Quick answer
By state fees alone, the cheapest states to form and keep an LLC for five years are Arizona, Missouri, New Mexico and Mississippi (about $50 total), followed by Ohio ($99) and Kentucky and Idaho (about $100). Montana has the lowest filing fee at $35.
The most expensive to maintain are California (about $4,130 over five years because of the $800 annual tax), Massachusetts, Nevada and Delaware.
But for most freelancers, the cheapest state is your home state. If you live and work in one state and form in another, you usually must register there as a foreign LLC too, and pay both states’ fees.
Cheapest states by five-year cost
This ranks state fees for an LLC formed in 2026 and kept five years: the filing fee plus annual or biennial fees for years two to five. It excludes registered agent and publication costs.
| Rank | State | Filing fee | Ongoing fee | 5-year state cost |
|---|---|---|---|---|
| 1 | Arizona | $50 | No annual report | $50 |
| 1 | Missouri | $50 | No annual report | $50 |
| 1 | New Mexico | $50 | No annual report | $50 |
| 1 | Mississippi | $50 | $0 annual report | $50 |
| 5 | Ohio | $99 | No annual report | $99 |
| 6 | Idaho | $100 | $0 annual report | $100 |
| 6 | Kentucky | $40 | $15 a year | $100 |
| 8 | Hawaii | $50 | $15 a year | $110 |
| 8 | Iowa | $50 | $30 every 2 years | $110 |
| 8 | South Carolina | $110 | No annual report | $110 |
| 11 | Montana | $35 | $20 a year | $115 |
Fees change and online filing may add small convenience charges. Confirm on your Secretary of State’s website. Our article How Much Does It Cost to Form an LLC? Fees by State lists all 50 states and DC.
Hidden costs in “cheap” states
- Arizona and Nebraska have publication or notice requirements that can add cost in some cases.
- New York is not cheap once you add its newspaper publication requirement, which can run from under $100 to over $1,000.
- Tennessee charges at least $300 to file and $300 a year.
Most expensive states to keep an LLC
| State | Filing fee | Ongoing fee | 5-year state cost |
|---|---|---|---|
| California | $70 | $800 annual tax plus $20 statement every 2 years | $4,130 |
| Massachusetts | $500 | $500 a year | $2,500 |
| Nevada | $425 | $350 a year (list plus business license) | $1,825 |
| Delaware | $110 | $400 annual tax | $1,710 |
| Tennessee | $300 | $300 minimum a year | $1,500 |
| Maryland | $100 | $300 a year | $1,300 |
California’s $800 tax is due from the first year. The first-year exemption ended with tax years beginning in 2023.
Why the cheapest state may not matter
The foreign LLC problem
States require LLCs “transacting business” there to register. If you live in Illinois and do your freelance work from your home office there, Illinois generally sees your Wyoming or New Mexico LLC as doing business in Illinois. You would then:
- Pay to form in the other state.
- Pay a registered agent in that state, since you don’t live there.
- Register as a foreign LLC in your home state and pay its fees.
- File annual reports in both states.
Skipping foreign registration can bring penalties, back fees and the inability to sue in your home state’s courts until you fix it.
Taxes follow you, not the LLC
A single-member LLC‘s income is taxed on your personal return. Forming in a no-income-tax state like Wyoming or Nevada doesn’t change your home state’s income tax. You still owe it where you live and work.
Privacy and asset protection
Wyoming, New Mexico and Delaware are known for privacy features, such as not listing members publicly. For a solo freelancer, a registered agent service with a business address can give similar privacy in your home state.
Worked example: Wyoming vs home state (Illinois)
Priya, a freelance data analyst in Chicago, compares forming in Wyoming with forming in Illinois. Figures are approximate state fees plus a $125-a-year registered agent for Wyoming.
| Cost | Wyoming LLC, registered in Illinois | Illinois LLC |
|---|---|---|
| Year 1: Wyoming filing | $100 | $0 |
| Year 1: Wyoming registered agent | $125 | $0 |
| Year 1: Illinois filing (foreign or domestic) | $150 | $150 |
| Year 1 total | $375 | $150 |
| Each later year: WY report $60, WY agent $125, IL report $75 | $260 | $75 |
| 5-year total | $1,415 | $450 |
The “cheap” Wyoming route costs Priya about $965 more over five years, with no income tax benefit.
When forming elsewhere can make sense
- You’re moving soon and want to form in your new state.
- You’re a nomad or live abroad and have no strong ties to one state (get professional advice).
- You’re raising money from investors who prefer Delaware.
- Your LLC will hold investments or operate mostly outside your home state.
For a typical freelancer working from home, none of these apply.
Frequently asked questions
What is the cheapest state to form an LLC?
By five-year state fees, Arizona, Missouri, New Mexico and Mississippi at about $50. By filing fee alone, Montana at $35.
Can I form an LLC in Wyoming if I live in California?
Yes, but California will still require you to register as a foreign LLC and pay its $800 annual tax if you do business there. You’d pay both states.
Is Texas cheap for an LLC?
The $300 filing fee is high, but most small LLCs owe no franchise tax and pay no annual report fee. Over five years, Texas costs about $300.
Do I need a registered agent in the formation state?
Yes. Every LLC needs one with a physical address in its formation state. If you don’t live there, you’ll need a paid service.
This article is general information, not legal or tax advice. Fees change often: confirm with each state before filing.
Related guides
- How to Start an LLC in Texas
- How to Start an LLC in California
- LLC vs S-Corp for Freelancers: When Does It Save You Money? (Calculator)
- How to Start an LLC as a Freelancer: Step-by-Step
About this guide
Written by the Freelancer Tax HQ editorial team, based on our professional experience, official US government sources (IRS, SSA and other agencies) and reputable informational articles listed in the sources below. Last reviewed on . Tax rules change often, and we update this guide when they do. Read our editorial policy or report an error.
Sources
LLC University: LLC Annual Fees by State; LLC Compass: LLC Filing Fees by State 2026; California FTB: Limited Liability Company; Texas Comptroller: Franchise Tax. Example figures are FreelancerTaxHQ illustrations.