LLC annual costs & franchise taxes, explained
Formation is a one-time event; keeping the LLC alive is a recurring one. Three different kinds of yearly obligations get lumped together as “annual costs” — a report fee, a franchise or minimum tax, and your own operating compliance — and confusing them is how owners get surprised. Here they are, separated.
1. The annual (or biennial) report fee
Most states require a periodic report confirming the LLC’s address, members/managers, and registered agent. Fees run from $0 (Idaho, Minnesota, Mississippi, Montana — report still required) to $500 (Massachusetts). Six states report every two years instead: Alaska ($100), Indiana ($32 online), Iowa ($30 online), Kansas ($90 online), Nebraska ($10–$30 by method), and New York ($9). Due dates follow three patterns: a fixed calendar date (Florida and North Carolina April 15–May 1, Michigan February 15, Maine June 1), your anniversary month (the majority), or a quarter tied to formation (Wisconsin, Hawaii). Thirteen states charge no report fee at all for a standard LLC: in Idaho, Minnesota, Mississippi, and Montana the report is filed but free; in Alabama, Arkansas, and Texas the yearly filing is a tax/reporting form with no separate fee; and Arizona, Delaware, Missouri, New Mexico, and Ohio require no annual report whatsoever (South Carolina likewise, for a default-tax-status LLC).
2. Franchise taxes and minimum taxes
A franchise tax is a charge for the privilege of existing as a state entity — it is not an income tax, and in the states below it is owed whether or not the LLC earned anything:
| State | Charge | How it works |
|---|---|---|
| California | $800/yr | Flat annual tax on every LLC, plus a gross-receipts fee from $900 once CA income passes $250k |
| Delaware | $300 (2025) / $400 (2026+) | Flat annual LLC tax due June 1; no annual report; $200 late penalty + 1.5%/mo interest |
| Rhode Island | $400/yr | Annual charge (minimum tax) even with no income, on top of the $50 report |
| Kentucky | $175 min | Limited Liability Entity Tax, the greater of the minimum or a receipts/profits-based amount |
| Arkansas | $150/yr | Flat annual franchise tax (the report is bundled with it) |
| Tennessee | $100 min + 6.5% excise | Franchise tax 0.25% of net worth ($100 min) plus excise tax on net earnings; the annual report itself is $50/member, $300 min |
| Texas | $0 below threshold | Margin tax; no-tax-due threshold $2.47M (2025) / $2.65M (2026) — but the Public Information Report is always due May 15 |
| Wyoming | $60 min | The annual license tax doubles as the annual report charge: $0.0002 per $1 of in-state assets, $60 floor |
3. The costs that aren’t state fees
- Registered agent: $0 as your own; ~$100–$300/yr commercial. See the agent cost guide.
- Tax preparation: a Schedule C adds little; a partnership return (1065) or S-corp return (1120-S) typically means professional preparation.
- Licences and permits: industry and local, identical for LLCs and sole proprietors.
- Late fees and reinstatement: Florida’s $400 late fee, Delaware’s $200 penalty, and full reinstatement filings are the most expensive “annual cost” of all — and the only avoidable one. Calendar every due date the day you form.
See your state’s annual number
The calculator separates the one-time and recurring charges for all 50 states: Open the LLC cost calculator →
Educational information only. LLC Cost Guide is not a law firm, accounting firm, or filing service, and nothing on this page is legal or tax advice. Fees and deadlines change; confirm the current figures with your Secretary of State (or Division of Corporations) before filing, and consult a licensed attorney or CPA for advice about your specific situation.