State-by-state LLC formation cost comparison for 2026: Which states offer the lowest filing fees and ongoing compliance costs

LLC Formation Cost Comparison by State 2026: Cheapest Filing Fees and Ongoing Costs

The cheapest states to form an LLC in 2026 are Kentucky ($40 filing fee, $15 annual report), Colorado ($50 filing fee, no annual report fee), Montana ($35 filing fee, $20 annual renewal), and New Mexico ($50 filing fee, no annual report required). Wyoming charges $100 upfront but has zero state income tax, making it cost-competitive long-term.

State-by-State LLC Formation Filing Fees Comparison 2026

LLC formation costs vary dramatically from state to state. You could pay as little as $35 to register your business in Montana or face a $500 filing fee in Massachusetts. That gap represents real money — especially for early-stage entrepreneurs who are watching every dollar.

Understanding the full cost picture requires looking at two separate buckets: the one-time state filing fee to officially form your LLC, and the recurring annual or biennial fees to keep your LLC in good standing. Both matter, and ignoring either one leads to budget surprises down the road.

Here’s a broad breakdown of formation filing fees across major states for 2026:

• Montana: $35 one-time filing fee
• Kentucky: $40 one-time filing fee
• Colorado: $50 one-time filing fee
• New Mexico: $50 one-time filing fee
• Arkansas: $50 one-time filing fee
• Michigan: $50 one-time filing fee
• Wyoming: $100 one-time filing fee
• Florida: $125 one-time filing fee
• Delaware: $90 one-time filing fee
• Texas: $300 one-time filing fee
• California: $70 filing fee (plus $800 minimum annual franchise tax)
• Massachusetts: $500 one-time filing fee
• Nevada: $75 filing fee (plus significant initial list fees totaling $350+)

These numbers only tell part of the story. To get your real total cost of ownership, use the LLC cost calculator at llccostcalc.com to model your specific situation over a 1, 3, or 5-year window.

What Makes Filing Fees Vary So Much Between States?

State filing fees are set by individual state legislatures and secretaries of state. They reflect a combination of administrative processing costs, state budget priorities, and in some cases, deliberate policy decisions to attract or deter business formation. States like Delaware have built entire industries around business formation services, while others like Massachusetts use higher fees as a mild revenue tool.

Cheapest States for LLC Formation (Under $100)

If minimizing upfront costs is your priority, several states stand out as genuinely affordable in 2026.

Montana: Lowest Filing Fee in the Nation

At just $35 to file Articles of Organization, Montana offers the lowest raw filing fee of any U.S. state. Annual report fees run $20. For a solo business owner with no Montana customers or operations, forming here as a foreign entity in your home state adds cost — but for Montana residents, this is a strong value proposition.

Kentucky: Affordable and Predictable

Kentucky charges $40 to form an LLC and just $15 annually for its annual report fee. That’s a five-year total of only $115 in state fees alone — making it one of the most budget-friendly states for ongoing compliance as well as initial formation.

Colorado: Low Filing, No Annual Report Fee

Colorado’s $50 filing fee is competitive, and the state’s periodic report fee is minimal at $10. Colorado has a growing business-friendly reputation with a moderate tax environment, making it attractive for remote entrepreneurs who want a legitimate low-cost home state.

New Mexico: The Hidden Gem for No Annual Reports

New Mexico charges $50 to file and — critically — has no annual report requirement for LLCs. That means once you’re formed, your only recurring state obligation is keeping your registered agent current. For passive holding companies or single-member LLCs with minimal activity, this structure dramatically reduces administrative burden and cost.

Wyoming: Best for Asset Protection Under $150

Wyoming’s $100 filing fee is slightly higher than the others on this list, but its annual report fees are based on assets located in Wyoming — often resulting in a $60 minimum fee for most small businesses. Wyoming also has no state income tax, strong charging order protections, and allows anonymous LLC membership. For many entrepreneurs, the combination of low ongoing costs and legal protections makes Wyoming the overall best value.

Annual Compliance and Renewal Costs by State

The filing fee is a one-time expense. Annual compliance costs are forever — or at least as long as your LLC exists. This is where states like California and Nevada reveal their true cost of ownership.

• California: $800 minimum franchise tax every year, regardless of revenue or profit. New LLCs got a first-year exemption in recent years, but the ongoing burden is significant.
• Nevada: Charges an annual state business license fee of $200 plus an annual list fee of $150, totaling $350 per year in mandatory state fees.
• Delaware: $300 annual franchise tax for LLCs (flat fee), which is moderate but worth noting for a state often marketed as a business paradise.
• Florida: $138.75 annual report fee — affordable, but Florida’s warm business climate comes with its own tradeoffs.
• Texas: No state income tax, but an annual franchise tax applies to LLCs with revenue over $2.47 million (2026 threshold). Most small LLCs pay $0 in franchise tax but must still file a No Tax Due report.
• New York: Requires a publication requirement costing $1,000–$2,000 in some counties (like New York and Bronx counties), plus a $25 biennial statement fee. Total first-year costs can exceed $1,500 in certain counties.

