How Much Does an LLC Cost? State-by-State Fee Guide 2026
The cost to form an LLC varies dramatically by state — from as low as $50 in some states to over $500 in others. Beyond the initial filing fee, ongoing annual costs can range from zero to over $1,000 per year. This guide covers the complete cost picture so you can budget accurately for your LLC.
Disclaimer: Filing fees change periodically. Always verify current fees directly with your state’s business filing office before submitting.
Initial State Filing Fees (Articles of Organization)
These are the one-time fees to officially create your LLC. Low-cost states (under $100): Kentucky ($40), Colorado ($50), Arkansas ($45), Mississippi ($50), Missouri ($50), New Mexico ($50), Oklahoma ($100). Mid-range states ($100-$200): Texas ($300), Florida ($125), Georgia ($100), Illinois ($150), Ohio ($99), Pennsylvania ($125). High-cost states: California ($70 filing but $800 annual tax), Massachusetts ($500), Nevada ($425), Tennessee ($300). Read Best States to Form an LLC for a strategic overview.
Annual Fees and Ongoing Costs
Annual report fees: Most states require annual or biennial reports with fees ranging from $0 (New Mexico has no annual report) to $300+. Franchise taxes: Some states charge annual franchise or privilege taxes regardless of profit. California’s $800 minimum franchise tax is the most significant — every California LLC pays at least $800 per year.
Registered agent: If using a registered agent service, budget $50 to $300 per year.
Other Potential LLC Costs
Operating agreement: DIY is free. Attorney-drafted costs $300 to $1,500. Business licenses: Varies widely by business type and location. EIN: Free from the IRS. Business bank account: Most banks offer free or low-cost business checking. Accounting software: $0 to $50/month. Formation service: Using a service like ZenBusiness or Northwest adds $0 to $200 above state fees for convenience.
Total First-Year Cost Estimate
Most states: $150 to $500 total for the first year (filing fee + registered agent + basic setup). California: $870+ (filing fee + $800 minimum franchise tax). Massachusetts: $600+ (formation fee + annual report). New York: $1,200 to $2,500+ (due to publication requirement).
How to Minimize LLC Costs
File directly with your state’s website rather than using an online formation service. Serve as your own registered agent to save $50 to $300/year. Draft your own operating agreement using a reputable template. Get your EIN directly from the IRS for free. Read How to Form an LLC Step by Step for the DIY formation process.
Why the Same LLC Costs So Much More in Some States
States set their own formation fees, annual report fees, and franchise taxes, so the same simple business can carry very different price tags depending on where you file. Some states charge only a one-time filing fee. Others charge every year regardless of whether the company earned any income. The most useful comparison is the total over the first three years, not just the day-one filing fee.
Registered Agent Fees
Every LLC must maintain a registered agent with a physical address in its state of formation. You can serve as your own agent if you have a permanent address and are available during business hours, which costs nothing. Commercial registered agent services charge an annual fee that commonly falls in the range of about one hundred to three hundred dollars, and they keep your home address off the public record.
Hidden and Recurring Costs to Plan For
Several costs are easy to overlook: a certified copy of your formation documents when opening a bank account, a state or local business license, publication requirements in a few states, annual or biennial report fees, and, if you form in one state but operate in another, foreign qualification fees in that second state. Professional help such as an accountant or attorney is optional but should be budgeted if your situation is complex.
Building a Realistic Three-Year Budget
Add the formation fee, the first-year registered agent cost if you use one, the annual report or franchise tax multiplied by three, and any licenses you need. Then add a small buffer for filing corrections or expedite fees. Writing this out prevents the surprise of a franchise tax bill you did not expect.
Where to Confirm Current Fees
Fees change, so always confirm on your Secretary of State website before you file. The U.S. Small Business Administration maintains a directory of state registration resources that points you to the right office.
Frequently Asked Questions
Are LLC formation fees tax deductible? Generally, startup and organizational costs can be deducted or amortized, subject to IRS limits. Confirm details with a tax professional.
Do I pay fees every year even with no income? In many states, yes. Annual report fees and franchise taxes usually apply whether or not the LLC earned money.
Is the cheapest state always best? No. If you live and work in a different state, you will usually owe that state’s fees too.
This article is general information, not legal or tax advice.
Conclusion
For most business owners outside California, Massachusetts, and New York, forming an LLC costs $150 to $400 in the first year — a modest investment for meaningful personal liability protection. Continue with What is an LLC? and How to Form an LLC Step by Step.
