What is the cheapest state to form an LLC?

Montana has the lowest formation fee at $35, followed by Kentucky at $40. Several states — including Arizona, Missouri, New Mexico, Ohio, and South Carolina — charge no annual report fee, making them the lowest ongoing-cost options. However, if you live and operate in a different state, you'll need to register as a foreign LLC there, which typically costs as much as forming a new LLC.

Do I have to form my LLC in the state where I live?

No, but it's usually the most practical choice. If you form your LLC in State A but operate in State B, you'll likely need to register as a foreign LLC in State B — paying formation and annual fees in both states. Unless you have a specific legal or operational reason to form elsewhere, forming in your home state is simpler and cheaper.

Is it worth forming an LLC in Delaware or Wyoming?

For most small businesses, no. Delaware's Court of Chancery and flexible corporate law are valuable for venture-backed startups and large companies — not a solo consulting LLC. Wyoming's charging order protections are strong, but only matter if you're protecting significant assets. For everyday small businesses, the added cost of foreign registration in your home state typically outweighs the benefits.

What's the difference between a formation fee and an annual report fee?

The formation fee is a one-time cost paid when you create the LLC. The annual report fee (also called a franchise tax or renewal fee in some states) is a recurring cost paid each year to keep the LLC in good standing. Some states call it a Statement of Information or Biennial Report and charge it every two years.

Why do some states have no annual report fee?

A handful of states — Arizona, Missouri, New Mexico, Ohio, and (for default-taxed LLCs) South Carolina and Alabama — do not require LLCs to file annual reports at all. Others, like Idaho, Minnesota, and Mississippi, require a report but charge nothing for it. These states generate LLC revenue primarily from the upfront formation fee. It's not a loophole; it's just how those states designed their LLC statutes.

How often do annual report fees change?

State legislatures can raise fees at any time, but major changes are infrequent. The fees in this calculator reflect current published rates. Always verify the current fee on your state's Secretary of State website before filing.

Free Tool

LLC Cost Comparison Calculator

Compare formation fees and total annual costs for any two states — side by side. See 1-year, 3-year, and 5-year cost breakdowns for all 50 states.

State A

State B

Delaware

Formation fee$110

Annual report feeNo report required

State entity tax$400/yr — Annual LLC Tax (alternative entity tax)

Report dueNone required

Processing timeNot published by the state

Late penaltyN/A

Small businesses (market size)111,346 (98.7% of all businesses)

Wyoming

✓ Cheaper Upfront✓ Cheaper Long-Term

Formation fee$100

Annual report fee$60

State entity taxNone

Report dueFirst day of anniversary month

Processing timeInstant online; up to 15 business days paper

Late penalty$0

Small businesses (market size)81,924 (98.9% of all businesses)

Total Cost

Delaware

Wyoming

1 Year

$510

$160

3 Years

$1,310

$280

5 Years

$2,110

$400

Small business counts: SBA Office of Advocacy, 2025 State Profiles

Will you operate outside your home state?

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, and a one-time publication cost where a state requires publication. 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. Montana's annual report is free when filed by April 15 and $35 after, a waiver the Secretary of State applies at its discretion. 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.

LLC filing fees and annual costs by state: why it matters

Where you form your LLC affects your startup cost, annual compliance fees, and sometimes your tax obligations. Most small businesses should simply form in the state where they operate — forming in a different state means you'll likely need to register as a foreign LLC in your home state anyway, paying fees in both states. However, if you're choosing between states where you genuinely operate, or managing a multi-state business, the cost differences can be significant.

Formation fees range from $35 (Montana) to $520 (Massachusetts) for a standard LLC filing. New York adds a mandatory newspaper publication on top of its $200 filing fee — the defensible floor is about $250 including the $50 Certificate of Publication, and no county-clerk-designated New York City newspaper publishes a rate card, so the widely repeated four-figure NYC estimates cannot be sourced
11 states cost nothing per year to keep an LLC in good standing (Alabama, Arizona, Idaho, Minnesota, Mississippi, Missouri, Montana, New Mexico, Ohio, South Carolina, Texas) — though several still require the filing itself
States like Delaware and Wyoming are popular for their legal protections, but require foreign registration in your home state — adding cost. Delaware also owes a flat $400 annual tax despite filing no annual report
Biennial states (Alaska, California, Indiana, Iowa, Kansas, Nebraska, New York) charge every two years, not annually

The stakes are real: per U.S. Bureau of Labor Statistics Business Employment Dynamics data, 77.9% of new private-sector establishments survive their first year, but only 51.4% are still operating after five years — which is exactly why this calculator shows 5-year totals, not just the upfront filing fee (source, retrieved 2026-07-16).

See the full state-by-state breakdown in our Business Survival Rates by State report.

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How to compare LLC costs between two states

1️⃣ Pick two states

Select any two states from the dropdowns to compare them side by side.

💰 See upfront costs

The formation fee is the one-time state filing fee to create your LLC.

📅 Check ongoing costs

Annual report fees repeat every year (or every 2 years in biennial states). 6 states have no annual report at all.

📊 Compare 5-year totals

The cost table shows 1, 3, and 5-year totals so you can spot long-term savings.

Frequently Asked Questions

: Montana has the lowest formation fee at $35, followed by Kentucky at $40. Several states — including Arizona, Missouri, New Mexico, Ohio, and South Carolina — charge no annual report fee, making them the lowest ongoing-cost options. However, if you live and operate in a different state, you'll need to register as a foreign LLC there, which typically costs as much as forming a new LLC.
: No, but it's usually the most practical choice. If you form your LLC in State A but operate in State B, you'll likely need to register as a foreign LLC in State B — paying formation and annual fees in both states. Unless you have a specific legal or operational reason to form elsewhere, forming in your home state is simpler and cheaper.
: For most small businesses, no. Delaware's Court of Chancery and flexible corporate law are valuable for venture-backed startups and large companies — not a solo consulting LLC. Wyoming's charging order protections are strong, but only matter if you're protecting significant assets. For everyday small businesses, the added cost of foreign registration in your home state typically outweighs the benefits.
: The formation fee is a one-time cost paid when you create the LLC. The annual report fee (also called a franchise tax or renewal fee in some states) is a recurring cost paid each year to keep the LLC in good standing. Some states call it a Statement of Information or Biennial Report and charge it every two years.
: A handful of states — Arizona, Missouri, New Mexico, Ohio, and (for default-taxed LLCs) South Carolina and Alabama — do not require LLCs to file annual reports at all. Others, like Idaho, Minnesota, and Mississippi, require a report but charge nothing for it. These states generate LLC revenue primarily from the upfront formation fee. It's not a loophole; it's just how those states designed their LLC statutes.
: State legislatures can raise fees at any time, but major changes are infrequent. The fees in this calculator reflect current published rates. Always verify the current fee on your state's Secretary of State website before filing.

LLC filing fees and annual costs by state: why it matters

How to compare LLC costs between two states

Frequently Asked Questions

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