LLC Costs By State: The Complete 2026 Cost Guide

What an LLC actually costs (the honest breakdown)

Every cost article online does one of two things: lists state filing fees in a table and stops, or pads the total with optional upsells until forming an LLC looks like a $1,500 commitment. Neither is the real answer. The realistic year-1 LLC cost is four line items:

1. State filing fee — one-time, $40 (Kentucky) to $500 (Massachusetts). This goes to the Secretary of State, not to a formation service.
2. Registered agent — $0 if you self-appoint and accept a home address on the public record, $39–$200/yr for a commercial service. Most founders pick the latter for privacy and reliability.
3. Annual or biennial report — $0 (Alabama, Arizona) to $300+ (Massachusetts) per year or two. 38 states require one; the others collect equivalent data via tax filings.
4. State franchise tax or LLC tax — most states $0; California $800/yr minimum; Delaware $300/yr; Tennessee $300 minimum; a handful of others. This is the line item that dominates lifetime cost in expensive states.

Add roughly $0–$200 for one-time setup items (Operating Agreement template, certified-copy fees), and that is the year-1 LLC cost. Everything beyond that — formation-service fees, EIN services, expedited processing — is optional.

The cheapest states to form an LLC

Three states are genuinely the cheapest if you actually live and work there: New Mexico, Kentucky, and Arizona. They all have low filing fees, no franchise tax, and either no annual report or a token one.

Wyoming is famous for being cheap, but is actually only the seventh-cheapest in the country once you count annual report fees. What Wyoming is uniquely good at: privacy (no public member list), Series LLC support, and a non-resident-friendly policy. If you live in Wyoming, form there — but the "form your LLC in Wyoming to save taxes" advice you see on Twitter is wrong for anyone with operations in another state. Full Wyoming guide here.

The most expensive states to form an LLC

California — the franchise tax state

California has the cheapest filing fee on this list ($70) and the most expensive ongoing bill of any state. Every California LLC owes the $800 minimum franchise tax every year, due whether your revenue is $0 or $10M. Above $250k in California-sourced revenue, you also owe the California LLC Fee (an additional graduated fee based on revenue, capped at $11,790/yr). The full picture: California LLC guide and cost breakdown.

Massachusetts — the high-everything state

Massachusetts is the most expensive state to form an LLC ($500 filing fee) and one of the most expensive to maintain ($500/yr annual report). Total year-1 realistic cost: $1,225. There is no exit hatch for Massachusetts-based businesses; foreign LLC registration costs roughly the same.

New York — the publication-requirement state

New York's filing fee is reasonable ($200) and its biennial statement is cheap ($9). The killer is the publication requirement: within 120 days of formation, every NY LLC must publish a legal notice in two newspapers (one daily, one weekly) for 6 consecutive weeks, in the county of the LLC's principal office. In Manhattan, that runs $1,500–$2,500. In a cheap upstate county, it runs $250–$400. Many founders use a registered agent in a cheap county specifically to keep publication costs down. Full NY publication walkthrough here.

Nevada — the asset-protection-marketing state

Nevada markets itself as a privacy-and-protection haven but charges accordingly: $425 to file ($75 Articles + $150 list of managers + $200 business license) and $350/yr ongoing in state business license fees. The asset-protection benefits are real but usually only matter for high-net-worth or specific-industry founders. Most people who form in Nevada would have been better served by Wyoming.

Tennessee — the franchise-tax-on-LLCs state

Tennessee is one of the few states besides California to charge an LLC-specific franchise tax — $300 minimum per year, scaling with net worth. Annual report is also $300. Filing fee is $300 ($50 per member, $300 minimum). Year-1 realistic: $725.

Every line item, explained

The state filing fee

A one-time payment to the Secretary of State for processing your Articles of Organization. Ranges from $40 (Kentucky) to $500 (Massachusetts). Online filings are usually cheaper or the same price as paper; some states charge a $5–$50 expedite fee for 1–3 day processing. Full Articles of Organization walkthrough here.

The registered agent fee

Annual, $0 (self-appoint) to $300 (premium brand). The honest market rate is $99–$150/yr. Why most founders pay rather than self-appoint here; full comparison in our registered agent services pillar guide.

The annual report fee

38 states require an annual or biennial report — a one-page filing that confirms your LLC's current address, members, and registered agent. Costs $0 (Alabama, Arizona, Mississippi, Missouri, New Mexico, Ohio, South Carolina) to $300+ (Massachusetts, Tennessee). Missing the report drops your LLC into "not in good standing," which can void liability protection and prevent banking. Set a calendar reminder.

