How Much Does an LLC Cost by State? A Complete Breakdown of Filing & Ongoing Fees

If you’re planning to form an LLC in the US, chances are you’ve started with the same question every founder asks: How much does an LLC cost by state?

Here’s the truth right away: there’s no universal price tag.

The cost of forming an LLC isn’t fixed across the country. It depends entirely on the state you choose, the ongoing fees required to keep your business in good standing, and the compliance rules that apply long after you file your paperwork.

In some states, you can launch an LLC for under $50. In others, maintaining one can cost hundreds, or even thousands, every single year, even if your business is just getting started.

That’s why choosing the right state isn’t about finding the cheapest filing fee upfront; it’s about understanding the full financial picture and making a decision that supports your business long-term.

In this guide, we’ll break down everything you need to know, including:

• Ongoing and annual compliance costs

• The cheapest and most expensive states to form an LLC

• Why low upfront fees can be misleading

• How to choose the best state for your business goals

What Makes Up the Cost of an LLC?

Before you start comparing states or chasing the lowest filing fee, it’s crucial to understand what you’re actually paying for when you form an LLC.

Many founders stop at the upfront cost, and that’s exactly where expensive surprises creep in later.

Here’s a complete breakdown of every cost category that goes into forming and maintaining an LLC:

1. Initial LLC Filing Fee (Articles of Organization)

This is the mandatory, one-time fee you pay to the state to legally create your LLC. It typically ranges from $40 to $500, depending on the state.

This fee is unavoidable and varies the most by state.

2. Registered Agent Fees (Required in All States)

Every LLC is legally required to designate a registered agent, a person or service with a physical address in the state who can receive legal documents, tax notices, and official correspondence on behalf of the business.

You have two options in this case:

• Act as your own registered agent (if you meet state requirements and are available during business hours)

• Hire a professional registered agent service, which is strongly recommended for privacy, reliability, and compliance tracking

For many founders, especially remote operators, non-US entrepreneurs, and digital businesses, using a professional registered agent avoids missed notices, public address listings, and compliance risks.

✅ What is the typical cost of a registered agent?

The cost of a registered agent usually ranges from $0 to $300 per year, depending on whether you act as your own agent or hire a professional registered agent service for added privacy and compliance support.

✅ Is a registered agent mandatory for an LLC?

Yes. Every LLC is legally required to have a registered agent in its state of formation.

While you can serve as your own agent in some cases, paying for a professional service is optional, but often recommended for reliability and convenience.

3. Annual Reports & Renewal Fees

Forming an LLC is not a “set it and forget it” process. Most states require LLCs to file annual or biennial reports to confirm business details and keep the entity in good standing.

• Filing frequency: Annually or every two years

• Typical cost: $0 to $500+ depending on the state

• What it updates: Business address, ownership, registered agent, and activity status

Missing a filing deadline can trigger late fees, penalties, or even administrative dissolution, forcing you to reinstate, or worse, re-form your LLC.

4. Franchise Taxes & Mandatory State Fees

Some states like California, Texas, and Delaware charge franchise taxes or mandatory minimum annual fees simply for the privilege of keeping an LLC registered there, regardless of whether the business is profitable.

In other words, even if your LLC earns zero revenue, you may still owe the state a fixed yearly amount just to remain in good standing.

These fees are often misunderstood and underestimated because they don’t feel as obvious as the initial filing cost. But they can have a major long-term impact.

Franchise taxes are typically recurring, meaning you’ll pay them every year, and in many states, they still apply even if your LLC is inactive or operating at a loss. 

In some cases, the cost can also increase as your business revenue grows, adding another layer of expense as you scale.

This is where LLC costs can quietly snowball over time, turning a state that looks “cheap” upfront into a more expensive long-term commitment once the ongoing mandatory fees add up.

5. Optional but Common LLC Costs

While not always legally required, these expenses are extremely common, and often essential, for running a compliant, scalable business.

Cost	Is it Mandatory?
EIN (IRS)	Free if self-filed
Operating Agreement	Not required in most states, but strongly recommended
Compliance monitoring	Optional
Bookkeeping & tax support	Optional, but highly recommended

⚡ Key takeaway: When comparing LLC costs by state, don’t stop at the filing fee. The real cost of an LLC is what you pay over time, including renewals, compliance, and mandatory state fees.

