Cheapest LLC States 2026: Top 10 Ranked by 5-Year Cost
The cheapest US state for LLC formation in 2026 is Montana, with a total 5-year ownership cost of $35 ($35 filing + $0 annual report, no franchise tax). The next 9 cheapest states are ranked below by total 5-year cost. Data sourced quarterly from each state's Secretary of State website.
The 10 cheapest LLC states in 2026 (5-year ownership cost)
- #1
Montana
$35 5-year total · $35 year 1 · $35 filing · $0/annual report · no franchise tax
Montana ranks #1 because it combines a low 35-dollar filing fee with no annual report fee and no franchise tax. The most affordable single jurisdiction in the US for LLC ownership over 5 years.
Source: biz.sosmt.gov · verified 2026-05-02
- #2
- #3
Mississippi
$50 5-year total · $50 year 1 · $50 filing · $0/annual report · no franchise tax
Mississippi is among the cheapest 3 states for 5-year LLC ownership. Filing fee is $50 (paid once at formation), with $0 annual.
Source: www.sos.ms.gov · verified 2026-05-02
- #4
Missouri
$50 5-year total · $50 year 1 · $50 filing · $0/none report · no franchise tax
Missouri keeps total 5-year cost under $99 thanks to its modest filing and report fees. No franchise tax adds to the savings.
Source: www.sos.mo.gov · verified 2026-05-02
- #5
New Mexico
$50 5-year total · $50 year 1 · $50 filing · $0/none report · no franchise tax
New Mexico keeps total 5-year cost under $99 thanks to its modest filing and report fees. No franchise tax adds to the savings.
Source: www.sos.nm.gov · verified 2026-05-02
- #6
Ohio
$99 5-year total · $99 year 1 · $99 filing · $0/none report · no franchise tax
Ohio keeps total 5-year cost under $99 thanks to its modest filing and report fees. No franchise tax adds to the savings.
Source: www.ohiosos.gov · verified 2026-04-28
- #7
Idaho
$100 5-year total · $100 year 1 · $100 filing · $0/annual report · no franchise tax
Idaho rounds out the top 10. The annual report cycle keeps recurring costs predictable for budgeting.
Source: sosbiz.idaho.gov · verified 2026-05-15
- #8
Iowa
$110 5-year total · $50 year 1 · $50 filing · $30/biennial report · no franchise tax
Iowa rounds out the top 10. The biennial report cycle keeps recurring costs predictable for budgeting.
Source: sos.iowa.gov · verified 2026-05-15
- #9
South Carolina
$110 5-year total · $110 year 1 · $110 filing · $0/none report · no franchise tax
South Carolina rounds out the top 10. The none report cycle keeps recurring costs predictable for budgeting.
Source: sos.sc.gov · verified 2026-04-28
- #10
Hawaii
$118.5 5-year total · $64.5 year 1 · $51 filing · $13.5/annual report · no franchise tax
Hawaii rounds out the top 10. The annual report cycle keeps recurring costs predictable for budgeting.
Source: cca.hawaii.gov · verified 2026-05-15
Methodology, what's included in the 5-year total
The 5-year total represents the cumulative cost of forming and maintaining a single-member LLC in each state for 5 calendar years, calculated as: state filing fee (paid once at formation) + 4 years of annual or biennial report fees + 4 years of franchise/privilege tax (where applicable). Where a state uses a biennial report cycle, the report fee is amortized to its annual equivalent. Pennsylvania's decennial cycle is amortized to a per-year basis for fair comparison.
Excluded from this comparison: registered-agent service fees ($100-$300 per year, optional if you serve as your own agent and live in the state), EIN application help ($79-$199, free if you apply directly with the IRS), operating-agreement drafting ($0 with a template, $400-$1,500 with an attorney), and city or county business license fees (typically $25-$500 per year, vary by location and industry). Those costs are non-state-specific and do not reflect the state's policy for LLC formation cost.
All figures are sourced from the issuing state's Secretary of State or Department of State website. Each state row above includes the source URL. We re-verify all 51 jurisdictions quarterly. The current verification timestamp is shown in the page footer.
The trap: cheap state, expensive home state
Founders sometimes form an LLC in Montana or Arizona thinking they will save money, then discover that operating from another state where they actually live or do business requires "foreign qualification". Foreign qualification means filing the same LLC again in the home state, paying a second filing fee, and maintaining a second registered agent. The total cost ends up higher than just forming directly in the home state.
The cheap-state strategy only pencils out for these scenarios: non-resident founders with no US presence (international entrepreneurs forming a US LLC for global ecommerce, who can pick any state since they have no US home base); founders prioritizing privacy over cost (Wyoming and Delaware allow anonymous LLC ownership through nominee structures); and certain venture-backed startups (Delaware is investor-expected for priced rounds even if the founders live elsewhere).
For everyone else, the cheapest LLC state is the one you actually live in. The 5-year cost of forming in Montana from a different home state often exceeds $2,500 once foreign qualification fees are included, which would push it out of the top 10 list above.
Frequently asked questions
What is the cheapest state to form an LLC in 2026?
Montana is the cheapest state for LLC formation in 2026 by total 5-year cost ($35). The filing fee is $35 and the annual report is $0.
Should I form my LLC in the cheapest state?
Only if you actually live or operate there. Forming an LLC in a state where you do not have a physical presence requires "foreign qualification" in your home state, doubling fees and registered-agent costs. The cheap-state strategy only works for non-resident or international founders who legitimately have no US home base.
How is the 5-year total calculated?
5-year total = state filing fee + 4 years of annual report fees + 4 years of franchise tax (if applicable) + Statement of Information fees on their actual cadence (annual or biennial). Calculator excludes registered-agent service fees, EIN application help, and operating-agreement drafting because those are optional. Math is sourced from each state's Secretary of State website.
Why is California not on this list?
California's $800 minimum franchise tax brings 5-year cost to $4,070 even with a $70 filing fee, ranking it among the most expensive states. The franchise tax applies regardless of LLC income.
Are these costs the same for single-member vs multi-member LLCs?
Yes for filing fees, annual reports, and franchise tax. Multi-member LLCs may have different federal tax treatment (partnership vs disregarded entity) but state-level LLC fees do not vary by member count.
Compare any two states side by side
Want to see the full breakdown for a specific state including processing times, publication requirements, and franchise-tax rules? Each state has its own dedicated page with the year-1 + 5-year math, every fee line item, and the source URL we verify against.
- Montana LLC cost ($$35 over 5 years)
- Arizona LLC cost ($$50 over 5 years)
- Mississippi LLC cost ($$50 over 5 years)
- Missouri LLC cost ($$50 over 5 years)
- New Mexico LLC cost ($$50 over 5 years)
- Ohio LLC cost ($$99 over 5 years)
- Idaho LLC cost ($$100 over 5 years)
- Iowa LLC cost ($$110 over 5 years)
- South Carolina LLC cost ($$110 over 5 years)
- Hawaii LLC cost ($$118.5 over 5 years)
For all 51 jurisdictions, see the complete LLC cost by state directory. For an interactive calculator that adjusts based on your specific situation (number of members, registered agent service, expedited processing), use the main calculator on the homepage.