The franchise tax

A handful of states charge an LLC-specific tax on top of the annual report: California ($800/yr minimum), Delaware ($300/yr flat), Tennessee ($300/yr minimum + scaling), Arkansas ($150/yr), Massachusetts (already counted in annual report at $500), and a few others. This is the line item that determines whether an LLC is genuinely cheap or expensive over its lifetime. State tax registration explainer here.

Sales tax permits

If you sell taxable goods or services in a state, you need a sales tax permit there. Cost varies: free (most states), $20 (Wisconsin), up to $150 (some specialty industries). The permit is free in most states, but the ongoing sales-tax filing burden is real — monthly, quarterly, or annual returns depending on volume. Sales-tax software (TaxJar, Avalara) costs $20–$200/mo at scale.

Business licenses

Most U.S. cities require a general business license ($25–$300/yr) for any business operating there. Some industries (food service, contractors, professional services) require additional state or federal licenses. The LLC formation itself never includes business-license registration — it is a separate filing at the city or county level, usually owed within 30 days of starting operations. Full business licenses explainer here.

Optional one-time costs

Operating Agreement template ($0 from free sources, $50–$200 for a state-specific one, $500+ for attorney-drafted). Certified copy of Articles ($10–$30 each — order one for your bank). Federal trademark (~$350/class). EIN service (avoid; the IRS form is free).

Formation service pricing (the part that gets weird)

Formation services market $0 plans aggressively, then upsell during checkout. Here is what each tier actually costs over three years for a single-member LLC, registered agent included.

For specific head-to-heads see: ZenBusiness vs LegalZoom, ZenBusiness vs Northwest, Northwest vs Bizee, Inc Authority vs ZenBusiness, and Swyft Filings vs LegalZoom.

Hidden ongoing costs (the part nobody mentions)

The formation cost is the smallest piece of an LLC's lifetime cost. The real money goes to ongoing items most founders do not budget for in year one.

• Bookkeeping software — $20–$80/mo for QuickBooks Online or Xero. Comparison here.
• Outsourced bookkeeping — $300–$800/mo if you do not want to DIY. Bench vs Pilot here.
• Tax preparation — $300 (DIY software) to $1,500 (CPA for a multi-member partnership return).
• Business insurance — $300–$1,200/yr for general liability; more for professional liability, cyber, or workers comp.
• Payroll software — $40–$200/mo if you take an S-corp election and pay yourself a salary. Gusto, ADP, Justworks are the standard picks.
• Compliance software — $0 for single-state operators; $50–$300/mo for multi-state operators using Harbor Compliance, Mosey, or CSC Global.
• Foreign LLC registration — $100–$500 per state where you have a meaningful business presence outside your home state. Foreign LLC registration explainer here.

A bare-bones single-state, single-member LLC runs $400–$1,000/yr in ongoing costs. A multi-state operator with employees runs $5,000–$15,000/yr. Plan accordingly.

How to minimize your LLC cost without cutting corners

1. Form in your home state. Foreign-LLC registration always costs more than home-state formation; the "tax-friendly state" advice is wrong for anyone with home-state operations.
2. Pay Northwest, not LegalZoom. Same service, $200/yr cheaper in steady state. Three-year savings: $500–$800.
3. Apply for your EIN directly at irs.gov. Free, 15 minutes. Third-party services charge $50–$300 for the same form.
4. Use a free Operating Agreement template for single-member LLCs. Multi-member LLCs with anything unusual should pay an attorney; everyone else can use a state-specific template.
5. File annual reports on time. Late-filing penalties typically double the cost. Set Google Calendar reminders 30 days before the due date.
6. Take the S-corp election when your profit hits ~$80k/yr. The election is free (IRS Form 2553); the SE-tax savings on $100k+ of net profit is $5k–$15k/yr. LLC vs S-corp math here.
7. DIY bookkeeping for the first year if you can. Wave is free; QuickBooks is $20–$80/mo. Outsourced bookkeeping ($300–$800/mo) makes sense once you are losing 5+ hours/month to reconciliation.

Start free — AthenAI bundles formation + RA + EIN + BOI for one flat fee

State-by-state cost snapshot

Full citation-backed breakdowns for every state are at our cost summaries and per-state guides at state-by-state formation guides. Here is the high-level cost ranking:

Frequently asked questions