LLC Filing Fees by State | Complete State-by-State Breakdown

In this section, we’ll present a high-level overview of LLC filing fees by state and typical ongoing costs. 

Note: Fees are approximate and subject to change.

State	Initial Filing Fee	Annual / Recurring Fee
Alabama	$200	$200 Business Privilege Tax
Alaska	$250	$100 biennial
Arizona	$50	$0
Arkansas	$45	$150
California	$70	$800 minimum franchise tax
Colorado	$50	$10
Delaware	$90	$300 franchise tax
Florida	$125	$138.75
Georgia	$100	$50
Illinois	$150	$75
Kentucky	$40	$15
Massachusetts	$500	$500
Missouri	$50	$0
Nevada	$425	$350+
New Mexico	$50	$0
New York	$200	$9 biennial (+ publication costs)
Texas	$300	$0 (but franchise tax applies)
Wyoming	$100	$60

📌 A few outliers: Lowest upfront fees: Kentucky, Missouri, New Mexico Highest ongoing costs: California, Massachusetts, Nevada Low filing, high maintenance: Delaware, California

🔖 Related Read: Top 5 Best States to Open an LLC as a Foreigner in 2026

Cheapest States to Form an LLC (And the Catch)

States like Kentucky, Missouri, and New Mexico frequently show up on “cheapest states to form an LLC” lists, and technically, they earn that spot.

On paper, these states offer some of the lowest upfront and ongoing costs in the country. But affordability alone doesn’t give you the complete picture.

While these states can be a smart choice for certain founders, they also come with trade-offs that are easy to overlook.

Why These States Are Considered “Cheap”

These states keep LLC costs low by stripping the process down to the essentials:

• Low or zero annual reporting fees: Many of these states either don’t require annual reports or charge a nominal fee, which keeps long-term compliance costs predictable and minimal.

• Minimal compliance requirements: Fewer filings, fewer deadlines, and less administrative complexity make these states appealing to founders who want to stay focused on operations rather than paperwork.

• No franchise taxes (in some cases): Unlike states that impose flat minimum taxes regardless of revenue, these states often avoid recurring franchise fees, especially helpful for early-stage or low-revenue businesses.

The Catch Most Founders Don’t See at First

It’s important to note that these lower costs often come with quieter limitations:

1. Fewer legal precedents for complex businesses: These states may not have as well-developed case law for sophisticated business structures, which can matter as your company scales or raises capital.

2. Limited investor familiarity: Venture capital firms and institutional investors tend to be more comfortable with LLCs formed in states like Delaware, where legal frameworks are widely understood.

3. Less robust privacy protections in some states: Certain low-cost states require more public disclosure of member or manager information, which can be a concern for founders prioritizing anonymity.

When These States Actually Make Sense

Cheap states can be a great fit when the business model matches the simplicity of the structure:

• You’re a solo founder or freelancer: Independent consultants, creators, and service providers often don’t need complex legal frameworks.

• Your business is simple and locally operated: If you’re serving a specific region or running a straightforward operation, the added benefits of more expensive states may not be necessary.

• You want minimal administrative overhead: Fewer filings and lower compliance pressure mean less time managing bureaucracy, and more time growing your business.

Remember, cheap can absolutely be good, but only when it aligns with how your business operates today and how you expect it to grow tomorrow. 

Most Expensive States to Form and Maintain an LLC

Some states come with a noticeably higher price tag, not just to form an LLC, but to keep it compliant year after year.

These costs aren’t accidental. They reflect deeper regulatory frameworks, larger economies, and access to powerful markets.

While these states are often labeled “expensive,” they’re not inherently bad choices.

In many cases, founders knowingly accept higher costs because the opportunity, credibility, and growth potential justify the investment.

Let’s break down why these states cost more, and why they may still be worth it.

1. California

California is widely considered the most expensive state for LLC maintenance, and for good reason: 

• $800 minimum franchise tax every year: This fee is mandatory and applies simply for having an active LLC registered in the state.

