What does an LLC really cost?

TL;DR

Forming an LLC in 2026 costs $35-$500 to file, plus an annual or biennial report fee in 43 states (median $50/yr) and a franchise tax in a handful of high-cost states (CA $800/yr, DE $300/yr, TN $300/yr, MA $500/yr). Year-one total ranges from $35 (Montana DIY) to ~$2,200 (New York with publication). Most founders end up at $200-$500 in year one and $50-$200/year ongoing. The home-state vs Wyoming/Delaware question almost always answers itself: form where you operate, because foreign qualification fees ($100-$750/state) eat any “tax savings” from forming in a low-cost state if you have nexus elsewhere. The exception is true non-residents (no US presence) and VC-track companies that need Delaware for the Court of Chancery. Everything below is sourced from each state’s Secretary of State and the IRS — links on every figure.

All 50 states + DC: filing fees & annual reports (2026)

The table below shows the LLC formation cost for every US jurisdiction. Data verified 2026-04-25 directly from each state’s Secretary of State website. Filing fee is one-time at formation. Annual fee is the recurring report or franchise fee — bold rows have a state-specific franchise tax above the report fee.

State	Filing Fee	Annual / Recurring	Cadence	5-Yr Total
Alabama	$200	$50	annual	$400
Alaska	$250	$100	biennial	$450
Arizona	$50	$0	none	$50
Arkansas	$45	$150	annual franchise	$645
California	$70	$800 + $20 biennial	annual franchise	$4,070
Colorado	$50	$25	annual	$150
Connecticut	$120	$80	annual	$440
Delaware	$90	$300	annual franchise	$1,290
District of Columbia	$99	$300	biennial	$849
Florida	$125	$138.75	annual	$680
Georgia	$100	$50 + $10-$5,000 NWT	annual	$300+
Hawaii	$50	$15	annual	$110
Idaho	$100	$0	annual info	$100
Illinois	$150	$75	annual	$450
Indiana	$100	$30	biennial	$190
Iowa	$50	$60	biennial	$170
Kansas	$160	$50	annual	$360
Kentucky	$40	$15	annual	$100
Louisiana	$100	$35	annual	$240
Maine	$175	$85	annual	$510
Maryland	$100	$300	annual	$1,300
Massachusetts	$500	$500	annual	$2,500
Michigan	$50	$25	annual	$150
Minnesota	$155	$0	annual info	$155
Mississippi	$50	$0	annual info	$50
Missouri	$50	$0	none	$50
Montana	$35	$20	annual	$115
Nebraska	$100	$13	biennial	$126
Nevada	$425	$350	annual	$1,825
New Hampshire	$100	$100	annual	$500
New Jersey	$125	$75	annual	$425
New Mexico	$50	$0	none	$50
New York	$200	$9 biennial + filing fee	biennial	$1,400+ pub
North Carolina	$125	$202	annual	$933
North Dakota	$135	$50	annual	$335
Ohio	$99	$0	none	$99
Oklahoma	$100	$25	annual	$200
Oregon	$100	$100	annual	$500
Pennsylvania	$125	$7/yr ($70/decennial)	decennial	$160
Rhode Island	$150	$50	annual	$350
South Carolina	$110	$0	none	$110
South Dakota	$150	$50	annual	$350
Tennessee	$300	$300 + 0.25% net worth	annual	$1,500+
Texas	$300	$0 (under $1.23M rev)	annual filing	$300
Utah	$54	$18	annual	$126
Vermont	$125	$35	annual	$265
Virginia	$100	$50	annual	$300
Washington	$200	$60	annual	$440
West Virginia	$100	$25	annual	$200
Wisconsin	$130	$25	annual	$230
Wyoming	$100	$60	annual	$340

Sources for every row: each state’s Secretary of State website, last verified 2026-04-25. The full citation list and underlying CSV dataset are published openly.

What an LLC actually costs: the 6 components

LLC cost is a stack, not a single fee. Every formation involves up to six line items.

