to open and $400 a year, because the report is $50 per member with a $300 minimum and the franchise tax adds $100. Trading here means a Tennessee registration from $300.
Based in Arizona? Read Arizona LLC vs Tennessee LLC →
Compare Tennessee LLC vs Arizona 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: October 5, 2026
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| Factor | Tennessee | Arizona |
|---|---|---|
| Filing Fee | $300 | $50 |
| Processing Time | Not published by the state | Live queue, not fixed |
| Annual Report Fee | $300 | None |
| Annual Report Due | April 1 | None required |
| State Income Tax | No | Yes |
| Anonymous LLC | No | No |
| Publication Requirement | No | Yes (Commission posts it free in Maricopa & Pima counties) |
| Foreign LLC Cost (if forming out-of-state) | N/A, you're in your home state | $300 + registered agent ~$150/yr |
Full fee breakdown for either state: Tennessee LLC cost and Arizona LLC cost. Owner privacy options for either state: Tennessee anonymous LLC guide and Arizona anonymous LLC guide.
Business Climate: Tennessee vs Arizona
| Factor | Tennessee | Arizona |
|---|---|---|
| 5-year business survival rate | 46.4% (#45 of 51) | 52.1% (#22 of 51) |
| Business application growth (2026 YTD (Jan to Jul) vs 2025 YTD (same months)) | +19.9% YoY (#16 of 51 by volume) | +23.9% YoY (#13 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: Tennessee vs Arizona
Tennessee
Arizona
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
Tennessee charges at least $300 to form an LLC, while Arizona charges $50. Arizona is $250 cheaper upfront. The cost that usually gets overlooked: if you form in Arizona but operate in Tennessee, you must also register as a foreign LLC in Tennessee (a $300 minimum filing) and maintain a registered agent in Arizona (typically around $150 per year). That puts the realistic first-year cost of the Arizona route at roughly $500, versus at least $300 for simply forming in Tennessee. Speed isn't a basis for choosing between them: neither Tennessee nor Arizona publishes a standard processing time, so any figure comparing the two is guesswork. Note that Arizona also requires the formation notice to be published within 60 days after the Commission files the Articles. If the statutory agent's street address is in a county of more than 800,000 people (currently Maricopa and Pima), the Corporation Commission posts the notice in its own database instead, free of charge. Everywhere else, the notice must run three consecutive times in a newspaper in that county, at a rate the newspaper sets (the state publishes no cost figure), which adds to the true formation cost.
Taxes: Tennessee vs Arizona
Tennessee has no personal income tax, while Arizona taxes individual income. Since pass-through LLC profits are taxed where you live and operate, a Tennessee-based owner keeps Tennessee's no-income-tax benefit either way. Forming in Arizona adds no tax advantage. Arizona levies a personal income tax (flat 2.5%). Tennessee imposes a franchise & excise tax on LLCs: $100 minimum franchise tax plus 6.5% excise tax on net earnings.
Privacy & Asset Protection
Neither Tennessee nor Arizona offers anonymous LLC formation: both states require owner or manager information on public filings. The Articles of Organization must list members (member-managed) or managers (manager-managed), a public record. 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
Tennessee LLCs file an annual report (at least $300, due April 1), and Arizona LLCs file no annual report at all. If you form in Arizona while operating in Tennessee, you maintain filings in both states, Arizona asks for no report, but Tennessee still wants its equivalent for your foreign registration, and pay an Arizona registered agent roughly $150 per year. Counting report fees, the agent and any entity-level tax, that brings the Arizona route to roughly $450 a year, versus at least $400 to keep a domestic Tennessee LLC in good standing. The tax inside those totals: Tennessee imposes a franchise & excise tax on LLCs: $100 minimum franchise tax plus 6.5% excise tax on net earnings.
When Arizona Actually Makes Sense
Forming in Arizona makes sense in a few specific situations: your business genuinely operates in Arizona, with a real office, employees, or property there, or you're relocating to Arizona in the near future and accept taking on Arizona's personal income tax, which Tennessee doesn't levy. For a typical small business based in Tennessee, none of these usually apply. Registering an Arizona LLC to do business back home means at least $300 in Tennessee foreign-registration fees, on top of Arizona's $50 formation fee, while Tennessee's own annual report runs at least $300 a year and is due April 1. When in doubt, form where you actually do business.
Frequently Asked Questions
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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. Where we hold the citation but no stable public link, the citation is printed on its own rather than pointed at a guessed address.
- Arizona statute: A.R.S. 29-3201(G) (newspaper publication of formation)
- sos.tn.gov/businessesTennessee Secretary of State: business entity filings
- sos.tn.gov/businesses/services/business-forms-feesTennessee LLC filing fees
- azcc.gov/corporationsArizona Corporation Commission: business entity filings
- azcc.gov/docs/default-source/corps-files/fee-schedules/fee-schedule-llcs.pdfArizona 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.