• Applies even if the LLC earns $0: Even pre-revenue or inactive businesses are required to pay the minimum tax, which can be a shock for early-stage founders.

• Additional fees at higher revenue levels: As your LLC’s income grows, California may impose additional taxes and reporting requirements, increasing the total compliance burden.

Despite the cost, California offers unmatched access to innovation hubs, talent, and global markets, making it attractive for tech, media, and high-growth startups.

2. New York

New York’s costs are less about taxes and more about procedural requirements.

• Mandatory LLC publication requirement: Newly formed LLCs must publish formation notices in approved newspapers for several weeks.

• Can cost $1,000–$2,000 depending on county: Fees vary significantly by location, with Manhattan-based publications being particularly expensive.

For businesses that benefit from New York’s financial ecosystem, global visibility, and commercial influence, this upfront expense is often seen as a necessary cost of entry.

3. Massachusetts & Nevada

These states round out the list of high-cost jurisdictions, each for different reasons.

• High filing and renewal fees: Both states charge more than average for initial formation and ongoing compliance.

• Heavier regulatory oversight: More reporting requirements and stricter enforcement can increase administrative workload over time.

That said, these states can be appealing for specific industries and business models that benefit from their regulatory environments or geographic positioning.

Why Founders Still Choose These States

Even with higher costs, many founders intentionally form LLCs in these states because of what they offer in return:

1. Access to massive, high-value markets: Large customer bases and strong economic activity can outweigh higher compliance expenses.

2. Investor and institutional credibility: Businesses registered in well-known commercial hubs often face fewer questions from investors, partners, and banks.

3. Industry-specific advantages: Certain states are simply better suited for specific sectors, whether it’s tech, finance, entertainment, or advanced services.

It is important to note that higher LLC costs don’t automatically mean a bad decision.

When the market access, growth potential, and strategic advantages outweigh the expense, forming an LLC in a high-cost state can be a calculated and profitable move.

Initial vs Ongoing LLC Costs: What Most Founders Miss

A common blind spot for first-time founders is assuming the cost of an LLC begins and ends with the formation fee. It’s easy to focus on the one-time filing charge because it’s the first number you see when registering your business. 

But the true cost of an LLC is shaped far more by what you’ll pay every year afterward to stay compliant and in good standing.

To understand the difference, it helps to separate fixed upfront costs from variable long-term costs.

The filing fee is typically a one-time, fixed expense.

Annual reports, renewal fees, franchise taxes, registered agent services, and compliance filings are recurring, and those are the costs that quietly compound over time.

Example: Comparing cost in two states

Say for instance, we have state A and state B.

State A looks extremely affordable at first, with a $50 filing fee. But it also requires a $300 annual fee to maintain the LLC.

State B, on the other hand, charges $300 upfront to form the LLC, but has no recurring state renewal fees.

At formation, most founders would instinctively choose State A because $50 feels like the “cheaper” option. But over a five-year period, State A ends up costing $1,550 total ($50 upfront + $300 per year), while State B remains a flat $300.

This is exactly why cheaper upfront doesn’t always mean cheaper long-term. 

The real financial impact comes from ongoing compliance obligations, especially in states with franchise taxes or high annual maintenance requirements.

Founders who only budget for formation often get caught off guard later by recurring state fees, additional filings, and hidden compliance costs.

That’s why understanding LLC annual fees by state, not just filing fees, is critical. The smartest decision for your LLC is the one that makes sense not just for launch day, but for the next three to five years of running and growing your business.

Should You Form an LLC in a Different State Than You Live In?

Well, it really depends: sometimes yes, often no. The deciding factor, in this case, isn’t the filing fee; it’s whether your business has a physical presence (or “nexus”) in a particular state.

Choosing the wrong state can quietly double your compliance workload and costs. Choosing the right one can simplify operations and support long-term growth.

Let’s break it down.

When Forming an LLC in a Different State Can Make Sense

In certain scenarios, forming outside your home state is a real strategic move:

1. You Run a Fully Digital Business

If your business operates entirely online, with no physical office, employees, or in-person services, you may have flexibility in where you form your LLC.

