State LLC Tax Guide: What You Owe in Each State
Oct 29, 2025
Running an LLC feels simple until tax season comes. Every state has its own rules, fees, and deadlines, and figuring out what you actually owe can feel like learning different languages.
Some states barely charge a thing. Others treat your LLC like a recurring subscription you didn’t mean to renew. This guide breaks down what LLCs owe in each state for 2025, including filing fees, annual costs, and tax rates, plus tips for businesses operating in more than one state.
Let’s make sense of where your LLC money really goes and how you can keep more of it.
Quick Overview: The Taxes and Fees an LLC Pays by State
In most states, LLCs pay three main costs:
A one-time formation fee when you register.
An annual (or biennial) report fee to stay active.
Possible state-level taxes like franchise or gross-receipts taxes.
LLCs are typically “pass-through” entities, meaning income flows to the owners’ personal tax returns. But states can still charge separate entity-level taxes or fees just for existing.
Here’s a breakdown of what most LLCs might owe:
Formation filing fee: Paid once when you form the LLC. Ranges from about $40 (Kentucky) to over $500 (Massachusetts).
Annual or biennial report fee: Required to keep your LLC in good standing. Usually $20–$300.
Franchise or privilege tax: A recurring state fee, sometimes based on revenue or net worth (California, Texas, Tennessee, etc.).
Gross-receipts or commerce tax: A percentage of your total revenue, not profit (seen in states like Washington, Nevada, and Ohio).
Sales and payroll taxes: Required if you sell taxable goods/services or have employees.
Local business taxes: City or county fees that vary by location.
How State LLC Taxes Actually Work
Most LLCs don’t pay income tax directly, but that doesn’t mean they pay nothing.
By default, an LLC’s profits “pass through” to its owners, who then pay federal and state income taxes personally. Still, some states charge LLCs their own taxes or minimum annual fees to operate.
Pass-Through vs. Entity-Level Taxation
Pass-through: Your LLC’s profits show up on your personal state return.
Entity-level: The state bills the LLC itself (e.g., California’s $800 annual minimum).
You can also elect for your LLC to be taxed as an S-Corp or C-Corp, but even then, state rules still apply.
Understanding “Nexus”
If your business operates, hires, or sells in a state, you may have nexus—a taxable connection. That means you might owe taxes or need to register there, even if you formed the LLC somewhere else.
50-State Summary: LLC Filing Fees and State-Level Taxes
Below is a simplified overview of each state’s filing fees, annual reports, and whether they charge any LLC-level taxes. Always verify with your state’s Department of Revenue before filing—rates can change yearly.
State | Formation Fee | Annual/Biennial Fee | LLC-Level Tax | Notes |
Alabama | $200 | $100 | Yes | Annual business privilege tax ($100 min). |
Alaska | $250 | $100 (biennial) | No | No franchise tax. |
Arizona | $50 | $0 | No | Low-cost state, no annual fee. |
Arkansas | $45 | $150 | No | Flat annual franchise tax. |
California | $70 | $800 (min) | Yes | $800 min + gross receipts fee. |
Colorado | $50 | $10 (annual) | No | Low annual report fee. |
Connecticut | $120 | $80 (annual) | No | Moderate annual report fee. |
Delaware | $90 | $300 (flat) | Yes | Annual franchise tax on LLCs. |
Florida | $125 | $138.75 | No | Annual report required. |
Georgia | $100 | $50 (annual) | No | Annual registration fee. |
Hawaii | $50 | $15 (annual) | No | Low ongoing fees. |
Idaho | $100 | $0 | No | Free annual report filing. |
Illinois | $150 | $75 (annual) | No | Standard fees. |
Indiana | $100 | $50 (biennial) | No | Biennial report filing. |
Iowa | $50 | $45 (biennial) | No | Simple filing structure. |
Kansas | $160 | $55 (annual) | No | Flat annual report fee. |
Kentucky | $40 | $15 (annual) | No | Very low costs. |
Louisiana | $100 | $35 (annual) | No | Moderate cost state. |
Maine | $175 | $85 (annual) | No | No franchise tax. |
Maryland | $100 | $300 (annual) | No | Higher annual report fee. |
Massachusetts | $500 | $500 (annual) | No | One of the most expensive states. |
Michigan | $50 | $25 (annual) | No | Affordable compliance. |
Minnesota | $155 | $0 | No | No annual fee. |
Mississippi | $50 | $0 | No | Free annual report. |
Missouri | $50 | $0 | No | No annual report. |
Montana | $70 | $20 (annual) | No | Low-cost, no sales tax. |
Nebraska | $100 | $10 (biennial) | No | Easy maintenance. |
Nevada | $425 | $350 (annual) | Yes | Business license + commerce tax. |
New Hampshire | $100 | $100 (annual) | Yes | Business profits and enterprise tax. |
New Jersey | $125 | $75 (annual) | Yes | Minimum business tax. |
New Mexico | $50 | $0 | No | No annual report fee. |
New York | $200 | $9–$4,500 (based on income) | Yes | LLC filing fee tiers. |
North Carolina | $125 | $200 (annual) | No | Annual report required. |
North Dakota | $135 | $50 (annual) | No | Reasonable annual fee. |
Ohio | $99 | $0 | Yes | Commercial Activity Tax (CAT). |
Oklahoma | $100 | $25 (annual) | No | Simple reporting. |
Oregon | $100 | $100 (annual) | Yes | State-level minimum tax. |
Pennsylvania | $125 | $0 | No | Annual report starts in 2025. |
Rhode Island | $150 | $50 (annual) | Yes | $400 min franchise tax. |
South Carolina | $110 | $0 | No | No annual LLC fee. |
South Dakota | $150 | $50 (annual) | No | No income or franchise tax. |
Tennessee | $300 | $300 (min) | Yes | Franchise & excise taxes. |
Texas | $300 | $0 | Yes | Franchise (margin) tax over threshold. |
Utah | $70 | $20 (annual) | No | Simple and affordable. |
Vermont | $125 | $35 (annual) | No | Low ongoing fees. |
Virginia | $100 | $50 (annual) | No | Annual registration fee. |
Washington | $200 | $60 (annual) | Yes | B&O gross-receipts tax. |
West Virginia | $100 | $25 (annual) | No | Straightforward requirements. |
Wisconsin | $130 | $25 (annual) | No | No franchise tax for LLCs. |
Wyoming | $100 | $60 (annual) | No | Low cost and business-friendly. |
Notable States: The Ones That Can Surprise You
California
Every LLC registered or doing business in California must pay $800 each year, even with no income. On top of that, if your LLC earns over $250,000, you pay an extra gross-receipts fee (from $900 to $11,790).