1. State filing fee (one-time)

The fee charged by the Secretary of State to register the Articles of Organization. Range: $35 (Montana) to $500 (Massachusetts). This is unavoidable — you can’t form an LLC without paying it. The filing fee is paid once at formation and never again unless you dissolve and re-form.

There’s no quality difference between a $35 LLC and a $500 LLC. The legal protection is identical. The fee disparity reflects state legislative choices about how to fund the SOS office, not anything substantive about the LLC.

2. Annual or biennial report fee (recurring)

43 states + DC require an annual or biennial information report to keep the LLC in good standing. The report typically lists: registered agent, principal office address, member or manager names (some states), and confirms the LLC is still active.

Range: $0 (Arizona, Missouri, New Mexico, Ohio, South Carolina, Texas under threshold, Mississippi) to $500 (Massachusetts). Median across all states: $50/yr.

Cadence variants:

• Annual — most states. Due on a fixed date or the LLC’s anniversary month.
• Biennial — California, New York, Iowa, Indiana, Nebraska, Alaska, DC. Due every 2 years.
• Decennial — Pennsylvania only. $70 every 10 years (years ending in 1).

Missing the report fee triggers $25-$400 in late penalties and eventually administrative dissolution after 60-180 days.

3. Franchise tax (state-specific, recurring)

A handful of states impose an entity-level tax separate from the income tax their owners pay. This is the line item that ruins California-vs-Wyoming math for most people. The 2026 franchise-tax states for LLCs:

• California — $800/yr minimum, payable to the Franchise Tax Board. Plus a gross receipts fee of $900-$11,790 for LLCs with CA-source income above $250K.
• Delaware — $300/yr flat for LLCs, payable to Delaware Division of Corporations.
• Tennessee — $300/yr minimum + 0.25% of apportioned net worth, Tennessee Department of Revenue.
• Alabama — $50/yr minimum Business Privilege Tax, Alabama Department of Revenue.
• Texas — 0.375%-0.75% margin tax above $1.23M revenue threshold (most small LLCs owe $0), Texas Comptroller.
• New York — annual LLC filing fee tied to gross income, $25-$4,500 sliding, NY Department of Taxation and Finance. Single-member LLCs treated as disregarded entities are exempt.
• Arkansas — $150/yr franchise tax, Arkansas SOS Franchise Tax page.
• Oklahoma — franchise tax repealed for LLCs in 2024.
• Georgia — Net Worth Tax $10-$5,000 sliding for LLCs filing as corporations.

Most states do not have a franchise tax. The list above covers the high-impact cases.

4. Registered agent service fee (recurring, optional)

Every state requires the LLC to designate a registered agent — a person or service with a physical street address (no PO boxes) in the formation state, available during business hours to receive service of process and official mail. You can be your own RA at $0 if you live in the formation state and don’t mind your home address being public. Otherwise:

• Northwest Registered Agent — $125/yr (northwestregisteredagent.com)
• ZenBusiness — $199/yr (often bundled with formation packages)
• LegalZoom — $249/yr
• Wyoming-specific budget agents — $50-$80/yr (only available in WY)

The differentiator is mostly customer support, document storage, and how aggressively the service upsells additional products. Functionally, all RAs do the same thing: receive your mail, scan it, forward to you.

5. Operating agreement (one-time, optional in most states)

A written contract among members defining management, ownership, profit/loss allocation, and dissolution procedures. Five states legally require it: California, Delaware, Maine, Missouri, New York. The other 45 states do not require one, but most banks require an operating agreement to open a business bank account.

Cost tiers:

• Free SBA template or state-bar form — $0
• Online template (LegalNature, Rocket Lawyer, Bonsai) — $39-$99
• Attorney-drafted, single-member — $400-$800
• Attorney-drafted, multi-member with profit/loss allocations — $800-$1,500

For a single-member LLC with no investors, the free template is usually enough. For multi-member or anything with a buy-sell provision, attorney review is worth $400-$800 because the default state law (the LLC Act) often gives equal management and equal profit splits regardless of capital contribution — which is rarely what founders intended.

