LLC Taxes by State: A 2026 State-by-State Comparison
Federal LLC taxes are the same no matter which state you form in. State LLC taxes are wildly different — from no income tax and no annual fee to $800 minimum taxes and complex gross receipts regimes. Here's what matters most by state.
Why State Taxes Matter for LLC Owners
When people ask "where should I form my LLC?" the answer isn't just about state filing fees — it's about the ongoing tax burden. An LLC formed in California owes $800 per year in minimum franchise taxes, while the same LLC formed in Wyoming might pay $62 in annual fees with no state income tax.
However, there's an important nuance: you generally owe taxes in the state where you operate and live, not just where you formed your LLC. Forming in Wyoming or Delaware doesn't eliminate your home state's tax obligations unless you actually live and work there.
If you form your LLC in Wyoming but live and operate in California, California may require you to "foreign qualify" your Wyoming LLC in California — and pay California's $800 annual franchise tax. The state where you operate almost always has tax authority over your income earned there.
State-by-State LLC Tax Overview (Key States)
| State | State Income Tax | Annual Fee / Franchise Tax | Annual Report | Key Notes |
|---|---|---|---|---|
| California | 1%–13.3% | $800 min. franchise tax | $20 biennial Statement of Info | Highest ongoing cost; first-year exemption for LLCs formed after 1/1/2021 |
| Texas | No state income tax | Franchise tax (0.375%–0.75% of revenue above threshold) | Included in franchise tax report | Most small LLCs qualify for No Tax Due status (2026 threshold: $2.47M) |
| Delaware | 2.2%–6.6% (on DE income) | $300 annual LLC tax | Included in annual tax | No income tax for LLCs that don't operate in DE; popular for legal/business reasons |
| Wyoming | No state income tax | $62 minimum (0.0002% of in-state assets) | Included in annual report | Low cost, strong privacy laws, no income tax — popular for asset protection |
| Florida | No personal income tax | $138.75 annual report fee | Due May 1 annually | No personal income tax; business entities may owe corporate income tax if elected |
| Nevada | No state income tax | $350+ (Annual List + Business License) | Due end of anniversary month | No income tax but higher annual fees; strong privacy; Commerce Tax for high-revenue LLCs |
| New Mexico | 1.7%–5.9% | No annual fee | Not required | Only state with no annual report and no annual fee; lowest cost ongoing compliance |
| /state-guides/new-york-llc/ | 4%–10.9% | $25 annual filing fee + NY Publication requirement (expensive!) | Biennial Statement ($9) | NY requires new LLCs to publish formation notice in local newspapers — can cost $1,000–$2,000 |
States With No Personal Income Tax
These states do not tax personal income, which is relevant for pass-through LLC owners:
- Texas
- Florida
- Nevada
- Wyoming
- Washington (has B&O gross receipts tax instead)
- South Dakota
- Alaska
- Tennessee (ended income tax on wages in 2021)
- New Hampshire (taxes only dividends and interest)
States With the Lowest Ongoing LLC Costs
For LLC owners who want minimal state-level tax and fee obligations:
- New Mexico: No annual report, no annual fee, modest income tax
- Wyoming: No income tax, low annual fee ($62 minimum), strong privacy
- Montana: No sales tax, moderate annual report fee
- Ohio: No annual report, no income tax on pass-through LLC income from most types of business activity (under Business Income Deduction)
Full State LLC Guides
For a complete breakdown of formation requirements, registered agent rules, and all LLC costs for each state, see the state guides below: