When forming an LLC, understanding the associated costs is essential for entrepreneurs. These costs vary significantly by state and can include filing fees, annual renewals, taxes, and specific business-related fees. In this detailed guide, we’ll walk you through LLC taxes, renewal requirements, and fees for each state in the U.S. to help you make an informed decision.
LLC Taxes by State
LLC taxes can take different forms, such as income tax, franchise tax, and sales tax. Here’s a breakdown of how each state handles LLC taxes and the tax rates or fees applicable.
1. Alabama
- State Income Tax: 2% to 5% (based on income bracket)
- Franchise Tax: Business Privilege Tax, starting at $100 and based on income.
- Annual Report Fee: $100
- Renewal: Annual report due by April 15.
2. Alaska
- State Income Tax: None
- Franchise Tax: None
- Annual Report Fee: $100
- Renewal: Annual report due every two years.
3. Arizona
- State Income Tax: 2.59% to 4.5% (based on income bracket)
- Franchise Tax: None
- Annual Report Fee: None (no annual report requirement)
- Renewal: No annual renewal required.
4. Arkansas
- State Income Tax: 1% to 6.6% (based on income bracket)
- Franchise Tax: None
- Annual Report Fee: $150
- Renewal: Annual report due by May 1.
5. California
- State Income Tax: 1% to 13.3% (on profits, based on income bracket)
- Franchise Tax: $800 annually (minimum)
- Annual Report Fee: No fee, but an annual Statement of Information must be filed.
- Renewal: Annual Statement of Information due every two years; Franchise tax due annually.
6. Colorado
- State Income Tax: 4.55% flat rate.
- Franchise Tax: None
- Annual Report Fee: None (annual renewal is required).
- Renewal: Annual renewal due.
7. Connecticut
- State Income Tax: 3% to 6.99% (based on income bracket)
- Franchise Tax: $250 annually (LLCs earning more than $250,000)
- Annual Report Fee: $80
- Renewal: Annual report due by the anniversary month of LLC formation.
8. Delaware
- State Income Tax: 8.7% (on income above $60,000 for individuals)
- Franchise Tax: $300 annually (based on authorized shares or capital structure)
- Annual Report Fee: $300
- Renewal: Annual franchise tax and report due by March 1.
9. Florida
- State Income Tax: None (but LLCs may be subject to federal taxes)
- Franchise Tax: None, but LLCs must file an annual report.
- Annual Report Fee: $138.75
- Renewal: Annual report due by May 1.
10. Georgia
- State Income Tax: 1% to 5.75% (based on income bracket)
- Franchise Tax: None
- Annual Report Fee: $50
- Renewal: Annual report due on the anniversary of LLC formation.
11. Hawaii
- State Income Tax: 1.4% to 11% (based on income bracket)
- Franchise Tax: None
- Annual Report Fee: $15
- Renewal: Annual report due every year.
12. Idaho
- State Income Tax: 1.6% to 6.9% (based on income bracket)
- Franchise Tax: None
- Annual Report Fee: None (no requirement)
- Renewal: No renewal required.
13. Illinois
- State Income Tax: 4.95% flat rate.
- Franchise Tax: None
- Annual Report Fee: $75
- Renewal: Annual report due by the anniversary of LLC formation.
14. Indiana
- State Income Tax: 3.23% flat rate.
- Franchise Tax: None
- Annual Report Fee: None
- Renewal: No annual renewal required.
15. Iowa
- State Income Tax: 0.33% to 8.53% (based on income bracket)
- Franchise Tax: None
- Annual Report Fee: $45
- Renewal: Annual report due every year.
16. Kansas
- State Income Tax: 3.1% to 5.7% (based on income bracket)
- Franchise Tax: None
- Annual Report Fee: $50
- Renewal: Annual report due by the anniversary of LLC formation.
17. Kentucky
- State Income Tax: 5% flat rate.
- Franchise Tax: None
- Annual Report Fee: $15
- Renewal: Annual report due by June 30.
18. Louisiana
- State Income Tax: 2% to 6% (based on income bracket)
- Franchise Tax: None, but LLCs must file an annual report.
- Annual Report Fee: $30
- Renewal: Annual report due by the anniversary of LLC formation.
19. Maine
- State Income Tax: 5.8% to 7.15% (based on income bracket)
- Franchise Tax: None
- Annual Report Fee: $85
- Renewal: Annual report due by June 1.
20. Maryland
- State Income Tax: 2% to 5.75% (based on income bracket)
- Franchise Tax: None, but LLCs are required to file an annual report.
- Annual Report Fee: $300
- Renewal: Annual report due by April 15.
21. Massachusetts
- State Income Tax: 5% flat rate.
- Franchise Tax: None, but LLCs must pay a corporate excise tax if they are classified as corporations.
- Annual Report Fee: $500
- Renewal: Annual report due by the anniversary of LLC formation.
22. Michigan
- State Income Tax: 4.25% flat rate.
- Franchise Tax: None
- Annual Report Fee: $25
- Renewal: Annual report due by February 15.
23. Minnesota
- State Income Tax: 5.35% to 9.85% (based on income bracket)
- Franchise Tax: None
- Annual Report Fee: $50
- Renewal: Annual renewal required.
24. Mississippi
- State Income Tax: 3% to 5% (based on income bracket)
- Franchise Tax: None
- Annual Report Fee: None
- Renewal: No renewal required.