6. Publication or notice cost (state-specific, one-time)

Three states require newspaper publication of formation notice:

• New York — Publish in 2 newspapers (one daily, one weekly) for 6 weeks in the formation county. $1,200-$2,000 in Manhattan, $200-$500 in upstate counties. Plus $50 Certificate of Publication. Source: dos.ny.gov LLC publication FAQ.
• Arizona — 3 weeks in 1 newspaper, $30-$300. Exempt in Maricopa and Pima counties (the AZCC publishes automatically).
• Nebraska — 3 weeks in 1 newspaper, $40-$200.

Publication is genuinely an extra $200-$2,000 cost in NY, AZ-outside-Maricopa, and NE. We surface it on every state page rather than burying it.

The cheapest states to form an LLC

Sorted by 5-year total cost of ownership (filing + 5 years of ongoing fees, no add-ons), the cheapest states are:

1. Mississippi — $50 filing + $0/yr = $50 over 5 years
2. Missouri — $50 + $0 = $50
3. New Mexico — $50 + $0 = $50
4. Ohio — $99 + $0 = $99
5. South Carolina — $110 + $0 = $110
6. Montana — $35 + $20/yr = $115
7. Hawaii — $50 + $15/yr = $110
8. Kentucky — $40 + $15/yr = $100
9. Utah — $54 + $18/yr = $126
10. Nebraska — $100 + $13 biennial = $126
11. Pennsylvania — $125 + ~$7/yr (decennial $70/10) = $160

The catch: filing-fee math only matters if you live and operate in that state. If you’re in California earning $80K and form a Mississippi LLC, you owe California’s $800 franchise tax + $70 foreign qualification fee anyway — the Mississippi $50 saves you nothing. See the home-state vs Wyoming/Delaware myth section below.

The most expensive states

Sorted by 5-year total cost of ownership:

1. California — $4,070 ($70 filing + $800/yr franchise tax + $20 biennial)
2. Massachusetts — $2,500 ($500 + $500/yr)
3. Nevada — $1,825 ($425 + $350/yr)
4. Tennessee — $1,500+ ($300 + $300/yr base, plus net worth tax)
5. Maryland — $1,300 ($100 + $300/yr)
6. Delaware — $1,290 ($90 + $300/yr franchise tax)
7. DC — $849 ($99 + $300 biennial)
8. Maine — $510 ($175 + $85/yr)

The cluster at the top — California, Massachusetts, Nevada, Tennessee — share a pattern: the state government uses the LLC fee as a steady revenue source rather than a service-cost recovery. California is the worst-of-both: cheap formation fee ($70) signals the state wants formations, then $800/yr franchise tax extracts the revenue. Founders forming “in” California to “stay simple” are usually shocked by year 2 when the FTB bill arrives.

The home-state vs Wyoming/Delaware myth

Here’s the math nobody on TikTok shows you. The pitch goes: “Form your LLC in Wyoming or Delaware to save on taxes!” The reality:

Where you do business matters more than where you form. State tax authorities use a concept called nexus — substantial connection to the state. If you have nexus (offices, employees, substantial sales) in California, you owe California taxes regardless of formation state. The same is true for every state with a franchise tax.

Foreign qualification eats the savings. Operating in a state where you’re not formed requires “foreign qualification” — basically registering your out-of-state LLC with the new state’s SOS. Foreign qualification fees: $100-$750 per state, plus that state’s annual report fee for foreign LLCs (often higher than for domestic LLCs).

