Key Summary
- LLC formation costs, including filing and recurring fees, vary by state.
- Several states impose extra fees such as franchise taxes.
- States like Alabama, Georgia, and Tennessee impose a business privilege tax on LLCs. This tax is on the privilege of doing business in that state.
- LLCs are subject to state income tax in certain states, with rates varying. For instance, California’s rate is 8.84%, while North Carolina’s is 5.25%.
- The costs of forming and maintaining a Limited Liability Company (LLC) vary from state to state.
This table provides an overview of the initial filing fees and recurring expenses associated with LLCs in the United States.
| State | Filling Fee | Recurring Fees |
|---|---|---|
| Alabama | $200 | $50 |
| Alaska | $250 | $100 (every 2 years) |
| Arizona | $85 onlinel, $50 by mail Publication fee is required (minimum $30) | $0 (no fee and no information report) |
| Arkansas | $45 online, $50 by mail | $150 Franchise Tax Report (annually) |
| California | $70 | $800 Franchise Tax (annually), $20 Statement of Information (annually) |
| Colorado | $50 | $10 (annually) |
| Connecticut | $120 | $80 (annually) |
| Delaware | $110 | $175 Franchise Tax (annually) |
| Florida | $125 | $138.75 (annually) |
| Georgia | $100 online, $110 by mail, $110 in person | $50 online, $60 by mail (annually) |
| Hawaii | $50 | $15 (annually) |
| Idaho | $100 | $0 (report due annually) |
| Illinois | $150 | $75 (annually) |
| Indiana | $95 online, $100 by mail | $32 online, $50 by mail (report twice a year) |
| Iowa | $50 | $60 (biennial report) |
| Kansas | $160 online, $165 by mail | $55 (annually) |
| Kentucky | $40 | $15 (annually) |
| Louisiana | $100 | $35 (annually) |
| Maine | $175 | $85 (annually) |
| Maryland | $100 | $300 (annually) |
| Massachusetts | $500 | $500 (annually) |
| Michigan | $50 | $25 (annually) |
| Minnesota | $155 online, $135 by mail | $0 (report due annually) |
| Mississippi | $50 | $0 (report due annually) |
| Missouri | $50 online, $105 by mail | $0 |
| Montana | $70 | $20 (annually) |
| Nebraska | $105 | $10 (biennial report) |
| Nevada | $75, plus $150 for the initial list of officers | $150 Annual List of Members & Managers |
| New Hampshire | $100 | $100 (annually) |
| New Jersey | $125 | $75 (annually) |
| New Mexico | $50 | $0 |
| New York | $200 (plus publishing costs) | $9 (every 2 years) |
| North Carolina | $125 | $200 (annually) |
| North Dakota | $135 | $50 (annually) |
| Ohio | $99 | $0 |
| Oklahoma | $100 | $25 (annually) |
| Oregon | $100 | $100 (annually) |
| Pennsylvania | $125 (plus publishing costs) | $70 (decennial report) |
| Rhode Island | $150 | $50 (annually) |
| South Carolina | $110 | $0 |
| South Dakota | $150 | $50 (annually) |
| Tennessee | $300 (minimum) | $300 (minimum) |
| Texas | $300 | $0 report, Franchise Tax |
| Utah | $70 | $20 |
| Vermont | $125 | $35 (annually) |
| Virginia | $100 | $50 (annually) |
| Washington | $200 | $60 (annually) |
| West Virginia | $100 | $25 (annually) |
| Wisconsin | $130 online, $170 by mail | $25 (annually) |
| Wyoming | $100 (mail), $102 (online) | $50 minimum (annually) |
Ongoing Maintenance Expenses
Annual fees and biennial fees are ongoing expenses that LLCs must pay to keep their businesses in compliance and good standing.
The annual fees are paid every year, while the biennial fees are paid every two years. The specific requirements and costs for annual and biennial fees can vary widely depending on the state.
- Alabama: The annual report fee for LLCs in Alabama is $200.
- Alaska: The biennial fee is $100.
- California: The annual report fee for LLCs in California is $800.
- Georgia: The annual report fee for LLCs in Georgia is $50.
- Illinois: The annual report fee for LLCs in Illinois is $75.
- Minnesota: The annual report fee for LLCs in Minnesota is $0, and the biennial fee is $2.
- New York: The biennial fee for LLCs in New York is $9.
- North Carolina: The annual report fee for LLCs in North Carolina is $200.
- Tennessee: $50 per member, with a minimum fee of $300 and a maximum fee of $3000. The franchise tax minimum is $100.
