Cheapest States to Form an LLC in 2026: Ranked by Total First-Year and Ongoing Cost
By Frédéric Deltour, Entrepreneur and Business Consultant, 22+ years forming and operating companies.
Published: May 7, 2026 · Last updated: May 7, 2026
- How we ranked: true total cost methodology
- The 10 cheapest states ranked by 3-year total cost
- States with no annual LLC fee
- All 50 states: filing fee and annual fee at a glance
- The 5 most expensive states
- Hidden costs most lists ignore
- The out-of-state trap: when "cheap" costs more
- When choosing the cheapest state is the wrong move
- FAQ
How We Ranked: True Total Cost Methodology
Each ranking below uses a 3-year total cost that includes: (1) one-time filing fee paid at formation, (2) annual or biennial report fees for years 1, 2, and 3, and (3) a $125/year registered agent fee (Northwest's rate), which every LLC needs. We exclude state income taxes from this ranking because those are determined by where you live and operate, not where you formed, and apply equally regardless of formation state.
Fees are sourced from state Secretary of State websites, verified as of May 2026. State fees change periodically; always confirm before filing.
The 10 Cheapest States Ranked by 3-Year Total Cost
| Rank | State | Filing Fee | Annual Fee | Year 1 Total* | 3-Year Total* | Best For |
|---|---|---|---|---|---|---|
| 1 | New Mexico | $50 | $0 (none required) | $175 | $425 | Zero ongoing fees, privacy |
| 2 | Missouri | $50 | $0 (none required) | $175 | $425 | Zero ongoing fees |
| 3 | Arizona | $50 | $0 (none required) | $175 | $425 | Fast filing, zero annual |
| 4 | Montana | $35 | $20/year | $180 | $470 | Montana residents, no sales tax |
| 5 | Kentucky | $40 | $15/year | $180 | $470 | Kentucky residents |
| 6 | Michigan | $50 | $25/year | $200 | $500 | Michigan residents |
| 7 | Colorado | $50 | $25/year (periodic report) | $200 | $500 | Colorado residents, fast filing |
| 8 | Mississippi | $50 | $0 (report required, no fee) | $175 | $425 | Mississippi residents, no annual fee |
| 9 | Hawaii | $51 | $15/year | $191 | $481 | Hawaii residents |
| 10 | Utah | $59 | $18/year | $202 | $511 | Utah residents |
*Year 1 Total = filing fee + year 1 annual fee + $125 registered agent. 3-Year Total adds 2 more years of annual fee + RA. Mississippi annual report has no filing fee. Fees verified May 2026 from state SOS offices. Always confirm before filing.
States With No Annual LLC Fee
Several states eliminate the annual report fee entirely, dramatically lowering the cost of maintaining an LLC over time. These are the most cost-effective for owners who want to minimize recurring compliance costs:
| State | Filing Fee | Annual Requirement | Annual Fee | Notes |
|---|---|---|---|---|
| New Mexico | $50 | None | $0 | No annual report required at all. Strong privacy protection. |
| Missouri | $50 | None | $0 | No annual report required. No state franchise tax. |
| Arizona | $50 | None | $0 | No annual report required. Fast online filing. |
| Mississippi | $50 | Annual report | $0 | Report required but no filing fee attached. |
| Ohio | $99 | None | $0 | No annual report. Slightly higher upfront fee. |
| South Carolina | $110 | None (most LLCs) | $0 | No annual report for LLCs taxed as partnerships or disregarded entities. |
| Pennsylvania | $125 | Decennial report (every 10 years) | $70 / 10 years | Effectively near-zero ongoing costs. No annual report. |
| Alabama | $200 | None | $0 | Higher upfront fee offsets the $0 annual advantage. |
Selected States: Filing Fee and Annual Fee at a Glance
A selection of states to illustrate the full range of formation and maintenance costs. Average US LLC filing fee in 2026: $132, per aggregated Secretary of State data.
| State | Filing Fee | Annual/Biennial Fee | Notes |
|---|---|---|---|
| Montana | $35 | $20/year | Lowest filing fee nationally |
| Kentucky | $40 | $15/year | 2nd lowest filing fee |
| Arizona / Missouri / New Mexico / Mississippi | $50 | $0 | Best for zero ongoing fees |
| Colorado / Michigan / Hawaii | $50–$51 | $15–$25/year | Low overall cost |
| Wyoming | $100 | $60/year | Best out-of-state option for online businesses |
| Florida | $125 | $138/year | No state income tax; residents should form here |
| Texas | $300 | $0 for most (revenue threshold applies) | High upfront; no annual report for most LLCs |
| California | $70 | $800/year minimum franchise tax | Low filing fee, high ongoing cost |
| Delaware | $90 | $300/year franchise tax | Good only for venture-backed startups |
| Nevada | $425 | $350/year | Overpriced relative to Wyoming for same benefits |
| Massachusetts | $500 | $500/year | Most expensive state overall |
The 5 Most Expensive States
For business owners in these states, cost control means focusing on efficiency and compliance rather than trying to escape to a cheaper state, since foreign qualification would typically cost more than staying put.
