What is the best state to form an LLC?

Why is your home state usually the cheapest choice?

Your home state is usually cheapest because an LLC formed somewhere else may also have to register where it does business, and then it pays two states' formation fees and two states' yearly charges.

The SBA says a business active in other states may need to foreign qualify there by filing a Certificate of Authority; fees vary by state. Registering this way is called foreign qualification, and "foreign" here only means formed in a different state. Once registered, the LLC can owe the home state's yearly charges as well: Illinois sets one annual report fee of $75 for its own LLCs and for foreign ones, and California's $800 annual tax applies to every LLC doing business in California.^{7, 8, 9}

Each state sets its own test for what counts as doing business there, and this guide doesn't try to apply that test to your facts. What it can show is the price of the extra registration, which in Texas is $750 (Form 304, LLC Application for Registration) for an out-of-state LLC against a formation fee of $300 for a Texas one. Illinois charges $150 (application for admission), the same as its domestic fee of $150.^{8, 10, 11}

The SBA describes the main protection of an LLC this way: an LLC protects owners from personal liability in most instances, and profits and losses can pass through to personal income without corporate taxes. That description covers LLCs in general and does not single out any state of formation.¹²

What does each state charge to form and keep an LLC?

The median formation fee in our state records is $100, and the yearly charges in the examples below run from Montana's report fee, waived when filed on time, to California's $800 annual tax.⁹

The table lists each state's formation fee, yearly report fee and any franchise or entity-level tax our sources confirm. "Not published" means we found no official figure, not that the charge is zero.

51 of 51 states publish this in the official sources we checked. Each state's page has the full detail.

A few rows stand out. Kentucky's filing fee is $40, but its Limited Liability Entity Tax has a minimum $175 per year. Rhode Island's minimum tax of $400 is owed even without business activity or profit. Montana charges $35 to form, and its report fee is $0 if filed January 1 to April 15 (fee waived); $35 after April 15. The state fees table shows the same figures with each source, and the LLC cost guide adds what formation services charge on top.^{13, 14, 15, 16, 17}

How do the usual alternative states compare on cost?

Of Delaware, Wyoming and Nevada, Wyoming has the lowest minimum yearly charge for an LLC. Delaware has a flat yearly tax and no report, and Nevada costs the most to start.

Fees in Delaware

Delaware's Certificate of Formation costs $110. Delaware LLCs file no annual report. Instead they pay a flat $400 annual LLC tax, due on or before June 1, and paying late brings a $200 penalty plus 1.5% interest per month.^{1, 2}

Faster state processing is sold for formation filings (LLC formation: 24-hour +$50, same day +$100). Without it, Delaware publishes no fixed time; its regular (non-expedited) processing varies with volume, so the date a filing clears can't be predicted from the state's pages. The Delaware LLC guide covers the filing step by step.^{1, 18}

Fees in Wyoming

Wyoming charges $100 for Articles of Organization, and filed online, the entity is active immediately, according to the Secretary of State. Paid expedite is not available for initial formations.^{3, 4, 19}

The yearly Annual Report carries a license tax of $60 or $0.0002 per dollar of Wyoming assets, whichever is greater. The report is due on the first day of the anniversary month of formation. Wyoming's fee schedule lists no late fee, but an LLC whose report is late is administratively dissolved if not filed within 60 days of the due date. The Wyoming LLC guide covers the filing itself, from the name check to the agent's street address in the state.^{4, 20}

Fees in Nevada

Nevada's filing fee is $75, but the state collects more at formation. The Initial List of Managers or Members ($150) and the $200 State Business License are due when the Articles of Organization are filed.^{5, 6}

Each year after that, the LLC files an annual list with its business license renewal and pays a $150 list fee plus $200 State Business License fee. Missing the deadline costs a $75 late fee on the list (plus $100 State Business License late fee). Nevada's Commerce Tax applies only if Nevada gross revenue exceeds $4 million in a fiscal year, so a business below that revenue owes no Commerce Tax. The Nevada LLC guide walks through the forms.^{5, 21, 22}

What does it cost to form out of state and register at home?

An LLC formed in one state and registered in another pays in both: the formation state's fee and yearly charge, plus the home state's foreign registration fee and its yearly charges.

Take a founder in California who forms in Wyoming. Formation costs $100 in Wyoming plus California's foreign registration fee of $70 (Application to Register, Form LLC-5). California's annual LLC tax of $800 still applies to an LLC doing business there (plus an LLC fee from $900 when total California income is $250,000 or more), and Wyoming's yearly fee of at least $60 comes on top. Forming in California directly costs $70 and skips the Wyoming charges. The California LLC guide explains the tax schedule and the Statement of Information.^{3, 4, 9, 23, 24}

A Texas founder who forms in Delaware pays $110 there and $750 (Form 304, LLC Application for Registration) in Texas, compared with $300 for a Texas LLC. Delaware's $400 annual LLC tax then repeats every year. Under Texas' franchise tax there is no tax due at or below the $2,650,000 revenue threshold (2026 to 2027 report years), and an information report is still required. The Texas LLC guide lists the Comptroller reports.^{1, 2, 10, 11, 25}

Registering usually also means a registered agent in that state, the person or company named to receive legal papers there; Texas law, for example, requires a registered office at a street address where the agent can be served (Tex. Bus. Orgs. Code § 5.201). Bought on its own, without a formation order, an agent costs $125 per year at Northwest, $149/year at Bizee and $199/year at ZenBusiness. The registered agent guide covers who can serve, and the foreign LLC guide covers the registration itself.^{26, 27, 28, 29}

Which home states change the comparison?

Some home states look expensive to form in, but in the four below, a business that operates there and forms elsewhere still pays much of the same cost.

New York has a publication rule for new LLCs: Publish the Articles or a notice in two newspapers chosen by the county clerk for six consecutive weeks. Forming elsewhere and registering in New York doesn't avoid it, because foreign LLCs must also publish within 120 days. The formation fee is $200. After that, the recurring state filing is a Biennial Statement ($9, every two years), filed in the calendar month the articles were originally filed. The New York LLC guide has the publication steps.^{30, 31, 32, 33}

California's $800 annual tax applies to every LLC doing business or organized in California. A California business formed elsewhere and registered there as a foreign LLC owes it too, so moving the formation adds fees without removing that tax.⁹

Florida charges $125 ($100 filing fee + $25 registered agent designation) to form and $138.75 for its yearly report. A Florida business formed in another state would pay $125 total ($100 filing fee + $25 registered agent designation) to register at home, the same total as a new Florida LLC. The Florida LLC guide shows the dates.³⁴

South Dakota is a case where the foreign fee is far higher than the domestic one: $750 online, $765 on paper (Foreign Certificate of Authority) against $150 online, $165 by paper to form there.³⁵

When can another state make sense?

Another state can come up when the business has no physical home in any one state, when the owners live outside the U.S., or when the owners have reasons other than cost.

A founder abroad has no home state to register in, so the yearly cost and online filing of the formation state carry more weight. Beneficial ownership reporting doesn't depend on the state chosen: FinCEN says U.S. companies are permanently exempt from BOI reporting under a FinCEN final rule effective August 14, 2026. The guide for non-U.S. residents covers the EIN and address steps, and the services for non-U.S. founders list shows which providers accept them.³⁶

Some owners pick a state for reasons other than fees, such as a request from investors or partners. That is a choice to make with a lawyer or accountant, with your own numbers in front of you.

For other owners, the totals are the main comparison. The cost calculator adds a chosen state's fees to each provider's plan for the first and second year, and the annual report guide lists what each state's yearly filing involves. The plans page shows what each formation service includes, wherever you file.