The break-even math. If you live in California and form a Wyoming LLC for “$60/yr savings”:

Cost line	California-formed LLC	Wyoming-formed LLC operating in CA
Year 1 formation fee	$70 (CA SOS)	$100 (WY SOS) + $70 (CA foreign qualification)
Year 1 RA service	$120 (DIY $0 if you live there)	$125 (must hire WY RA)
Year 1 franchise tax	$800 (CA FTB)	$800 (CA FTB — applies because you operate in CA)
Year 1 total	$990	$1,095
Year 2+ ongoing	$820/yr	$945/yr ($800 CA + $60 WY + $125 RA)

The Wyoming LLC costs more, not less, because you pay both states. Source: California Franchise Tax Board guidance on doing business in California, last verified 2026-04-25.

When forming in Wyoming or Delaware actually makes sense. Two cases:

1. You don’t have nexus in any other state. Non-US residents with no US offices, employees, or substantial physical presence. Wyoming’s $100 + $60/yr is genuinely cheap because there’s no second state to pay.
2. You’re VC-track and need Delaware C-corp. Institutional VCs typically require Delaware C-corp for the Court of Chancery’s predictable corporate law. This is a legal-structure decision, not a cost-savings one — and it applies to C-corps, not LLCs.

For everyone else, form where you live. It’s cheaper, simpler, and avoids dual-state compliance overhead. The Delaware/Wyoming/Nevada formation pitch is a marketing artifact from the 1990s before nexus rules tightened.

Single-member vs multi-member: tax classification, not cost

Member count does not change the state filing fee in any of the 50 states. The fee is flat per LLC. Where it does matter is at the IRS:

• Single-member LLC — IRS default: “disregarded entity.” Profits flow to the owner’s Schedule C on Form 1040. No separate tax return. Source: IRS LLC overview.
• Multi-member LLC — IRS default: “partnership.” Files Form 1065 and issues K-1s to each member. CPA fee for partnership return: typically $300-$800/yr. Source: IRS Form 8832 instructions.
• Either can elect S-corp treatment via Form 2553. Worth it above ~$80,000 net SE income (see next section).

The SE-tax question is independent of state choice. If you’re solo and net earnings exceed about $80K, the S-corp election usually saves $2,000-$4,000/yr on the 15.3% self-employment tax — at the cost of running payroll ($1,200-$2,400/yr) and a higher CPA bill. Below $80K, default LLC taxation is usually cheaper.

LLC vs S-corp election: when it saves money

The S-corp election (federal Form 2553) splits your income into two buckets:

1. Reasonable salary — paid to you as W-2 wages, subject to 15.3% FICA (employer + employee combined).
2. Distribution — paid to you as profit, NOT subject to SE tax.

The savings come from the distribution portion. But you have to pay yourself a “reasonable salary” — the IRS won’t let you W-2 yourself $10K and call $200K a distribution. Reasonable typically means 40-60% of net SE income, varying by industry.

Break-even math at ~$80,000 net SE income:

• Default LLC taxation: $80K × 15.3% SE tax = $12,240
• S-corp election with $50K reasonable salary: SE tax on salary only = $7,650; distribution of $30K saves $4,590
• Net savings = $4,590 - $1,500 payroll service - $500 extra CPA = ~$2,590/yr
• Source: IRS Form 2553 page + SSA 2026 wage base.

Below $80K, the payroll-service and CPA overhead usually eat the savings. Above $80K, the math typically favors S-corp. State-level: a few states (CA, NY, IL) impose extra S-corp-specific state taxes on top of federal — verify with your state Department of Revenue before electing.

S-corp is a federal election. Your state LLC filing is unchanged. The election deadline is the 15th day of the 3rd month of the tax year you want it to apply (March 15 for calendar-year LLCs).

