State Tax Comparison for LLCs: 2026 Dashboard
# State Tax Comparison for LLCs: 2026 Dashboard
This state tax comparison for LLCs separates four costs founders often combine: state income tax, entity-level franchise or annual tax, Secretary of State report fees, and the cost of registering where the company actually operates. A low formation fee does not make a state inexpensive when recurring obligations and foreign qualification are added.
Methodology: Figures below summarize published state rules reviewed on August 26, 2026. They are not a personalized tax calculation. State tax exposure depends on nexus, revenue, payroll, property, owners, tax classification, and operating locations.
Which state has the lowest taxes for an LLC in 2026?
No state is universally cheapest for every LLC. Wyoming can be inexpensive for qualifying remote businesses, while a founder operating in California may still owe California tax and registration costs. Compare formation-state fees, operating-state nexus, annual reports, franchise taxes, and owner-level tax before choosing.
- Separate entity-level charges from taxes paid by owners.
- Include foreign-qualification costs where the business actually operates.
- Verify revenue, payroll, property, and industry-specific tax triggers.
Compare 2026 recurring LLC taxes and fees
Recurring cost snapshot
| State | Published recurring state obligation | Filing timing | What the number does not show |
|---|---|---|---|
| Wyoming | Annual report/license tax: $60 minimum or asset-based calculation | First day of the formation anniversary month | Tax and registration in another operating state |
| Delaware | $400 annual LLC tax; no LLC annual report | June 1 | Registered-agent cost and foreign qualification elsewhere |
| Nevada | $150 annual list plus $200 state business-license renewal | Anniversary month | Commerce tax or industry obligations when applicable |
| New Mexico | No routine LLC annual report identified on the Secretary of State business-form system | Event-driven filings | State tax registration, licenses, and operating-state obligations |
| Texas | Franchise-tax report due annually; 2026 no-tax-due threshold is $2.65 million | May 15 | Filing obligations can exist even when no tax is due |
| Florida | LLC annual report fee: $138.75 | May 1 before late fee | Federal tax and any Florida corporate-income-tax exposure based on classification |
| California | $800 annual LLC tax; additional LLC fee begins above $250,000 of California income | Tax-payment and return deadlines vary | Secretary of State filings and payroll/sales-tax obligations |
The table is a comparison layer, not a recommendation to form outside the home state. If an LLC conducts business in the founder’s state, that state may require foreign qualification and its own reports or taxes. Running two compliance calendars can erase an apparent filing-fee advantage.
Use Lovie’s state comparison tool to screen entity and state factors, then test recurring amounts with the LLC cost calculator. The Delaware versus Wyoming calculator provides a focused comparison for the two most common out-of-state choices.
Five rules that change the state-tax decision
#### 1. No-tax-due does not mean no filing
Texas publishes a $2.65 million no-tax-due threshold for 2026, but entities can still have information-report obligations. Treat the threshold as a tax calculation rule, not permission to ignore the annual compliance calendar.
#### 2. An annual tax is not always an annual report
Delaware LLCs do not file an LLC annual report. They pay a $400 annual tax by June 1. Mixing the LLC rule with Delaware corporation franchise-tax reporting produces incorrect checklists and budgets.
#### 3. Personal-income-tax headlines are incomplete
A state without a broad individual income tax can still impose annual entity fees, gross-receipts taxes, business-license charges, sales tax, payroll obligations, or sector taxes. Owner residency can also create personal tax outside the formation state.
#### 4. Nexus follows activity, not the formation certificate
Employees, offices, inventory, sales activity, or management can create tax and registration obligations where the company operates. A Wyoming or Delaware certificate does not remove obligations in California, Texas, Florida, or another operating state.
#### 5. Tax classification changes the analysis
A single-member disregarded LLC, partnership-taxed LLC, S-Corporation election, and C-Corporation do not produce the same federal or state results. Compare the entity and election before using a state table as a decision rule.
Apply the comparison to the founder’s facts
| Founder situation | Sensible first comparison | Primary risk to check |
|---|---|---|
| Remote solo founder with no fixed U.S. operating state | Wyoming, New Mexico, and the state where activity occurs | Whether management, customers, or contractors create registration or tax nexus |
| California resident operating the business from California | California versus an out-of-state LLC plus California foreign registration | Paying two-state maintenance without a business benefit |
| VC-track company | Delaware C-Corp versus an interim LLC strategy | Investor requirements, corporation franchise tax, and conversion cost |
| Texas operating company below the threshold | Texas filing requirements and no-tax-due calculation | Assuming no tax due means no report is required |
| E-commerce company with inventory in several states | Formation state plus sales-tax and inventory nexus map | Multi-state registrations outside the entity’s domestic state |
Lovie’s AI-native formation workflow can collect the founder’s operating state, ownership, funding plan, and business model before suggesting an entity path. The useful output is not “the lowest-tax state”; it is a formation plan that exposes the obligations created by the founder’s actual facts.
Frequently Asked Questions
Is Wyoming always the cheapest state for an LLC?
No. Wyoming’s minimum annual report/license tax can be low, but a founder operating in another state may need foreign qualification, a second registered agent, and that state’s tax filings. The combined cost can exceed forming directly where the business operates.
Does a Delaware LLC pay franchise tax?
Delaware labels the LLC obligation an annual tax. The current amount is $400, due June 1. Delaware LLCs do not file an annual report, which distinguishes them from Delaware corporations.
What is the Texas franchise-tax threshold for 2026?
The Texas Comptroller currently lists a $2.65 million no-tax-due threshold for 2026. The threshold affects whether tax is due; founders should separately verify the required franchise-tax and information-report filings.
Does no personal income tax mean no business tax?
No. Personal income tax, entity tax, annual report fees, gross-receipts taxes, licenses, sales tax, and payroll taxes are different obligations. A state can lack a broad personal income tax and still impose recurring business costs.
Primary sources
- Texas Comptroller — Franchise Tax
- California Franchise Tax Board — Limited Liability Companies
- Florida Division of Corporations — Annual Reports
- Delaware Division of Corporations — Alternative Entity Tax Instructions
- Wyoming Secretary of State — Annual Report Filing
Form your company with Lovie — $29 one-time + state fees; registered agent $79/year.