Example:

Say a solo SaaS founder living in Florida sells software globally, works remotely, and has no US office or employees.

In this case, forming in a business-friendly state like Delaware or Wyoming may simplify compliance and increase credibility with investors or partners.

Let’s compare the cost in both cases:

Scenario	Formation State	Annual State Costs
Home-state LLC	Florida	~$138/year
Delaware LLC	Delaware	~$300 franchise tax

In exchange for higher annual fees, the founder gains stronger legal infrastructure and investor familiarity, often worth it for scalable tech businesses.

2. You’re a Non-US Founder

For non-US entrepreneurs, forming an LLC in their “home” state isn’t relevant. Instead, the goal is choosing a state that balances simplicity, global acceptance, and compliance ease.

Example: A founder based in India running a US-focused e-commerce brand may choose Wyoming or Delaware due to:

• No state income tax (Wyoming)

• Strong international recognition (Delaware)

• No physical presence triggering multi-state filings

Here, forming in a single, business-friendly state can reduce administrative complexity.

3. You Don’t Operate From a Fixed US Location

If you’re location-independent: digital nomad, remote consultant, or online creator, you may not trigger physical presence rules in any one state.

In these cases, forming in a state with low ongoing fees, minimal reporting, and flexible compliance can be a smart cost-saving move.

🔖 Related Read: Which Is the Best Company to Start an LLC With?

When Forming Outside Your Home State Usually Does Not Make Sense

This is where many founders make expensive mistakes, so let’s discuss a few common scenarios:

1. You Have Employees or an Office in Your Home State

If you operate physically in a state, through employees, offices, or warehouses, you are legally required to register there, regardless of where you formed your LLC.

Example:

Let’s say a founder lives and runs a marketing agency in California but forms an LLC in Wyoming to “save money.”

But here’s what he ends up paying:

• Wyoming LLC filing fee: ~$100

• Plus California foreign LLC registration

• Plus California’s $800 franchise tax

He incurs a total annual cost of over $960, instead of just forming directly in California.

2. You Offer In-Person or Location-Based Services

Businesses that rely on local presence such as salons, consultants, real estate services, healthcare providers, and others almost always need to form where they operate.

Forming elsewhere adds complexity without delivering meaningful benefits.

3. You’ll Need to Register as a Foreign LLC Anyway

When you form an LLC in one state but operate in another, you must register as a foreign LLC in the operating state.

This means you’ll have:

Let’s break down the potential cost involved:

Expense	Home-State LLC	Out-of-State + Foreign LLC
Initial filing fees	$100	$200+
Registered agents	1	2
Annual reports	1	2
Franchise taxes	1	Possibly 2

As you see, what looked cheaper upfront often becomes more expensive within the first year.

The Real Cost of Choosing the Wrong State

Forming your LLC in the wrong state doesn’t just lead to higher fees; it can create long-term operational headaches. It often increases your compliance risk, especially if you’re unknowingly required to register in multiple states. 

It also adds a heavier administrative burden, with more filings, deadlines, and paperwork to manage each year.

Over time, this raises the likelihood of missed reports, late penalties, or loss of good standing. 

And once your LLC is already formed, fixing the decision isn’t always simple. It may require dissolving and re-forming the entity, or continuing to pay ongoing foreign registration and maintenance costs in two states instead of one.

How to Choose the Right State for Your LLC

Selecting the right state to form your LLC isn’t about chasing the lowest filing fee or simply emulating what other founders are doing. It’s about making a decision that supports your business legally, financially, and operationally.

So, instead of relying on generic “best states” lists, use this vetted and verified checklist to evaluate what actually makes sense for your business:

Where do I actually operate?

Start with the most important question: where is your business physically based?

If you live, work, hire employees, or run day-to-day operations in a specific state, forming your LLC there is usually the simplest and most compliant choice.

Forming elsewhere often triggers foreign LLC registration, which adds extra fees and paperwork.

⚡ Remember: If your business has a real footprint in a state, that state should usually be your LLC home.

Where are my customers?

Next, consider where your revenue comes from.