| State | Filing Fee | Annual Fee | First Year Total (no RA) | Why It's Expensive |
|---|---|---|---|---|
| Massachusetts | $500 | $500/year | $1,000 | Highest filing fee in the country. Annual report fee matches it. |
| Nevada | $425 | $350/year | $775 | Initial fee includes business license and initial list. High renewals for similar benefits to Wyoming ($160/year). |
| California | $70 | $800+/year | $870+ | Low filing fee is deceptive. The $800 minimum franchise tax is unavoidable regardless of income. |
| Tennessee | $300 | Franchise + excise tax | $300+ | Filing fee is $300. Ongoing costs include 6.5% excise tax on net earnings and 0.25% franchise tax on net worth. |
| Texas | $300 | $0 (below threshold) | $300 | High upfront fee. Franchise tax applies above $2.47M revenue threshold (2026). Most small LLCs owe $0 annually. |
The Out-of-State Trap: When "Cheap" Costs More
This is the single most important point on this page: forming in a cheap state while operating in an expensive one almost always costs more total.
If you live in California and form a New Mexico LLC to save on California's $800 franchise tax, you still need to register that New Mexico LLC as a foreign LLC in California before conducting business there. Foreign LLC registration in California costs $70 plus the $800 franchise tax, plus a California registered agent. You now pay New Mexico fees and California fees.
Your business has no physical presence in any state: no office, no employees, no customers concentrated in one location. You work remotely and truly operate across multiple states or purely online. In that scenario, Wyoming ($100 filing + $60/year + $125/year RA = $285/year) or New Mexico ($50 filing + $0/year + $125/year RA = $125/year after year 1) can be genuinely cheaper than forming in a high-cost home state with no offsetting business benefit.
For 90% of small business owners, the cost-optimization strategy is: form in your home state, choose a low-cost formation service, serve as your own registered agent if privacy is not a concern (to save $125/year), and file annual reports on time to avoid late fees.
After forming 3 LLCs myself and helping clients through the process, I keep coming back to Northwest Registered Agent. Here is why:
- Remarkable Customer Support: Quick, human responses every time.
- Caring & Privacy-Focused: Genuine service with full respect for your privacy.
- Lightning-Fast Formation: Often faster than promised.
- Incredible Value: Prices far below the premium service quality.
- Clear & Transparent: No hidden fees or surprises.
Ready to form your business? Choose Northwest today!
FAQ
What is the cheapest state to form an LLC?
Montana has the lowest filing fee at $35, with a $20/year annual report. For zero ongoing state fees, New Mexico ($50 filing, no annual requirement), Missouri ($50 filing, no annual requirement), and Arizona ($50 filing, no annual requirement) are the cheapest long-term options.
Which states have no annual LLC report or fee?
New Mexico, Missouri, Arizona, Mississippi (report required but no fee), Ohio, South Carolina, and Pennsylvania (decennial report only, every 10 years) have no annual LLC report fee. Alabama also has no annual report but charges $200 to form.
Is it worth forming an LLC in a cheaper state?
Only if you genuinely have no business presence in your home state. If you operate in your home state, foreign LLC registration there negates any savings from forming elsewhere. For truly location-independent businesses, Wyoming or New Mexico can save money long term.
What is the average LLC filing fee in 2026?
The average LLC filing fee across all 50 states and DC in 2026 is approximately $132, per aggregated Secretary of State data. The range is $35 (Montana) to $500 (Massachusetts).
Can I form an LLC for free?
No. Every state charges a filing fee to form an LLC. The minimum is $35 (Montana). Some formation services offer $0 service fees (you pay only the state fee), but the state fee itself is unavoidable. You can minimize costs by filing directly with your Secretary of State and getting your EIN free from IRS.gov.
Related Guides
- Best State to Form an LLC in 2026
- How to Form an LLC: Complete Guide
- Northwest Registered Agent Review 2026
- Registered Agent: Complete Guide
- LLC Formation Cost: What You Actually Pay
Frédéric has founded and operated businesses across multiple countries, including 3 LLCs formed using Northwest Registered Agent. He holds certifications as a holistic coach and therapist trainer, is a published author, and has been featured in Le Parisien, IMDb, Goodreads, and international encyclopedias.
FTC Disclosure: OnlineLLCGuide.com earns affiliate commissions when you use our links. These commissions do not affect our ratings, rankings, or editorial positions. We independently evaluate each service. , OnlineLLCGuide.com
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