The Cheapest States to Form an LLC
Ranked on five years of actual state charges — filing fee, recurring report fees, and minimum entity-level taxes — rather than the one-time filing fee everyone quotes.
By Edmond Hui · Fees verified July 29, 2026
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.
The 10 cheapest states over five years
State charges only. Registered-agent service is excluded because it is a commercial product, not a state fee.
| # | State | Filing fee | Per year after | 5-year total |
|---|---|---|---|---|
| 1 | Montana | $35 | $0 | $35 |
| 2 | Arizona | $50 | $0 | $50 |
| 3 | Missouri | $50 | $0 | $50 |
| 4 | Mississippi | $50 | $0 | $50 |
| 5 | New Mexico | $50 | $0 | $50 |
| 6 | Ohio | $99 | $0 | $99 |
| 7 | Idaho | $100 | $0 | $100 |
| 8 | South Carolina | $110 | $0 | $110 |
| 9 | Hawaii | $50 | $12.50 | $112.50 |
| 10 | Iowa | $50 | $15 | $125 |
Where a cheap filing fee is misleading
Ranking states by filing fee and by five-year total produces two different answers. These are the states that move furthest between the two rankings — a positive gap means the state looks cheaper to enter than it is to stay in, and a negative gap means the opposite.
| State | Filing fee | Rank on filing fee | Rank on 5-year cost | Places moved |
|---|---|---|---|---|
| Arkansas $150 Arkansas Franchise Tax | $45 | 3 | 43 | +40 worse |
| Kentucky $175 Limited Liability Entity Tax (LLET) | $40 | 2 | 41 | +39 worse |
| California $800 Annual LLC Tax (minimum franchise tax) | $70 | 13 | 50 | +37 worse |
| Nevada $200 State Business License | $75 | 14 | 45 | +31 worse |
| Minnesota | $155 | 41 | 12 | 29 better |
| Alabama | $200 | 44 | 18 | 26 better |
| Texas | $300 | 49 | 23 | 26 better |
| Maryland | $100 | 20 | 44 | +24 worse |
The 10 lowest filing fees
This is the ranking most comparisons publish. Useful if you only care about the cost of getting started — but check the five-year column before deciding.
Why forming in a cheap state usually costs you more
The saving in these tables is only available to someone who has no home-state nexus. If you live in one state and form in another, you generally have to register the out-of-state LLC as a foreign LLC where you actually operate. At that point you are paying both states' filing fees, filing both states' annual reports, and paying a registered agent in a state where you have no address — roughly $125 a year on its own.
The saving on a filing fee is usually gone inside twelve months. The people for whom out-of-state formation genuinely pays are holding companies with no operations, founders with no fixed base, and non-US founders with no US nexus.
What foreign qualification costs in your state · Best state for your specific situation · Compare two states over five years
States with no annual report at all
7 states require no periodic report to stay in good standing. That removes a recurring deadline as well as a recurring fee — but check the entity-tax column, because a state can drop the report and still charge a minimum tax.
| State | Filing fee | Per year after | Entity-level tax |
|---|---|---|---|
| Alabama | $200 | $0 | None |
| Arizona | $50 | $0 | None |
| Delaware | $110 | $400 | $400 Annual LLC Tax (alternative entity tax) |
| Missouri | $50 | $0 | None |
| New Mexico | $50 | $0 | None |
| Ohio | $99 | $0 | None |
| South Carolina | $110 | $0 | None |
The five most expensive states
| State | Filing fee | Per year after | 5-year total |
|---|---|---|---|
| California | $70 | $810 | $4,120 |
| Massachusetts | $520 | $520 | $3,120 |
| Rhode Island | $150 | $450 | $2,400 |
| Tennessee | $300 | $400 | $2,300 |
| Delaware | $110 | $400 | $2,110 |
Methodology
Every fee was verified on July 29, 2026 against primary sources only — each state's official Secretary of State fee schedule, the governing statute, and where a state-level tax applies, the state revenue or franchise tax authority. No commercial formation-service or blog sources were used, and figures a state does not publish are excluded rather than estimated.
Rankings use the five-year total — filing fee plus five years of recurring charges — because it is both the more honest measure and the one that avoids the question of whether a given state's first report falls in year one or year two. Biennial report fees are annualised by halving. Registered-agent service is excluded from every figure. Ranked states: 50.
Full per-state detail, including paper-filing rates, expedite options, and late penalties, is on each state's own page, linked from every table above and from the 50-state cost table.