LLC Annual Fees by State (Guide)

Starting an LLC is one of the smartest moves for protecting your business—but many people only think about the startup cost and forget about ongoing state fees.

If you’re planning to form or already own an LLC, understanding annual fees is critical. These fees vary significantly by state and can directly impact your long-term costs.

In this guide, you’ll learn:

• What LLC filing fees are
• What annual LLC fees mean
• How much each state charges (2026 updated)
• Important warnings most people ignore
• Answers to common questions

What Is the LLC Filing Fee?

The LLC filing fee is a one-time payment you make when registering your business with the state.

Think of it as your startup cost—this is the fee required to legally create your LLC.

Example:

• Texas: $300 (one-time)
• California: $70 (one-time)

Once paid, your LLC is officially formed.

What Is the LLC Annual Fee?

After forming your LLC, most states require you to pay an ongoing yearly (or sometimes every 2 years) fee.

This is often called:

• Annual Report
• Franchise Tax
• Business Privilege Tax
• Biennial Report
• Periodic Report

Even though the names differ, the purpose is the same:
To keep your LLC active and compliant with state laws.

Important Rule:

You must pay this fee even if your business:

• Makes zero income
• Has no activity
• Is temporarily inactive

If you don’t pay:

• Your LLC can be penalized
• Eventually dissolved (closed) by the state

This happens in most states if you miss deadlines.

Average LLC Annual Cost (2026)

As of 2026, the average annual LLC fee in the U.S. is around $91.

However, the actual cost can range from:

• $0 (no annual fee)
  to
• $800+ per year (California)

Important Warning Before Choosing a State

Many beginners try to save money by forming an LLC in a “cheap” state like Wyoming or Delaware.

This can backfire.

If you operate your business in another state:

• You may need to register as a Foreign LLC
• This means:
  • Paying fees in two states
  • Filing two reports
  • More compliance work

In most cases, the best option is:
Form your LLC in the state where you actually live or operate.

LLC Annual Fees by State (2026)

Should You Hire a Filing Service?

Using a professional LLC filing service doesn’t speed up state approval but ensures:

• Proper paperwork submission
• Compliance with state rules
• Privacy protection (some services use their address to keep yours off public records)

If you want expert help, our team at TaxPills LLC can guide you through the entire process and make sure everything is filed correctly.

We help business owners with:

• LLC formation and registration
• EIN application guidance
• Registered agent setup
• Compliance and filing support

If you’d like help starting your LLC quickly and correctly, you can contact our team directly on WhatsApp.

 Chat with us on WhatsApp

Here’s a simplified and easy-to-read breakdown:

States With No Annual Fee

These states either don’t charge or only require a free report:

• Arizona – No fee, no report
• Missouri – No fee, no report
• New Mexico – No fee, no report
• Ohio – No fee, no report
• Texas – $0 (but must file report)
• Idaho – $0 (report required)
• Minnesota – $0 (report required)
• Mississippi – $0 (report required)

Best for low-cost maintenance.

States With Low Fees ($1 – $50)

• Hawaii – $15
• Kentucky – $15
• Utah – $18
• Montana – $20
• Colorado – $25
• Michigan – $25
• Oklahoma – $25
• Wisconsin – $25
• Indiana – $30 (biennial)
• Iowa – $30 (biennial)
• Nebraska – $13 (biennial)
• Pennsylvania – $7

Ideal for budget-conscious entrepreneurs.

States With Medium Fees ($50 – $150)

• Alabama – $50 minimum
• Georgia – $60
• Wyoming – $60 minimum
• Washington – $60
• Vermont – $45
• Kansas – $50
• Virginia – $50
• Arkansas – $150
• Maine – $85
• Oregon – $100
• Alaska – $100

High-Fee States ($150+)

• California – $800 + additional fee
• Delaware – $300
• Nevada – $350
• Maryland – $300
• Tennessee – $300 minimum
• Massachusetts – $500

These states can significantly increase long-term costs.

Filing Frequency

Depending on the state, you may need to file:

• Annually (every year) → Most common
• Biennially (every 2 years) → Example: Indiana, Iowa
• No filing required → Some states

Make sure you track your due date, which is usually:

• Anniversary month
• Fixed date (like April 15 or May 1)

What Happens If You Don’t Pay?

