What it really costs to own an LLC for 5 years
Most LLC cost guides stop at the filing fee. We calculated the mandatory 1-year, 3-year, and 5-year state cost for every U.S. state — formation filing fee + annual report fees + fixed entity-level taxes — sourced directly from each Secretary of State.
Key finding: Montana's $35 filing fee makes it the cheapest to form, but 10 states with no annual report cost less over five years — including some with higher upfront fees.
Key findings
Mandatory state costs only — formation fee + annual reports + fixed entity taxes. Optional costs (registered agent services, legal fees, business licenses) excluded.
- Arizona$50 to form + $0/yr$50
- Mississippi$50 to form + $0/yr$50
- Missouri$50 to form + $0/yr$50
- New Mexico$50 to form + $0/yr$50
- Ohio$99 to form + $0/yr$99
- Idaho$100 to form + $0/yr$100
- California$70 to form + $810/yr$4,120
- Massachusetts$500 to form + $500/yr$3,000
- Nevada$425 to form + $350/yr$2,175
- Delaware$110 to form + $400/yr$2,110
- Tennessee$300 to form + $300/yr$1,800
- Maryland$100 to form + $300/yr$1,600
These states have no annual report and no flat entity-level tax. Your only mandatory state cost is the one-time formation fee.
- Alabama$200 total
- Arizona$50 total
- Idaho$100 total
- Minnesota$155 total
- Mississippi$50 total
- Missouri$50 total
- New Mexico$50 total
- Ohio$99 total
- South Carolina$110 total
- Texas$300 total
A low filing fee doesn’t mean cheap long-term. These states cost more in annual fees over 5 years than they charged to form the LLC.
- California$70 to form$4,120 over 5 yr
- Maryland$100 to form$1,600 over 5 yr
- Kentucky$40 to form$990 over 5 yr
- Arkansas$45 to form$795 over 5 yr
- Massachusetts$3,000 over 5 yr$500
- Nevada$2,175 over 5 yr$425
- Texas$300 over 5 yr$300
- Tennessee$1,800 over 5 yr$300
- Alaska$500 over 5 yr$250
- Alaska$500 over 5 yrAK
- Delaware$2110 over 5 yrDE
- Florida$818.75 over 5 yrFL
- Nevada$2175 over 5 yrNV
- New Hampshire$600 over 5 yrNH
- South Dakota$425 over 5 yrSD
- Tennessee$1800 over 5 yrTN
- Texas$300 over 5 yrTX
- Washington$550 over 5 yrWA
- Wyoming$400 over 5 yrWY
5-year LLC cost index
Sorted by lowest 5-year mandatory state cost. Costs = formation fee + (annual mandatory × 5). Biennial reports counted at half their fee per year. Optional costs (registered agent, legal) excluded.
Formation filing fees, low to high
Each bar represents one state’s standard online filing fee. The spread is wider than most founders expect: Massachusetts costs 14.3× more than Montana to form. But formation fee alone is a poor proxy for long-term cost — see the 5-year index above.
The cheapest state to form in is rarely the cheapest to own
charge nothing after the formation filing — $0 in annual mandatory state costs forever
but $4,120 in mandatory costs over 5 years
average gap between 1-year and 5-year mandatory costs — what recurring fees add over time
Cite or embed on your site
This dataset is released under CC BY 4.0 — free to use, share, and republish with attribution. Suitable for accounting firms, startup resources, university entrepreneurship programs, and business journalists.
LLC State Guide (2026). U.S. LLC 5-Year Cost Index, 2026. Retrieved from https://llcstateguide.com/research/llc-fees-2026/
<iframe src="https://llcstateguide.com/embed/llc-fee-comparison/" width="100%" height="640" frameborder="0" loading="lazy" title="LLC Filing Fees by State (2026)" ></iframe>
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Methodology
What we count as “mandatory cost”
We count only fees a state legally requires every LLC to pay, regardless of revenue or activity:
- Formation filing fee— the state’s standard online Articles of Organization (or equivalent) fee.
- Annual report fee — the mandatory recurring report filed with the Secretary of State. Biennial states (reports due every two years) are counted at half their fee per year to produce a per-year equivalent.
- Fixed entity-level taxes— flat mandatory taxes that apply regardless of revenue. The model includes California’s $800 annual tax, Delaware’s $400 yearly LLC tax, and other fixed charges represented in the underlying state data.
What we exclude
- Registered agent fees — these are commercially set, not state fees, and range from free (self-agent) to $300/yr.
- Revenue-based taxes— Texas franchise tax, Washington B&O tax, Tennessee F&E tax, and similar taxes that depend on gross receipts or profit. These are noted in each state’s individual guide.
- Publication costs— New York, Arizona, and Nebraska require newspaper publication. New York’s requirement can cost $1,000–$2,000+ depending on county.
- California exceptions — the general first-year exemption applied only to tax years beginning in 2021 through 2023. The model includes the $800 annual tax for current formations and does not model fact-specific short-form cancellation or other exceptions.
- Optional costs — legal fees, business licenses, state-specific permits, and similar items that vary by business type and location.
Data sources
Filing fees and annual report requirements were collected directly from each state’s Secretary of State (or equivalent agency) website. Where states offer multiple filing methods, the standard online fee is reported. Sources are linked in the data table above. Data was last verified in August 2026. We re-verify quarterly and immediately when a state announces a fee change.
License
Released under CC BY 4.0. Free to use, share, and republish with attribution.