The 3 questions to ask when comparing states
Cheaper isn’t always better. Three factors usually decide which state actually fits your situation:
- Where do you actually operate? If you have customers, employees, or physical operations in a state, you have to register there as a foreign LLC even if you formed elsewhere. That doubles your fees. The "form in Wyoming to save money" strategy fails for most operating businesses.
- What matters more — upfront cost or ongoing cost? Some states are cheap to form but expensive to keep (Massachusetts: $500 + $500/yr). Others are mid-priced to form but free to maintain (Ohio: $99 + $0). Run the math over 5 years, not just year 1. Use our LLC cost calculator.
- Do you need anonymity, asset protection, or fundraising-readiness? If you need asset protection, Wyoming. If you need anonymity, Wyoming or New Mexico. If you need VC funding, Delaware. If you just want the cheapest LLC for a side hustle, your home state (or Missouri / Ohio if you have no home-state operations).
Popular comparisons
The pairs people search for most:
- Wyoming vs Delaware vs New Mexico (anonymous LLC)
- Wyoming vs Delaware vs Nevada (holding company)
- All 50 states ranked by filing fee
- LLC vs S-Corp vs C-Corp (entity type, not state)
State comparison FAQ
What's the difference between Wyoming and Delaware for an LLC?
Wyoming: $100 filing, $60 annual report, no state income tax, strongest single-member-LLC charging-order protection. Delaware: $110 filing, $300 annual franchise tax (no separate annual report), no state income tax for non-DE income, Court of Chancery for sophisticated disputes. Wyoming is cheaper and better for solo owners; Delaware is the standard for VC-backed startups and complex Operating Agreements.
Should I form my LLC in Texas or Florida?
Both have no personal income tax. Texas: $300 filing fee, no annual report fee (mandatory Public Information Report filing required), franchise tax only above $2.47M revenue. Florida: $125 filing fee, $138.75 annual report due May 1 (with brutal $400 late penalty). For a solo founder living in either state, the home state usually wins. For an out-of-state founder, Florida's lower filing fee and Texas's higher franchise-tax threshold make them comparable.
Which is cheaper long-term: Wyoming or New Mexico?
New Mexico is cheaper on paper: $50 filing fee, $0 annual report (just a registered-agent fee). Wyoming: $100 filing, $60/year minimum annual report, plus RA. So NM saves you ~$60–$110/year. The trade-off: Wyoming has stronger asset-protection statutes (charging-order protection for single-member LLCs). For pure cost minimization choose NM; for asset protection choose Wyoming.
Is Nevada really better than Wyoming for asset protection?
Slightly stronger reverse-veil-piercing protections in Nevada, but Wyoming has equally strong charging-order protection and is significantly cheaper. Nevada: $425 to form (filing + Initial List + State Business License) and $350/year ongoing. Wyoming: $100 to form, $60/year. For 99% of asset-protection use cases, Wyoming offers comparable protection at a fraction of the cost. Nevada makes sense if you actually operate in Nevada or have a specific reason for the State Business License regime.
Does the state I form in affect my federal taxes?
No. Federal tax treatment is identical regardless of state — an LLC taxed as a sole proprietorship in Wyoming is taxed exactly the same federally as an LLC taxed as a sole proprietorship in California. The state choice only affects state-level taxes (income, franchise, sales) and where you have to register/file paperwork.
Can I form in one state and operate in another?
Yes, but you'll pay both states. If you form a Wyoming LLC but actually do business in California, California treats your Wyoming LLC as a foreign LLC and charges $800/year — PLUS Wyoming's $60/year annual report. You pay both. The "form in a cheap state" trick only works for true holding companies with no operations in your home state.