Tennessee LLC vs South Carolina LLC (2026)
Written for owners based in Tennessee.
Verdict: for most owners, form where the business is based
South Carolina is one and done for a pass-through LLC: $110 for the articles and then no annual report and no annual fee to the Secretary of State. The Department of Revenue is explicit that an LLC not taxed as a corporation escapes both the report and the license fee. Tennessee charges a report every year instead, $50 per member on a $300 minimum, and a $100 franchise tax that follows registration rather than income, so $700 opens and $400 maintains. A South Carolina LLC trading here adds a $300-minimum filing.
Based in South Carolina? Read South Carolina LLC vs Tennessee LLC →
Compare Tennessee LLC vs South Carolina 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
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| Factor | Tennessee | South Carolina |
|---|---|---|
| Filing Fee | $300 | $110 |
| Processing Time | Not published by the state | Not published by the state |
| Annual Report Fee | $300 | None |
| Annual Report Due | April 1 | None required |
| State Income Tax | No | 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 | $300 + registered agent ~$150/yr |
Full fee breakdown for either state: Tennessee LLC cost and South Carolina LLC cost. Owner privacy options for either state: Tennessee anonymous LLC guide and South Carolina anonymous LLC guide.
Business Climate: Tennessee vs South Carolina
| Factor | Tennessee | South Carolina |
|---|---|---|
| 5-year business survival rate | 46.4% (#45 of 51) | 55.9% (#2 of 51) |
| Business application growth (2026 YTD (Jan to Jul) vs 2025 YTD (same months)) | +19.9% YoY (#16 of 51 by volume) | +14.7% YoY (#19 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 South Carolina
Tennessee
South Carolina
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 South Carolina charges $110. South Carolina is $190 cheaper upfront. The cost that usually gets overlooked: if you form in South Carolina but operate in Tennessee, you must also register as a foreign LLC in Tennessee (a $300 minimum filing) and maintain a registered agent in South Carolina (typically around $150 per year). That puts the realistic first-year cost of the South Carolina route at roughly $560, versus at least $300 for simply forming in Tennessee. Speed isn't a basis for choosing between them: neither Tennessee nor South Carolina publishes a standard processing time, so any figure comparing the two is guesswork.
Taxes: Tennessee vs South Carolina
Tennessee has no personal income tax, while South Carolina 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 South Carolina adds no tax advantage. 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 South Carolina offers anonymous LLC formation: both states require owner or manager information on public filings. South Carolina requires managers to be listed on the Articles of Organization when the LLC is 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 South Carolina LLCs file no annual report at all. If you form in South Carolina while operating in Tennessee, you maintain filings in both states, South Carolina asks for no report, but Tennessee still wants its equivalent for your foreign registration, and pay a South Carolina registered agent roughly $150 per year. Counting report fees, the agent and any entity-level tax, that brings the South Carolina 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 South Carolina Actually Makes Sense
Forming in South Carolina makes sense in a few specific situations: your business genuinely operates in South Carolina, with a real office, employees, or property there, or you're relocating to South Carolina in the near future and accept taking on South Carolina's personal income tax, which Tennessee doesn't levy. For a typical small business based in Tennessee, none of these usually apply. Registering a South Carolina LLC to do business back home means at least $300 in Tennessee foreign-registration fees, on top of South Carolina's $110 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.
- sos.tn.gov/businessesTennessee Secretary of State: business entity filings
- sos.tn.gov/businesses/services/business-forms-feesTennessee LLC filing fees
- sos.sc.gov/online-filings/business-entitiesSouth Carolina Secretary of State: business entity filings
- scstatehouse.gov/code/t33c044.phpSouth Carolina 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.