Hidden LLC costs founders don’t see coming

The state filing fee is the visible cost. The 12 hidden costs that catch first-time founders:

1. NY publication — $1,200-$2,000 in Manhattan, $200-$500 upstate. dos.ny.gov
2. AZ publication — $30-$300, exempt Maricopa/Pima. azcc.gov
3. NE publication — $40-$200. sos.nebraska.gov
4. City business license — $25-$500/yr. Required almost everywhere. Cite your city or county clerk.
5. Sales tax permit — usually free, sometimes $50. Required in any state where you sell taxable goods.
6. Workers comp insurance — required in 49 states (TX is the exception). Premiums vary by payroll and industry. Source: NCCI state pages.
7. DBA / fictitious business name filing — $10-$100 if you operate under a name different from the LLC’s legal name.
8. Bank account opening fee — $0-$25, often waived. Some banks charge for the initial signing visit.
9. BOI compliance service — $99-$200/yr if you don’t self-file. FinCEN Beneficial Ownership Information is required under the Corporate Transparency Act. fincen.gov/boi.
10. State payroll tax registration — $0-$50 per state where you have employees.
11. Foreign qualification per outside state — $100-$750 + that state’s annual report. Stacks fast for multi-state operations.
12. Late annual report penalty — $25-$400 per state. Adds up if you forget the deadline.

For a typical solo founder in a single state, hidden costs add $100-$500 in year 1. For a multi-state operation, $1,000-$5,000 is realistic.

5-year cost of ownership: the calculation that matters

Most founders fixate on the filing fee and ignore the recurring cost. Year-1 cost is misleading. The 5-year total tells you what the LLC actually costs:

Cheapest 5-year total (DIY, no add-ons):

• Mississippi: $50
• Missouri: $50
• New Mexico: $50
• Ohio: $99
• Montana: $115

Most expensive 5-year total (DIY, no add-ons):

• California: $4,070
• Massachusetts: $2,500
• Nevada: $1,825
• Tennessee: $1,500+
• Maryland: $1,300

The 80x range between cheapest and most expensive is real and largely driven by state franchise tax policy. California’s $800/yr franchise tax alone outweighs the entire 5-year cost of any non-California LLC.

If you can choose where to live and form, the math is simple: avoid California, Massachusetts, Nevada, Tennessee, and Maryland for solo LLCs. If you live in those states and operate there, you can’t avoid the franchise tax via Wyoming-formation tricks — see the home-state-vs-Wyoming section above.

State-by-state programmatic pages (top 17 by demand)

For 17 states, we publish dedicated pages with full filing breakdowns, step-by-step DIY instructions, state-specific quirks, and 4 page-unique FAQs. Direct links:

• California LLC cost: $70 + $800 franchise tax — most-expensive state, $4,070 over 5 years
• Texas LLC cost: $300 + $0 — high formation fee, no annual maintenance
• Florida LLC cost: $125 + $138.75/yr — no state income tax, fastest filing
• New York LLC cost: $200 + publication — $1,500-$2,000 publication in Manhattan
• Wyoming LLC cost: $100 + $60/yr — privacy-friendly, oldest LLC statute
• Delaware LLC cost: $90 + $300 franchise — Court of Chancery, VC-default
• New Mexico LLC cost: $50 + $0 — cheapest 5-year cost, anonymity
• Illinois LLC cost: $150 + $75/yr — watch the PPRT for partnerships
• Georgia LLC cost: $100 + $50/yr — Net Worth Tax for corp-electing
• Ohio LLC cost: $99 + $0 — largest state with no annual report
• Pennsylvania LLC cost: $125 + decennial — only 10-year cycle
• Arizona LLC cost: $50 + $0 — publication exempt in Phoenix/Tucson
• Colorado LLC cost: $50 + $25/yr — fastest online filing, online-only
• North Carolina LLC cost: $125 + $202/yr — among the highest annual reports
• Virginia LLC cost: $100 + $50/yr — filed via SCC, not SOS
• Washington LLC cost: $200 + B&O Tax — gross-receipts tax replaces income tax
• Massachusetts LLC cost: $500 + $500/yr — most expensive state for ongoing maintenance

For all 50+1 jurisdictions and the underlying CSV dataset, see the state-by-state hub and the methodology page.

