LLC Cost Calculator — Formation Fees by State (2025)

State Filing Fees: The Complete Picture

The state filing fee is the mandatory cost to register your LLC with the Secretary of State. This is a one-time fee paid when you file your Articles of Organization (called Certificate of Formation in some states). Fees vary dramatically: Kentucky charges just $40, while Massachusetts charges $500. Most states fall in the $50-$200 range. This fee is non-negotiable and non-refundable — you pay it whether your LLC succeeds or fails.

But the filing fee alone is misleading. California's filing fee is only $70 — sounds cheap, right? Except California also imposes an $800 annual Franchise Tax on every LLC, due within the first few months of formation and every year thereafter. That turns a"$70 LLC" into an $870 first-year cost and $800+ annually. Delaware charges only $90 to file but has a $300 annual franchise tax. Nevada's $75 filing fee is accompanied by a $150 annual report fee and a $200 business license fee. Always look at the total annual cost, not just the filing fee.

The Cheapest States to Form an LLC

If you're looking purely at cost and you'll be operating in the state where you form, here are the most affordable options. Arizona ($50): Low filing fee, no annual report required, no franchise tax. One of the best deals in the country. Colorado ($50): Very low filing fee and only $10 for the annual report. Total annual cost after year one: $10. Iowa ($50): Low filing fee with a $30 biennial report. Minimal ongoing costs. Michigan ($50): $50 to file, $25 annual report. Simple and affordable. New Mexico ($50): No annual report requirement at all. Pay $50 once and you're done with state fees indefinitely.

Kentucky deserves special mention at $40 — the lowest filing fee in the country. Annual reports are only $15. Total 5-year cost with the state: $100. Compare that to Massachusetts at $500 filing plus $500 annual reports — a 5-year total of $2,500 in state fees alone.

The Most Expensive States

California leads the pack with $70 filing + $800 annual franchise tax + $20 biennial report = $870 in year one and $810+ annually. Over 5 years, that's $4,110 in state fees alone. Many small businesses that don't need a California presence form in another state specifically to avoid this tax. Massachusetts charges $500 to file and $500 for annual reports — $2,500 over 5 years. Tennessee is surprisingly expensive at $300 filing + $300 annual report = $1,500 over 5 years. Texas charges $300 to file but has no annual franchise tax for small LLCs (under $2.47M in revenue), making it more reasonable long-term.

Hidden Costs Most People Miss

Beyond state fees, several other costs add up. Registered Agent ($0-$300/year): Every LLC needs a registered agent — a person or service that receives legal documents on behalf of the business. You can be your own registered agent for free (in most states), but that means your home address becomes public record. Most business owners use a commercial registered agent service at $100-$300/year for privacy and reliability. EIN ($0): An Employer Identification Number from the IRS is free if you apply directly at irs.gov. But many formation services charge $50-$100 to"help" you get one. Don't pay for this — it's a 5-minute online application. Operating Agreement ($0-$500): Not legally required in most states but strongly recommended. You can draft your own using templates for free, or pay a lawyer $300-$500 for a custom one. Online legal services offer templates for $50-$100.

Business Licenses: Depending on your industry and location, you may need federal, state, county, and/or city business licenses. These range from $0 to several hundred dollars. Publication Requirements: New York and Arizona require LLCs to publish a notice of formation in local newspapers. In New York, this can cost $200-$2,000+ depending on the county (Manhattan is the most expensive). Arizona's cost is typically $100-$300. Foreign LLC Registration: If you form in one state but do business in another, you'll need to register as a"foreign LLC" in the operating state — paying filing fees and annual fees in both states. This is the hidden gotcha that makes"forming in Delaware for the low fees" a bad idea for most small businesses.

Should You Form in Your Home State or a"Business-Friendly" State?

The short answer for most small businesses: form in your home state. The"form in Wyoming/Delaware/Nevada" advice that saturates the internet applies primarily to large companies, investment funds, and businesses with complex multi-state operations. Here's why: if you live and work in California but form your LLC in Wyoming, you still need to register as a foreign LLC in California and pay California's $800 franchise tax. You'd also pay Wyoming's fees. You're now paying two states instead of one, plus managing compliance in both. The only scenario where forming out-of-state makes sense for a small business is if you genuinely have no physical presence in any particular state (e.g., a fully digital business where you travel full-time) or if you're forming a holding company that won't operate directly in any state.