Want to model these numbers for your own state? The LLC cost calculator can estimate your 5-year total compliance cost based on your home state and business type.

Hidden Fees and Ongoing Expenses to Consider

Beyond state filing fees and annual reports, several other costs add up for LLC owners that are easy to overlook during the formation phase.

Registered Agent Fees

Every LLC must maintain a registered agent in its state of formation. You can serve as your own registered agent if you’re a resident, but many business owners use a professional service for privacy and reliability. Professional registered agent services typically cost $49–$299 per year depending on the provider.

Foreign LLC Registration

If you form your LLC in Wyoming or Delaware but actually operate in California or New York, you’ll need to register as a foreign LLC in your operating state — and pay that state’s fees too. This doubles your compliance obligations and often negates the savings of forming in a “cheap” state.

Operating Agreement Drafting

While not a state fee, a professionally drafted operating agreement typically costs $150–$500 from an attorney or $0–$99 from online services. Some states require them; all LLCs benefit from them.

EIN and Federal Requirements

Obtaining an Employer Identification Number (EIN) from the IRS is free when done directly through the SBA’s business registration guidance. Third-party services charge $50–$299 for this service unnecessarily.

How to Calculate Total LLC Ownership Costs

The smartest way to compare states isn’t to look at filing fees alone — it’s to calculate the total cost of LLC ownership over a realistic time horizon. Here’s a simple framework:

1. Year 1 Cost: Filing fee + registered agent fee + operating agreement + any first-year publication or license fees
2. Annual Recurring Cost: Annual report fee + registered agent renewal + any state franchise or privilege taxes
3. 5-Year Total: Year 1 Cost + (Annual Recurring Cost × 4)

Using this model, a Wyoming LLC for a small business owner might cost $100 (filing) + $150 (registered agent) + $60 (annual report) = $310 in Year 1, then $210/year after that — totaling $1,150 over five years.

Compare that to a California LLC: $70 (filing) + $800 (franchise tax) + $150 (registered agent) = $1,020 in Year 1, then $950/year — totaling $4,820 over five years.

Run your own numbers with the LLC cost calculator to get a personalized estimate based on your state and business profile.

Best States for LLC Formation Based on Budget

According to SBA guidance on choosing a business structure, the right formation state depends on where you actually conduct business — not just where fees are lowest. That said, for pure cost optimization:

• Best for lowest total 5-year cost: New Mexico (no annual reports)
• Best for asset protection + low taxes: Wyoming
• Best for operational simplicity: Kentucky or Colorado
• Best for active businesses in their home state: Form in your home state to avoid double registration costs
• Avoid purely for the brand reputation: Delaware and Nevada are often marketed aggressively but rarely offer real advantages for small LLCs with no investors

Frequently Asked Questions

What is the cheapest state to form an LLC?

Montana has the lowest raw filing fee at $35, followed by Kentucky at $40. However, New Mexico is often considered the cheapest overall because it charges $50 to form and has no annual report requirement, meaning your ongoing state fees are essentially zero beyond your registered agent.

Which states have no annual LLC fees?

New Mexico has no annual report requirement for LLCs, making it unique among U.S. states. Ohio eliminated its annual report requirement for LLCs as well. Arizona requires an annual report only for PLLCs. Most other states require some form of annual filing, ranging from $10 (Colorado) to $800+ (California’s franchise tax).

How much does it cost to form an LLC in each state?

Filing fees range from $35 (Montana) to $500 (Massachusetts). The national average state filing fee sits around $100–$130. However, total first-year costs including registered agent, operating agreement, and any additional state fees typically range from $200 to $2,000+ depending on the state.

What are the ongoing costs of maintaining an LLC by state?

Ongoing costs include annual report fees (ranging from $0 in New Mexico to $800+ in California), registered agent fees ($49–$299/year), and any state-specific taxes or licenses. In high-cost states like California and Nevada, annual compliance costs frequently exceed $500 per year even for small, low-revenue LLCs.

Do all states require annual reports for LLCs?

No. New Mexico and Ohio do not require LLCs to file annual reports. Most other states do require some form of periodic filing — either annually or biennially — to confirm the LLC’s continued existence and update registered agent or member information. Failure to file typically results in late fees, penalties, or administrative dissolution of the LLC.

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