What this calculator doesn’t include

The calculator above computes direct LLC entity cost. Several adjacent costs are intentionally excluded because they vary per business:

• Federal income tax — depends on the owner’s tax bracket and entity classification.
• State income tax on owners — pass-through to personal returns; varies by state of residency.
• Self-employment tax — 15.3% on net SE earnings up to $168,600 (2026 SSA wage base). Detailed in our tax compliance hub.
• City and county business licenses — typically $25-$500/yr depending on jurisdiction. Cited per locality in our hidden costs spoke.
• Sales tax permit registration — usually free or under $50, but registration is required in any state where you have nexus.
• Workers compensation insurance — required in 49 states (Texas is the exception). Premiums depend on payroll and industry.
• Foreign qualification fees — $100-$750 per outside state where you have nexus, plus that state’s annual report. The home-state vs Wyoming/Delaware myth math is detailed above.

These are surfaced in the “What this doesn’t include” callout on every state page. We don’t bury them.

When you should pay a service vs DIY

Three honest decision points:

1. Time-cost trade-off. If your hourly rate exceeds $50, spending 4 hours filing yourself plus future maintenance costs more than a $39-$199 formation service. For most professionals, DIY pencils only if you actually enjoy the process or have specific reasons (anonymity that requires careful manual filing).
2. Multi-state operations. Services with compliance dashboards (ZenBusiness, LegalZoom) reduce missed annual report risk across 3+ states. The $200/yr is cheap insurance against the $25-$400 late penalties stacking.
3. First-time founder anxiety. A service holds your hand through the first filing. Worth the premium for founders intimidated by the SOS form. The marginal cost is usually $200 in year one, then $125-$249/yr for ongoing RA service.

Skip formation services if: you’re DIY-comfortable with online forms, you live in the formation state and can be your own RA, you operate in only one state, and the $200-$600/yr savings matter to you. The math heavily favors DIY for solo bootstrap founders.

How we calculate: methodology in 60 seconds

Every fee on this page is verified directly from the state’s Secretary of State website on 2026-04-25. Our data verification process lists the canonical SOS URL for each of the 51 jurisdictions. The dataset is published as CSV under CC BY 4.0 — fork it, audit it, cite it.

The 5-year total assumes:

• Filing fee paid once at formation
• Annual report fee paid in years 1-5 (or biennial × 3 cycles for biennial states; decennial states show the annualized average)
• Franchise tax paid in years 1-5 (or year 2+ for states with first-year exemption like California’s AB 85 — which has now sunset)
• No add-on services (no RA, no operating agreement service, no EIN service, no expedite)
• No nexus in any other state

Add-on services are calculated separately in the calculator above. Verification cadence: 90 days. Last full re-verification: 2026-04-25.

Common mistakes founders make on LLC cost

Three patterns we see repeatedly when founders email us with cost questions:

Mistake 1: Optimizing for filing fee instead of 5-year total. A $35 Montana LLC sounds great until you realize ongoing maintenance, RA service, and home-state foreign qualification stack the actual cost. Always compute 5-year total of ownership before deciding where to form.

Mistake 2: Believing the “Wyoming saves you tax” pitch. Wyoming saves you the formation state’s tax — but state taxes apply where you have nexus, not where you formed. If you operate in California, NY, or any high-tax state, you pay both states. The Wyoming pitch only works for non-residents with no US presence or pure-passive holding companies with no operating nexus.

Mistake 3: Paying a service for the EIN. EIN is genuinely free at irs.gov, takes 5 minutes, and issues instantly during business hours. Services charge $50-$99 to do the same form for you. The only legitimate paid case: non-US residents without an SSN/ITIN must fax Form SS-4 with international wait times.

The fix for all three: compute 5-year total cost, verify nexus implications with your state’s Department of Revenue or Franchise Tax Board, and use the IRS direct EIN application unless you have a specific non-resident need.

Frequently asked questions

How much does it cost to start an LLC in 2026?