If you ignore your annual fee:

1. Late penalties are added
2. Your LLC may lose “good standing”
3. State can administratively dissolve your LLC

This means your business legally stops existing.

Reinstatement is possible—but it costs more time and money.

Do You Need to Update Your Operating Agreement Every Year?

No.

Your Operating Agreement does not need annual updates unless:

• Ownership changes
• Profit-sharing changes
• Business structure changes

Otherwise, it remains valid.

Benefits of an LLC

Here’s why LLCs are so popular:

Limited liability protection
→ Your personal assets stay protected

Flexible taxation
→ Can choose sole prop, partnership, or S-Corp

Simple management
→ Less paperwork than corporations

Credibility
→ More professional business structure

Step-by-Step: How to Start an LLC

1. Choose your state
2. Pick a unique business name
3. File Articles of Organization
4. Appoint a Registered Agent
5. Create an Operating Agreement
6. Get an EIN (from IRS)
7. Open a business bank account
8. Stay compliant with annual fees

LLC annual fees are a small but important part of running your business.

While some states offer $0 fees, others charge hundreds of dollars every year. The key is not just choosing the cheapest option—but the right state for your business operations.

Frequently Asked Questions (FAQs)

1. What is the average annual fee for an LLC in the U.S.?

The average annual LLC fee in the United States is around $90–$100 per year. However, this can vary widely depending on the state. Some states charge $0, while others like California require $800 or more annually.

2. Which states have no LLC annual fees?

Several states do not charge an annual LLC fee. These include:

• Arizona
• Missouri
• New Mexico
• Ohio

Some states like Texas, Idaho, and Minnesota don’t charge a fee but still require you to file an annual report.

3. What happens if I don’t pay my LLC annual fee?

If you fail to pay your annual fee:

• Your LLC may face late penalties
• It can lose its good standing status
• The state may dissolve (shut down) your LLC

In most cases, you’ll need to pay extra fees to reinstate your business.

4. Do I have to pay LLC fees even if I make no money?

Yes. LLC annual fees are required regardless of income or activity. Even if your business earns $0 or remains inactive, you must still pay the required fees to keep it active.

5. What is the difference between an LLC filing fee and an annual fee?

• Filing Fee → One-time payment to form your LLC
• Annual Fee → Ongoing payment to maintain your LLC each year

Both are mandatory, but they serve different purposes.

6. Which state has the lowest LLC annual fee?

Pennsylvania currently has one of the lowest annual fees at around $7 per year. Other low-cost states include Kentucky, Hawaii, and Utah.

7. Why is California LLC so expensive?

California charges a mandatory $800 annual franchise tax, regardless of income. This is one of the highest LLC fees in the U.S. and is required even if your business is not active.

8. Can I form an LLC in a cheaper state to save money?

You can, but it’s often not recommended.
If you operate in a different state, you may need to:

• Register as a Foreign LLC
• Pay fees in two states
• File additional reports

This can actually increase your total cost.

9. How often do I need to pay LLC annual fees?

It depends on the state:

• Most states → Every year (annually)
• Some states → Every 2 years (biennially)
• A few states → No ongoing fee required

Always check your state’s deadline.

10. Is an LLC worth it despite annual fees?

Yes. An LLC provides:

• Limited liability protection
• Tax flexibility
• Business credibility

For most entrepreneurs, the benefits outweigh the relatively small annual costs.

11. Do I need to file an annual report every year?

In most states, yes. Even if there is no fee, you may still need to submit an annual or informational report to keep your LLC active.

12. Can LLC annual fees be tax deductible?

In many cases, yes. LLC fees are generally considered business expenses and may be deductible on your tax return. However, the exact treatment depends on your tax situation.

13. What is the penalty for late LLC annual filing?

Penalties vary by state but may include:

• Late fees
• Interest charges
• Administrative dissolution

Some states charge significant penalties if you miss deadlines.

14. Which states are best for low-cost LLC maintenance?

States with low ongoing costs include:

• Wyoming
• Kentucky
• Utah
• Michigan
• Colorado

However, the best state is usually where you live or operate your business.

15. Do I need to update my LLC every year?

You don’t need to update your LLC structure annually, but you must:

• File required reports
• Pay annual fees
• Keep your business information up to date