If your customers are mostly local, say you run a service business, retail shop, or consulting practice, forming in your home state is typically the most straightforward path.

But if you operate online and sell nationally or globally, you may have more flexibility, especially if your business doesn’t depend on a physical location.

Example: An e-commerce founder selling across the US may prioritize a state with simple compliance and low ongoing costs, rather than customer geography.

Do I need investor credibility?

Not all LLCs are built for the same goals.

If you plan to raise funding, work with institutional partners, or scale into a high-growth startup, investor perception matters. States like Delaware are widely recognized for their established legal frameworks and business-friendly court systems.

On the other hand, if you’re building a lifestyle business, freelance practice, or small online brand, you likely don’t need the added complexity or cost of an investor-prestige state.

Ask yourself: Am I building for stability or for venture-scale growth?

🔖 Related Read: How long does it take to get an LLC in 2026?

What are the annual compliance requirements?

Filing an LLC is just the beginning. The real cost comes from maintaining it. While some states require annual reports, franchise taxes, renewal fees, and ongoing compliance filings, others have minimal or no recurring obligations.

So, before choosing a state, look beyond the formation fee and ask:

• What will I need to file every year?

• How much will it cost to stay in good standing?

• How strict are deadlines and penalties?

A low upfront fee can become expensive fast if annual compliance is high.

Will this still make sense in 3–5 years?

The smartest business decision isn’t just about what works for you today; it’s about what will still support your venture as it grows. Before choosing a state, think a few steps ahead:

Will you expand into other states, hire employees, pursue outside funding, or see a significant jump in revenue over the next few years? 

A state that feels perfect for a solo founder at launch may become limiting or costly once your business starts scaling. Planning with your future growth in mind ensures your LLC is built not just for day one, but for the long haul.

And if you want expert guidance to choose the right state and form your LLC without the confusion, doola can help you set it up the right way from day one.

How doola Helps You Form and Stay Compliant

doola makes LLC formation and compliance simple across all 50 states, so you don’t have to spend hours decoding state-by-state rules, hidden fees, or filing requirements on your own. 

With doola, you can also access registered agent services, get support with EIN and IRS compliance, and stay on top of annual reports and ongoing compliance tracking, all in one streamlined experience.

Our services are especially valuable for first-time US and non-US founders, and fast-moving businesses like e-commerce brands, SaaS companies, and digital-first startups that need to stay compliant while focusing on growth.

And if you want to form your LLC the right way from day 1, without the guesswork or costly mistakes, doola has your back. 

Sign up today and take the next step toward building with confidence.

FAQs

What is the cheapest state to form an LLC?

Kentucky and Missouri are often considered two of the most affordable states to form an LLC due to their low filing fees and minimal ongoing compliance costs. 

What state has the lowest ongoing LLC fees?

States like New Mexico, Missouri, and Arizona are known for having very low, or even no annual reporting fees, which can make long-term maintenance significantly cheaper.

These states are especially appealing for simple, digital-first businesses with minimal regulatory needs.

Why is California so expensive for LLCs?

California is costly because it imposes an $800 minimum franchise tax every year, even if your LLC earns no income.

Additional fees may apply as revenue grows, making California one of the most expensive states for ongoing LLC compliance.

Can I form an LLC in one state and operate in another?

Yes, you can. But if you’re actively doing business in a different state, you’ll likely need to register there as a foreign LLC. This often means extra filing fees, additional annual reports, and potentially maintaining compliance in two states instead of one.

Do LLC costs change every year?

Yes. State filing fees, annual report charges, and franchise tax rules can change periodically based on new legislation or administrative updates. It’s important to review current state requirements each year to avoid surprises.

Are LLC filing fees tax-deductible?

In many cases, yes. LLC formation fees and ongoing compliance expenses are typically considered legitimate business costs and may be deductible.

However, deductions depend on your tax situation, so it’s always smart to consult a tax professional.

How much does it really cost to maintain an LLC annually?

The annual cost of maintaining an LLC can range from as little as $0 in low-fee states to $1,000+ in states with franchise taxes and heavier reporting requirements.

Your total cost depends on where the LLC is formed and what compliance obligations apply to your business.