Beyond the Filing Fee

When people Google"how much does an LLC cost," they usually find the state filing fee and think that's it. A $50 filing fee in Arizona sounds great — until you realize the total first-year cost of properly setting up and running an LLC is typically $500-$2,000 even in the cheapest states. The filing fee is just the admission ticket. Here's what else you'll pay for.

Registered Agent Costs

Every LLC in every state must maintain a registered agent — an individual or company designated to receive legal documents (lawsuits, government notices, tax forms) on behalf of the business. You have three options: Be your own agent (free): Legal in most states if you have a physical address there (no P.O. boxes). The downside: your home address becomes public record, and you may want to be available during business hours. Use a commercial service ($100-$300/year): Companies like Northwest Registered Agent, Incfile, or CSC provide this service. They give your LLC a business address, forward legal documents to you, and maintain availability during business hours. This is the most common choice. Use a lawyer ($200-$500/year): More expensive, but gives you a legal advisor on speed dial when documents arrive.

The registered agent cost is annual and ongoing. Over 5 years at $150/year, that's $750 — often more than the filing fee itself. Some formation services offer the first year free to get you in the door, then charge $150-$300 for renewals. Read the fine print.

Annual Reports and Franchise Taxes

Most states require LLCs to file an annual (or biennial) report confirming the business's address, members, and other details. This isn't just paperwork — it comes with a fee. Annual report fees range from $0 (New Mexico, Mississippi, Missouri, Ohio) to $500 (Massachusetts). Some states like Florida ($138.75) and North Carolina ($200) have surprisingly high annual report fees. If you miss the deadline, most states charge late fees ($25-$200) and may eventually dissolve your LLC. Franchise taxes are a separate annual fee some states charge simply for the privilege of operating as an LLC. California's $800 franchise tax is the most notorious, but Delaware ($300), Nevada ($200), and Alabama ($100) also have them. These are due regardless of whether your LLC made any money.

The Tax Surprise: Self-Employment Tax

This isn't technically an LLC formation cost, but it's the biggest"hidden cost" new LLC owners discover: self-employment tax. As a single-member LLC (or multi-member LLC), your business profits are subject to a 15.3% self-employment tax (12.4% Social Security + 2.9% Medicare) on top of income tax. On $80,000 in profit, that's $12,240 in self-employment tax alone — before federal and state income tax. Many new business owners are shocked by their first quarterly estimated tax payment. This is why many profitable LLCs elect S-corp tax treatment once they earn enough — it can reduce self-employment tax significantly. Use our self-employed tax calculator to estimate your total tax burden.

Accounting and Tax Preparation

A single-member LLC reports on Schedule C, which a competent CPA charges $300-$800 to prepare. A multi-member LLC files Form 1065 (partnership return) plus K-1s for each member, costing $500-$2,000+ depending on complexity. Add bookkeeping software ($0-$60/month for QuickBooks or Wave) and potentially a bookkeeper ($100-$500/month for a small business). Even DIY accounting with free software requires time — time that has an opportunity cost. Budget at least $500/year for tax prep and basic accounting, more if your business has inventory, employees, or multiple revenue streams.

Insurance

An LLC provides liability protection, but it's not a substitute for business insurance. General liability insurance for a small LLC runs $400-$1,500/year. Professional liability (errors & omissions) adds $500-$2,000/year for service-based businesses. If you have employees, workers' compensation insurance is legally required in most states. If you use your car for business, personal auto insurance won't cover business use — you'll need a commercial auto policy or a business-use endorsement. None of these are technically"LLC costs," but they're costs of running a properly protected business. Operating without insurance while relying solely on LLC protection is like wearing a seatbelt but removing the airbags.

The Real 5-Year Cost

Let's add it up for a typical single-member LLC in a moderate-cost state: Year 1: Filing fee ($100) + registered agent ($150) + operating agreement template ($50) + accounting setup ($200) + tax prep ($500) = $1,000. Years 2-5: Annual report ($50) + registered agent ($150) + tax prep ($500) = $700/year × 4 = $2,800. 5-year total: ~$3,800 — and that's without insurance, software, or any state franchise taxes. In California, add $4,000 in franchise taxes. In Massachusetts, add $2,000 in annual reports. The LLC itself is cheap. Running it properly is not.