25. Missouri
- State Income Tax: 1.5% to 5.4% (based on income bracket)
- Franchise Tax: None
- Annual Report Fee: None
- Renewal: No annual renewal required.
26. Montana
- State Income Tax: 1% to 6.9% (based on income bracket)
- Franchise Tax: None
- Annual Report Fee: None
- Renewal: No renewal required.
27. Nebraska
- State Income Tax: 2.46% to 6.84% (based on income bracket)
- Franchise Tax: None
- Annual Report Fee: $10
- Renewal: Annual report due by April 1.
28. Nevada
- State Income Tax: None
- Franchise Tax: None, but LLCs must file an annual list of officers and directors.
- Annual Report Fee: $150
- Renewal: Annual renewal fee is due.
29. New Hampshire
- State Income Tax: None (income tax on interest/dividends only)
- Franchise Tax: None
- Annual Report Fee: $100
- Renewal: Annual renewal due by April 1.
30. New Jersey
- State Income Tax: 1.4% to 10.75% (based on income bracket)
- Franchise Tax: None
- Annual Report Fee: $75
- Renewal: Annual report due by the anniversary of LLC formation.
31. New Mexico
- State Income Tax: 1.7% to 4.9% (based on income bracket)
- Franchise Tax: None
- Annual Report Fee: None
- Renewal: No renewal required.
32. New York
- State Income Tax: 4% to 8.82% (based on income bracket)
- Franchise Tax: LLCs pay a fee based on income if profits exceed $1 million.
- Annual Report Fee: $9
- Renewal: Biennial report due by the anniversary of LLC formation.
33. North Carolina
- State Income Tax: 5.25% flat rate.
- Franchise Tax: $200 minimum tax
- Annual Report Fee: $200
- Renewal: Annual report due by the anniversary of LLC formation.
34. North Dakota
- State Income Tax: 1.1% to 2.9% (based on income bracket)
- Franchise Tax: None
- Annual Report Fee: $50
- Renewal: Annual report due by the anniversary of LLC formation.
35. Ohio
- State Income Tax: 0.26% to 4.797% (based on income bracket)
- Franchise Tax: Commercial Activity Tax (CAT) if earnings exceed $150,000.
- Annual Report Fee: None
- Renewal: No annual renewal required.
36. Oklahoma
- State Income Tax: 0.5% to 5% (based on income bracket)
- Franchise Tax: None
- Annual Report Fee: None
- Renewal: No annual renewal required.
37. Oregon
- State Income Tax: 5% to 9.9% (based on income bracket)
- Franchise Tax: None
- Annual Report Fee: $100
- Renewal: Annual renewal required.
38. Pennsylvania
- State Income Tax: 3.07% flat rate.
- Franchise Tax: None
- Annual Report Fee: None
- Renewal: No annual renewal required.
39. Rhode Island
- State Income Tax: 3.75% to 5.99% (based on income bracket)
- Franchise Tax: None
- Annual Report Fee: $50
- Renewal: Annual report due by November 1.
40. South Carolina
- State Income Tax: 0% to 7% (based on income bracket)
- Franchise Tax: None
- Annual Report Fee: $25
- Renewal: Annual renewal due by the anniversary of LLC formation.
41. South Dakota
- State Income Tax: None
- Franchise Tax: None
- Annual Report Fee: None
- Renewal: No annual renewal required.
42. Tennessee
- State Income Tax: None (but LLCs pay franchise and excise taxes)
- Franchise Tax: $100 minimum
- Annual Report Fee: None
- Renewal: No annual renewal required.
43. Texas
- State Income Tax: None
- Franchise Tax: Texas LLCs must pay franchise tax, which is based on revenue.
- Annual Report Fee: None
- Renewal: No annual report required.
44. Utah
- State Income Tax: 4.95% flat rate.
- Franchise Tax: None
- Annual Report Fee: $20
- Renewal: Annual renewal required.
45. Vermont
- State Income Tax: 3.35% to 8.75% (based on income bracket)
- Franchise Tax: None
- Annual Report Fee: $35
- Renewal: Annual report due by April 15.
46. Virginia
- State Income Tax: 2% to 5.75% (based on income bracket)
- Franchise Tax: None
- Annual Report Fee: $50
- Renewal: Annual report due by the anniversary of LLC formation.
47. Washington
- State Income Tax: None
- Franchise Tax: Business and Occupation (B&O) tax, varies by industry.
- Annual Report Fee: $60
- Renewal: Annual renewal required.
48. West Virginia
- State Income Tax: 3% to 6.5% (based on income bracket)
- Franchise Tax: None
- Annual Report Fee: $25
- Renewal: Annual report due by the anniversary of LLC formation.
49. Wisconsin
- State Income Tax: 3.54% to 7.65% (based on income bracket)
- Franchise Tax: None
- Annual Report Fee: $25
- Renewal: Annual report due by the anniversary of LLC formation.
50. Wyoming
- State Income Tax: None
- Franchise Tax: None
- Annual Report Fee: $60
- Renewal: Annual report due by the anniversary of LLC formation.
Conclusion
Understanding the LLC tax structure, filing fees, and renewal requirements for each state is critical for business owners who want to stay compliant and manage their LLCs efficiently. While some states have more complex tax and renewal structures, others offer straightforward and low-cost LLC maintenance. Always verify the latest rules on the official state websites for accurate and up-to-date information.
By understanding these fees and taxes, you can make more informed decisions about forming and maintaining your LLC.