Range: $35 to ~$2,200 in year one depending on state. The cheapest is Montana at $35 (filing fee only, DIY, no add-ons). The most expensive is New York with publication: $200 SOS filing + $1,200-$2,000 publication + RA service. Most founders pay $90-$500 in year one. Source: each state’s SOS website, last verified 2026-04-25.

What is the cheapest state to form an LLC?

Mississippi, Missouri, and New Mexico tie for cheapest 5-year total: $50 (just the filing fee, $0 ongoing). Montana has the cheapest filing fee ($35) but $20/yr ongoing pushes its 5-year to $115. Caveat: filing-fee math only matters if you live and operate in that state — see the home-state-vs-Wyoming section. Source: state SOS websites, verified 2026-04-25.

What is the most expensive state for an LLC?

California: $4,070 over 5 years for a basic LLC ($70 filing + $800/yr franchise tax + $20 biennial). The $800 minimum franchise tax applies even if your LLC has zero revenue. Source: ftb.ca.gov LLC guidance, verified 2026-04-25.

Should I form my LLC in Wyoming or Delaware to save money?

Almost never, if you operate elsewhere. State franchise taxes apply where you have nexus (offices, employees, substantial sales) — not where you formed. A California-based business with a Wyoming LLC pays both: WY’s $60/yr + CA’s $800/yr + foreign qualification fees. Wyoming-formation makes sense only for non-residents with no US presence or for VC-track companies needing Delaware C-corp (which is a legal structure question, not a cost-savings one). See the home-state-vs-Wyoming section above for the full math.

Is an EIN free?

Yes. The EIN is free directly from the IRS at irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online. Online application takes 5 minutes; the EIN is issued instantly during IRS hours. Services like LegalZoom and ZenBusiness charge $50-$99 to submit the form for you — pure markup. The only legitimate reason to pay an EIN service is if you’re a non-US resident without an SSN/ITIN, in which case Form SS-4 must be faxed and the wait is 4 weeks.

Do I need a registered agent?

Yes. Every state requires the LLC to maintain a registered agent with a physical street address (not a PO box) in the formation state, available during business hours. You can be your own RA at $0 if you live in the state and accept your home address being public record. Otherwise, hire a service: $50-$249/yr depending on provider.

What’s the difference between filing fee and franchise tax?

The filing fee is the one-time cost charged by the SOS to register your LLC ($35-$500). Franchise tax is a recurring state-level tax for the privilege of operating as an LLC ($50-$800+/yr). Most states have only one or the other. California, Delaware, Tennessee, Alabama, and a few others charge both filing fees and franchise tax. Source: each state’s Department of Revenue, verified 2026-04-25.

How long does LLC formation take?

Online filing in most states: same-day to 7 business days. Paper filing: 2-4 weeks. Expedite (where offered): 1-3 business days for an additional $50-$750. Florida and Wyoming online filings are typically processed within 24-48 hours. California can take 2-3 weeks for standard online; expedite is $350-$750. Each state’s processing time is on its SOS website.

Do I need an attorney to form an LLC?

No. Every state’s SOS form is designed for non-lawyer use. For a single-member LLC with no investors, DIY formation via the state’s online portal is straightforward. Attorneys add value for multi-member LLCs with profit/loss allocations, regulated industries (law, healthcare, accounting — which often require PLLC formation), or complex multi-state operations. Cost: $400-$1,500 for attorney-formed LLC.

What is the New York publication requirement?

New York requires LLCs to publish notice of formation in 2 newspapers (one daily, one weekly) for 6 consecutive weeks in the formation county, then file a Certificate of Publication ($50). Total cost: $1,200-$2,000 in Manhattan, $200-$500 in upstate counties. Workaround: form with a registered agent in a low-cost county (e.g., Albany) — publication is in the formation county, not the operating county. Source: dos.ny.gov LLC publication FAQ.

What is California’s $800 franchise tax?