Franchise Tax:
Some states impose a franchise tax, with annual fees ranging from $0 to $300, and annual franchise tax ranging from $10 to $1,000+.
The states that impose a franchise tax for the costs of forming an LLC in 2024 include:
- California: LLCs in California are subject to an $800 annual franchise tax, in addition to a $20 biennial statement of information fee.
- Delaware: LLCs in Delaware are required to pay an annual franchise tax, which starts at $175.
- Tennessee: LLCs in Tenessee are subject to a $250 franchise tax.
- Texas: LLCs in Texas are subject to an annual franchise tax, with a minimum tax of $0 for most LLCs, but additional reports must be filed.
Business Privilege Tax:
Some states impose a business privilege tax on LLCs, which is a tax on the privilege of doing business in the state. The tax is based on the LLC’s net worth or capital, and the minimum tax is $100. Here are the business privilege tax costs for some of the states that impose them:
- Alabama: The business privilege tax in Alabama is a minimum of $100 for LLCs.
- Georgia: Georgia imposes an annual $50 to $100 tax on LLCs.
- Tennessee: Tennessee imposes an annual $100 franchise tax and excise tax on LLCs.
State Income Tax
LLCs are pass-through entities, which means that the profits and losses of the LLC are passed through to the owners and reported on their personal income tax returns. Some states impose a state income tax on LLCs, while others do not.
State Income Tax Rates for LLCs in 2024:
- Colorado: 4.63%
- California: 8.84%
- Georgia: 5.75%
- Illinois: 9.49%
- Minnesota: 9.85%
- New York: 6.85%
- North Carolina: 5.25%
- Tennessee: 6.5%
- Virginia: 6.0%
Registered Agent Costs
The average cost of hiring a registered agent service is between $150 to $300 annually.
The costs of forming an LLC, including registered agent fees, vary by state:
- Arizona: Registered agent service fees in Arizona range between $100 and $300 annually.
- Alaska: The cost of a registered agent service in Alaska may be as much as $250 annually.
- California: Registered agent service fees in California range between $100 and $300 annually.
- Colorado: Registered agent service fees in California range between $50 and $300 annually.
- Florida: Registered agent service fees in Florida range from $50 to $300 annually.
- Texas: Registered agent service fees in Texas range from $50 to $300 annually.
- Massachusetts: Registered agent service fees in Massachusetts range between $100 and $150 annually.
Operating Agreement
An operating agreement is a legal document that outlines the ownership and operating procedures of an LLC. It is not required by all states, but it is highly recommended to have one in place to avoid potential conflicts and legal issues. The cost of an operating agreement can vary depending on whether you create it yourself or hire a professional to draft it for you.
It’s important to note that there are no states that require a fee to file an operating agreement. If you are forming a business in one of the five states that do mandate one, you’ll only pay the fee to file Articles of Organization, which is the document you submit to the state to form and register your LLC.
The following states require LLCs to pay an annual fee for their operating agreement:
- Arizona: Anywhere from $50 to $200.
- California: The annual fee is $50-$200, and it is paid every year.
- Colorado: The annual fee is between $100 – $500.
- New York: The annual fee is $20, and it is paid every year.
- Wyoming: The annual fee is $50, and it is paid every year.
Sources for LLC Formation Forms
These forms are typically referred to as ‘Articles of Organization’ or ‘Certificates of Organization’.
- Obtain LLC organization forms from your state’s Secretary of State website, legal and financial experts, or online services.
- State-Specific Forms: Some states offer fillable online forms; ensure you use the correct form for your state as requirements and formatting may vary.
- Filing Process: After completing the form, file it with the appropriate state office to officially establish your LLC.
Publication
Certain states in the U.S. have specific publication requirements and associated fees for LLCs during the formation stage. These states include Arizona, New York, and Nebraska. The table below outlines the costs and requirements in each of these states, providing a quick reference for potential LLC formation expenses.
LLC Publication Requirements and Costs in the Selected States (2024)
| State | Publication Requirement Details | Cost Range | Additional Notes |
|---|---|---|---|
| Arizona | Public notices of formation in one or more newspapers | $40 to $2,000 | Costs vary based on publication and notice content |
| Nebraska | Public notices of formation in one or more newspapers | $40 to $2,000 | Costs vary based on publication and notice content |
| New York | Public notices of formation in one or more newspapers | $30 to $300 | Costs vary based on publication and notice content |
DBA Fees
The process for obtaining a ‘doing business as’ (DBA) license for an LLC typically involves the following steps:
- Name Search: Before applying for a DBA, it’s important to conduct a name search to ensure that the desired business name is available and compliant with state regulations.