Delaware
Delaware charges a flat $300 annual LLC tax due June 1. It’s popular for legal reasons, not tax savings—most small businesses still owe taxes where they actually operate.
Texas
Texas has no personal income tax but collects a franchise (margin) tax from LLCs above a certain revenue threshold (around $2.47 million for 2025). Below that, you file a “no tax due” return.
Washington and Ohio
Both charge gross-receipts taxes instead of income taxes. Washington’s B&O tax applies to all revenue, while Ohio’s CAT hits businesses with over $6 million in annual receipts (after 2025).
Nevada
No income tax, but the Commerce Tax kicks in when annual gross receipts exceed $4 million. You’ll also pay annual business license and filing fees.
Wyoming, South Dakota, and Florida
These are the most LLC-friendly states: no income tax, low fees, and simple reporting.
How to Estimate Your LLC’s State Tax Bill
To estimate what you’ll owe:
Check where you have nexus. If you sell or have employees in a state, you likely owe something there.
Add your filing and annual fees. These are easy to find in the table above.
Look for franchise or gross-receipts taxes. Check if your revenue exceeds the minimum threshold.
Include sales and payroll taxes. Register for collection if you sell taxable goods or have staff.
Keep track of due dates. Many states charge penalties for late annual reports or missed franchise payments.
State LLC Tax Comparison: Choosing Where to Form
Forming your LLC in a “tax-free” state doesn’t mean you avoid taxes.
If you live or do business in another state, you’ll still owe taxes there. For example, a California resident who forms an LLC in Wyoming must still pay California’s $800 tax if they operate from California.
When it makes sense to form out of state
You plan to raise outside capital or have investors who expect Delaware.
You operate online with no physical presence in any state.
You have multiple entities or subsidiaries.
When it doesn’t
You run a local service business (retail, consulting, etc.).
You’d need to register as a “foreign LLC” anyway—paying two states instead of one.
Compliance Checklist: Avoid Common State LLC Mistakes
Keep this checklist handy to stay in good standing everywhere you operate.
✅ File your annual or biennial report on time.
✅ Pay franchise or privilege taxes where required.
✅ Register for sales tax collection if you sell taxable goods/services.
✅ Set up state payroll accounts if you have employees.
✅ Maintain a registered agent in each state where you operate.
✅ Calendar renewal deadlines for each jurisdiction.
✅ Consult a CPA if you operate across multiple states.
Final Thoughts
Running an LLC doesn’t have to mean getting lost in state tax codes. Once you know your filing fees, annual obligations, and where your business truly operates, staying compliant is straightforward. Use this guide to plan ahead, budget your state fees, and keep your LLC in good standing—no matter where you do business.
Before you decide where to form your LLC or how to handle state taxes, it’s worth revisiting the bigger question of structure. If you’re still deciding whether to operate as an LLC or elect S-Corp taxation, check out our detailed guide on choosing the right business structure: LLC vs S-Corp to see which setup fits your goals and tax strategy best.
Frequently Asked Questions
How much tax does an LLC pay in each state?
It depends. Some states charge a flat annual fee, others add franchise or gross-receipts taxes. Check the 50-state table above to compare exact costs.
Which states have no LLC taxes?
Wyoming, South Dakota, and Nevada are often considered the most tax-friendly. They have no personal income tax and low annual fees, though Nevada does have a gross-receipts-based Commerce Tax.
What is the cheapest state to form an LLC?
Kentucky, Arkansas, and Arizona have some of the lowest filing and annual fees. But your actual tax cost depends on where you operate—not just where you form.
Do all states charge annual LLC fees?
Almost all do, though a few like Missouri and New Mexico have no recurring annual report fee. Always file on time to avoid dissolution.
How do state LLC taxes compare to federal taxes?
State LLC taxes are separate. The IRS taxes your income at the federal level, while states can charge their own fees, minimums, or revenue-based taxes.
Which states are most tax-friendly for LLCs?
Wyoming, South Dakota, and Florida consistently rank high for low fees, no personal income tax, and simple reporting.
Do I pay taxes in every state my LLC operates in?
Yes—if you have nexus (like employees, property, or sales), you must register and file taxes in those states. It’s not about where you formed but where you do business.
Can I form an LLC in a different state from where I do business?
Yes, but it’s not always cheaper. If you form an LLC in one state but operate in another, you’ll likely need to register as a “foreign LLC” and pay fees in both states.
How do pass-through taxes work for LLCs?
LLCs are typically “pass-through” entities, meaning profits and losses go directly to owners’ personal tax returns. The state taxes those profits based on personal income tax rates, not corporate ones.
Are online businesses taxed differently by state?
Generally, no. Even if your LLC operates entirely online, you owe taxes where your business has a physical or economic presence—such as inventory, employees, or significant sales in a state.