2026 tax year
Where should I form my business?
Forming out of state usually adds cost. This shows you how much.
Forming in Wyoming, Delaware or Nevada does not remove tax or registration obligations in the state where your business actually operates. An out-of-state entity doing business in its owner's state must usually register there as a foreign entity and pay that state's taxes anyway.
That is not a caveat on the calculation below. It is the calculation: every out-of-state column keeps your operating state's obligations and adds its own on top.
The advice to form in Wyoming or Delaware is everywhere, and for a business that physically operates somewhere else it is usually wrong on cost. You do not replace your home state's requirements by filing elsewhere, you acquire a second set. Two annual reports, two registered agents, two states that can dissolve you for missing a deadline.
The worked example
An Ohio consultant running an LLC on $150,000 of revenue and $110,000 of profit, comparing Ohio against the states people are usually told to use:
| Form in | Formation | Foreign registration in Ohio | Annual | Five-year total |
|---|---|---|---|---|
| Ohiowhere the work happens | $99 | $0 | $100 | $599 |
| Texas | $300 | $99 | $100 | $899 |
| Wyoming | $100 | $99 | $160 | $999 |
| South Dakota | $150 | $99 | $155 | $1,024 |
| Florida | $125 | $99 | $239 | $1,418 |
Wyoming costs $400 more than Ohio over five years, not less. Delaware costs $1,610 more. The Wyoming filing fee really is cheaper than Ohio's. And it does not matter, because the Ohio obligations do not go away.
Pass-through income is taxed where the owner lives and where the income is earned, not where the LLC is filed. In this example the federal bill is $25,413 and the Ohio income tax is $2,309, and both are identical in every column above.
This is what kills the "move my LLC to Florida" idea for a California resident. The LLC can be filed anywhere; the owner still lives in California, and California still taxes them.
Run it on your own numbers
What decides the numbers
Registered agent prices are a typical market range, not an official fee. Acting as your own agent needs an address in that state, so it is only offered where you live or work.
What changes the warnings, not the arithmetic
Set your states and figures above, then press Compare.
What an LLC actually is, for tax
An LLC is created under state law. Its federal tax treatment depends on the entity's tax classification, disregarded, partnership, S corporation or C corporation. And not on the state it was formed in. Changing the state of formation does not change federal tax at all. That is why the federal figure above sits outside the comparison table rather than inside it.
What this does not include
Everything below is real and none of it is in the totals. A calculator that quietly omits costs is worse than one that names them:
- Sales tax and economic nexus. Selling into a state can create obligations there. This site has no sales tax dataset and does not compute any part of it.
- Property tax. Not modeled anywhere on this site.
- Local business licenses city and county registrations, which vary enormously and are not held in any dataset here.
- Attorney and formation-service fees. Only the state's own charges are counted.
- Federal beneficial ownership reporting. No figure is included for it.
- Fee changes. The five-year projection holds today's fees flat. It applies no inflation and predicts no increases, though states do raise them, Louisiana's rise in October 2026 is already known.
- Registered agent pricing is a typical market range ($50 to $200 a year), not an official fee.
- Costs marked "unquantified" in the results are known to exist with no confirmed figure. They are excluded from totals and listed rather than guessed at.
Questions
Is it ever right to form outside the state I work in?
Sometimes. But the reasons are rarely about cost, and this calculator only measures cost. If you are raising outside investment, your investors may require a particular structure and state; that is a conversation with them and with a lawyer, not a number on this page.
What happens if I just do not register in my home state?
States attach real consequences to it. In California and Texas, for example, an unregistered out-of-state entity cannot bring or maintain a lawsuit in that state's courts until it registers, while remaining perfectly suable itself. California also assesses a penalty for each taxable year it was doing business unregistered. The position is curable, but the cost is delay plus back fees.
Does a Wyoming or Nevada LLC keep my name off public records?
Those states do limit what appears in state filings. What we will not tell you is whether that amounts to anonymity in 2026, because federal beneficial-ownership reporting is under active regulatory development and any firm answer here would age badly. Check the current position with FinCEN and the statute rather than trusting a page, including this one.
Why does the five-year total not include income tax?
Because income tax is the same in every column, so adding it would inflate every total by an identical amount and change no comparison. It is shown separately above the table for exactly that reason.
My state shows a dash instead of a number. Why?
Because no figure for it has been confirmed from that state's own source. Filing fees change yearly and a plausible guess is worse than an admission, so those rows stay empty and the column is marked unquantified.
The states people are usually sent to
Each of these has a page of its own, with what its own fee schedule does not tell you:
- Forming in Delaware Delaware bills the expensive franchise tax method by default.
- Forming in Wyoming Cheap to form. That is not the same as cheap to use.
- Forming in Montana or South Dakota Two cheap states, and they are cheap in completely different ways.
Two states, head to head
The comparisons people actually search for, each with the thing that separates that pair:
- California vs Wyoming LLC A Californian forming in Wyoming pays California anyway. And gets no credit for it.
- Delaware vs Wyoming LLC Two different regimes, not two price points.
- Wyoming vs Nevada LLC Marketed identically. One costs about six times the other to keep.
- Delaware vs Nevada Both scale their fees with share value. A flat comparison misleads.
Related
- Sole proprietor, S corp or C corp?
- Delaware franchise tax calculator
- S-corp election by state
- What salary to pay yourself
- 1099 taxes by state
General information about what states charge, not tax advice. And not legal advice either. Choosing where and how to form a business involves legal questions well beyond cost, and an election or filing is not always simple to undo. Take advice before filing anything.