- DBA Application: Once the name is confirmed as available, the next step is to complete and submit a DBA application to the appropriate state or local government office. The application may require details such as the LLC’s legal name, the proposed DBA name, the nature of the business, and the address of the LLC.
- Filing Fee: There is usually a filing fee associated with the DBA application, which can vary by state and local jurisdiction. The fee typically ranges from $10 to $100, but the specific amount depends on the location.
| State | Filing Fee | Frequency | Additional Notes |
|---|---|---|---|
| Alabama | $50 minimum | Annual fee | Costs vary based on publication and notice content |
| Alaska | $25 | Biennial fee | Costs vary based on publication and notice content |
| Arizona | $10 | Costs vary based on publication and notice content | |
| Arkansas | $150 | Annual fee | |
| California | $0 | ||
| Colorado | $10 | Annual fee | |
| Connecticut | $80 | Annual fee | |
| Delaware | $25 | - | |
| Florida | $125 | Annual fee | |
| Georgia | $50 | Annual fee | |
| Hawaii | $15 | Annual fee | |
| Idaho | $0 | ||
| Illinois | $75 | Annual fee | |
| Indiana | $30 | Biennial fee | |
| Iowa | $45 | Biennial fee | |
| Kansas | $55 | Annual fee | |
| Kentucky | $15 | Annual fee | |
| Louisiana | $35 | Annual fee | |
| Maine | $85 | Annual fee | |
| Maryland | $300 | Biennial fee | |
| Massachusetts | $500 | Annual fee | |
| Michigan | $25 | Annual fee | |
| Minnesota | $0 | ||
| Mississippi | $50 | Annual fee | |
| Missouri | $0 | ||
| Montana | $20 | Annual fee | |
| Nebraska | $10 | Annual fee | |
| New Hampshire | $100 | Annual fee | |
| New Jersey | $50 | Annual fee | |
| New Mexico | $0 | ||
| New York | $0 | ||
| North Carolina | $200 | Annual fee | |
| North Dakota | $50 | Annual fee | |
| Ohio | $0 | ||
| Oklahoma | $25 | Annual fee | |
| Oregon | $100 | Annual fee | |
| Pennsylvania | $7 | Annual fee | |
| Rhode Island | $50 | Annual fee | |
| South Carolina | $0 | Annual fee | |
| Tennessee | $300 | Annual fee | |
| Texas | $0 fee | ||
| Utah | $18 | Annual fee | |
| Vermont | $50 | Biennial fee | |
| Virginia | $50 | Annual fee | |
| Washington | $60 | Annual fee | |
| West Virginia | $25 | Annual fee | |
| Wisconsin | $25 | Annual fee | |
| Wyoming | $50 | Annual fee |
- Renewal: DBAs are typically valid for a specific period, often between 5 to 10 years, after which they must be renewed. The renewal process usually involves submitting a renewal application and paying a renewal fee.
Frequently Asked Questions
How Much Can an LLC Write Off?
LLCs can leverage various tax deductions. Notably, they can write off car expenses if the vehicle is used for business, using either the standard mileage rate or the actual expense method. However, car payments themselves are not directly deductible.
Can You Write Off Car Payments for Your LLC?
While direct car payments aren’t deductible, LLCs can claim deductions on car expenses related to business use, such as depreciation. Bonus depreciation rules also allow for significant upfront deductions.
What are the tax implications for an LLC that isn't profitable?
Even if an LLC isn’t profitable, it faces tax implications due to its pass-through nature. Losses incurred by the LLC can offset other income on tax returns. However, maintaining good standing and effective financial management is crucial.
What types of business licenses and permits are required for LLCs in 2024?
The required licenses and permits for LLCs can vary based on the state, business type, and location. Common types include General Business Licenses, DBA Licenses, Professional or Occupational Licenses, Industry-Specific Permits, Home Occupation Permits, Sales Tax Permits, Fire Department Permits, and Zoning Permits.
Are professional licenses important for all LLCs?
Professional or Occupational Licenses are necessary for LLCs in certain professions like medicine, law, accounting, and contracting, where specific qualifications are mandatory to practice.
Final Thoughts: Strategically Planning Your LLC Journey in 2024
Starting an LLC in 2024 is an exciting journey, filled with opportunities for entrepreneurs. While each state has its own set of guidelines, including filing fees, recurring charges, and taxes, there’s no need to worry
Let’s navigate this adventure together. Book a free consultation today to start your LLC registration.
