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

Vermont's filing fee is lower ($155 vs at least $300), but that's not the full picture: operating in Tennessee means also registering as a foreign LLC there ($300) and paying a Vermont registered agent. Realistic first-year cost is roughly $605 for the Vermont route versus at least $300 for forming in Tennessee.

Can I form my Tennessee business in Vermont?

Yes. Any Tennessee business can form its LLC in Vermont. But if the business operates in Tennessee, it must also register there as a foreign LLC ($300 minimum filing fee) and maintain a registered agent in Vermont, so you take on two states' fees and filings instead of one.

Does Vermont have better asset protection than Tennessee?

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

Tennessee LLC vs Vermont LLC (2026)

Written for owners based in Tennessee.

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

Vermont and Tennessee both tie the annual report to the fiscal year rather than a formation anniversary, Vermont three months after year end and Tennessee on the first day of the fourth month. There the similarity stops. Vermont's $45 report sits beside a $250 minimum entity tax that a partnership-taxed LLC owes and a single-member disregarded LLC does not, while Tennessee's $100 franchise minimum reaches every registered LLC. Year one is $200 in Vermont against $700 here, and the Tennessee report starts at $300, rising $50 per member. The Tennessee certificate of authority is a further $300 at least.

Based in Vermont? Read Vermont LLC vs Tennessee LLC →

Compare Tennessee LLC vs Vermont 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

If your business is based in Tennessee, a Tennessee LLC needs no foreign registration there; a Vermont LLC run from Tennessee generally must also register in Tennessee as a foreign LLC (a filing fee of at least $300). If your business is based in Vermont, a Vermont LLC needs no foreign registration there; a Tennessee LLC run from Vermont generally must also register in Vermont as a foreign LLC (Vermont's $155 filing fee). An LLC formed in one of these states and run from the other owes whatever filings, fees and taxes each state requires. A Tennessee LLC runs from $700 in year one and from $400/yr after; a Vermont LLC runs $200 and $45/yr. See the full breakdown below.

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Factor	Tennessee	Vermont
Filing Fee	$300	$155
Processing Time	Not published by the state	Under 1 business day online; 7 to 10 by mail
Annual Report Fee	$300	$45
Annual Report Due	April 1	Within 3 months of fiscal year end
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 Vermont LLC cost. Owner privacy options for either state: Tennessee anonymous LLC guide and Vermont anonymous LLC guide.

Business Climate: Tennessee vs Vermont

Factor	Tennessee	Vermont
5-year business survival rate	46.4% (#45 of 51)	46.6% (#44 of 51)
Business application growth (2026 YTD (Jan to Jul) vs 2025 YTD (same months))	+19.9% YoY (#16 of 51 by volume)	+15.4% YoY (#51 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: Tennessee vs Vermont

State A

State B

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

Vermont

✓ Cheaper Upfront✓ Cheaper Long-Term

Formation fee$155

Annual report fee$45

State entity taxNone

Report dueWithin 3 months of fiscal year end

Processing timeUnder 1 business day online; 7 to 10 by mail

Late penalty$0

Total Cost

Tennessee

Vermont

1 Year

from $700

$200

3 Years

from $1,500

$290

5 Years

from $2,300

$380

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

Tennessee charges at least $300 to form an LLC, while Vermont charges $155. Vermont is $145 cheaper upfront. The cost that usually gets overlooked: if you form in Vermont but operate in Tennessee, you must also register as a foreign LLC in Tennessee (a $300 minimum filing) and maintain a registered agent in Vermont (typically around $150 per year). That puts the realistic first-year cost of the Vermont route at roughly $605, versus at least $300 for simply forming in Tennessee. Only one side of this comparison is knowable: Vermont publishes a standard turnaround (under 1 business day online; 7 to 10 by mail), while Tennessee publishes no standard processing time, so the two can't be ranked against each other on speed.

Taxes: Tennessee vs Vermont

Tennessee has no personal income tax, while Vermont 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 Vermont 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 Vermont offers anonymous LLC formation: both states require owner or manager information on public filings. Vermont's annual report must state only the company name, designated office and registered agent, and the articles and foreign application make owner or principal names optional, but the Secretary of State treats up-to-date principal personnel as part of good standing and its public business record displays the principals on file, so whether an LLC can keep member and manager names off its filings in practice isn't confirmed. 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 Vermont LLCs file an annual report ($45, due within 3 months of fiscal year end). If you form in Vermont while operating in Tennessee, you maintain filings in both states, Vermont's report plus Tennessee's equivalent for your foreign registration, and pay a Vermont registered agent roughly $150 per year. Counting report fees, the agent and any entity-level tax, that brings the Vermont route to roughly $495 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 Vermont Actually Makes Sense

Forming in Vermont makes sense in a few specific situations: your business genuinely operates in Vermont, with a real office, employees, or property there, or you're relocating to Vermont in the near future and accept taking on Vermont's personal income tax, which Tennessee doesn't levy. For a typical small business based in Tennessee, none of these usually apply. Registering a Vermont LLC to do business back home means at least $300 in Tennessee foreign-registration fees, on top of Vermont's $155 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

: Vermont's filing fee is lower ($155 vs at least $300), but that's not the full picture: operating in Tennessee means also registering as a foreign LLC there ($300) and paying a Vermont registered agent. Realistic first-year cost is roughly $605 for the Vermont route versus at least $300 for forming in Tennessee.
: Yes. Any Tennessee business can form its LLC in Vermont. But if the business operates in Tennessee, it must also register there as a foreign LLC ($300 minimum filing fee) and maintain a registered agent in Vermont, 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 Tennessee-based business, Tennessee: forming where the business is based keeps costs and compliance simple, and Vermont is worth considering only if you actually do business there. For a Vermont-based business, the same reasoning points to Vermont.
: Only one side of this comparison is knowable: Vermont publishes a standard turnaround (under 1 business day online; 7 to 10 by mail), while Tennessee publishes no standard processing time, so the two can't be ranked against each other on speed. Whichever you pick, remember that forming in Vermont while operating in Tennessee means you're not fully set up until the Tennessee 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 Tennessee versus Vermont, contrasting filing fees, annual report cost and ongoing obligations across 8 factors. — Tennessee and Vermont 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

Tennessee vs Virginia →Tennessee vs Washington →Tennessee vs West Virginia →Tennessee vs Delaware →Vermont vs Delaware →

Tennessee LLC Guide →Vermont 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. Where we hold the citation but no stable public link, the citation is printed on its own rather than pointed at a guessed address.

Vermont statute: 11 V.S.A. § 4033(a) (annual report contents)
Vermont statute: § 4023(b)(2), § 4112(b)(2) (optional principal names)
sos.tn.gov/businessesTennessee Secretary of State: business entity filings
sos.tn.gov/businesses/services/business-forms-feesTennessee LLC filing fees
sos.vermont.gov/business-services/business-filings/domestic-formation/llcVermont Secretary of State: business entity filings
sos.vermont.gov/business-services/fees-statutesVermont 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.