A minimum tax payable annually to the California Franchise Tax Board for any LLC doing business in California — including foreign LLCs (formed elsewhere) with CA nexus. The $800 is a floor; LLCs with CA-source gross receipts above $250K pay an additional gross receipts fee ranging $900-$11,790. The first-year exemption under AB 85 (2020-2023) has sunset; LLCs formed in 2024+ owe the $800 in year 1. Source: ftb.ca.gov LLC guidance, verified 2026-04-25.

Are LLC fees tax-deductible?

Yes. State filing fees, annual report fees, and franchise taxes are ordinary and necessary business expenses, deductible on Schedule C (single-member), Form 1065 (multi-member partnership), or Form 1120-S (S-corp election). Source: IRS Publication 535 Business Expenses.

What happens if I miss the annual report?

Most states impose a $25-$400 late penalty, then administrative dissolution after 60-180 days. Reinstatement costs $50-$300 plus the missed fees. Once administratively dissolved, the LLC loses its liability shield until reinstated — exposing the owner personally to claims arising during the dissolved period.

Do I need an operating agreement?

Legally required in California, Delaware, Maine, Missouri, and New York. The other 45 states do not require one. Practically required everywhere — most banks require an operating agreement to open a business account, and the default state law (the LLC Act) often gives equal management and equal profit splits regardless of capital contribution. Cost: $0 (free SBA template) to $1,500 (attorney-drafted multi-member).

What’s the cheapest way to form an LLC?

DIY formation via your state’s SOS online portal, plus self-RA (if you live in the state), plus free SBA operating agreement template, plus IRS direct EIN. Total cost: just the state filing fee. In Montana that’s $35. In Mississippi or New Mexico, $50. The “$0 LLC formation services” advertised by ZenBusiness, Bizee, and others are real for the formation step but recoup their margin on registered agent service ($199-$249/yr after a free first year).

Sources

1. IRS Limited Liability Company (LLC) overview — last verified 2026-04-25
2. IRS Apply for an Employer Identification Number Online — last verified 2026-04-25
3. IRS Form 2553 (S-corp election) — last verified 2026-04-25
4. IRS Form 8832 Instructions — last verified 2026-04-25
5. IRS Publication 535 Business Expenses — last verified 2026-04-25
6. Social Security Administration 2026 Contribution and Benefit Base — last verified 2026-04-25
7. FinCEN Beneficial Ownership Information — last verified 2026-04-25
8. California Franchise Tax Board LLC guidance — last verified 2026-04-25
9. California Secretary of State Business Entities Forms — last verified 2026-04-25
10. Delaware Division of Corporations Fees — last verified 2026-04-25
11. Wyoming Secretary of State Start a Business — last verified 2026-04-25
12. New York DOS LLC Publication Requirement — last verified 2026-04-25
13. Texas Comptroller Franchise Tax — last verified 2026-04-25
14. Texas SOS Forms — last verified 2026-04-25
15. Florida Sunbiz — last verified 2026-04-25
16. Massachusetts Secretary of the Commonwealth — last verified 2026-04-25
17. Arizona Corporation Commission — last verified 2026-04-25
18. American Bar Association Section of Business Law — last verified 2026-04-25
19. SBA Apply for Licenses and Permits — last verified 2026-04-25
20. Northwest Registered Agent Services — last verified 2026-04-25

Plus the full 51-jurisdiction SOS citation registry, each independently verified 2026-04-25.

About the author

Aissam Baidi is the founder and researcher behind llcformationcost.com. He compiles the 51-jurisdiction LLC fee dataset directly from each state’s Secretary of State website and IRS publications, refreshing the data quarterly. Connect on LinkedIn.

This page is pending review by a credentialed CPA or licensed attorney. Once filled, the reviewer’s name, credential, and review date will appear in the trust strip at the top of every page.

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Not legal advice. Estimates based on publicly available data from each state’s Secretary of State office. Consult a licensed attorney in your jurisdiction.