Yes, in almost every state you have to pay something each year to keep an LLC alive, and the annual LLC fees you’ll owe depend on where you formed, how the business is taxed, and whether you pay outside help to handle compliance. Some states charge nothing beyond a basic information filing. Others collect $800 or more every year just for the privilege of existing. On top of that, federal tax filing and services like a registered agent add to the yearly tab.
The Annual Report Fee
The most common yearly charge is the annual report, sometimes called a statement of information or periodic report. It’s a short filing that updates the state on your LLC’s principal address, its members or managers, and its registered agent.
Fees run from $0 to roughly $500 for the filing itself. A handful of states charge nothing and don’t require the report at all. Several keep fees under $50. At the top end, a few states charge several hundred dollars before any separate taxes are added.
Not every state runs on a yearly cycle. Several use a biennial schedule, so you file every two years. Some tie the due date to a fixed calendar date; others use the anniversary of your LLC’s formation. Mixing up a January 1 deadline with a formation-anniversary deadline is one of the most common compliance mistakes new owners make.
Franchise Tax
Some states impose a separate charge called a franchise tax. Despite the name, it has nothing to do with franchises. It’s a fee for the right to exist as a legal entity in the state, and it applies to LLCs, corporations, and other structures alike. It’s separate from income tax.
The amount varies enormously. Some states use a flat fee, others base it on revenue or net worth. For LLCs, flat-fee franchise taxes in the states that impose them range from under $200 to $800 a year. Net-worth-based calculations can push the bill into the thousands for larger businesses. A number of states have no franchise tax at all.
The key point: franchise tax is a cost of maintaining the LLC itself. You owe it whether or not the business earned any income. A dormant LLC still owes its franchise tax on time.
Federal Tax Filing Costs
State fees get most of the attention, but your federal tax obligations recur every year too, and they carry real costs if you get them wrong.
Single-Member LLCs
The IRS treats a single-member LLC as a disregarded entity, meaning the business doesn’t file its own federal return. You report income and expenses on your personal return, typically on Schedule C, Schedule E for rental income, or Schedule F for farming.1Internal Revenue Service. Single Member Limited Liability Companies
There’s no separate filing fee, but your personal return gets more complex. Most owners end up paying for professional tax preparation once business income enters the picture, which typically runs a few hundred dollars a year for straightforward situations.
Multi-Member LLCs
An LLC with two or more members is treated as a partnership by default and must file Form 1065 each year. The partnership doesn’t pay federal income tax itself, but it must report all income, deductions, and credits and issue a Schedule K-1 to each member.2Internal Revenue Service. About Form 1065, U.S. Return of Partnership Income
The late-filing penalty for Form 1065 is $220 per partner for each month the return is overdue, up to twelve months. A two-member LLC that files three months late owes $1,320 in penalties before any tax is calculated. Owners sometimes assume there’s no urgency because the LLC itself doesn’t owe tax. That assumption is expensive.
S-Corp Election
Some LLC owners elect S-corporation tax treatment by filing Form 2553. It can reduce self-employment taxes when the business is profitable enough, but it adds annual compliance costs: payroll for owner-employees, a separate corporate return on Form 1120-S, and quarterly payroll tax deposits. Payroll processing and CPA fees for an S-corp typically run $2,000 to $4,500 a year, which is why the election rarely makes sense for LLCs earning less than roughly $50,000 in net income.
Registered Agent
Every state requires your LLC to maintain a registered agent to receive legal documents and official state correspondence. You can serve as your own agent in most states at no cost, but your personal address goes on the public record and you have to be available during business hours to accept service of process.
Professional registered agent services handle this for you. Pricing runs from under $50 a year at budget providers to $200 or more at established compliance firms. The service itself is straightforward, so the cheapest option that reliably forwards your mail is usually fine.
Business Licenses and Permits
Depending on your industry and location, you may need business licenses or permits that renew each year. A general business license in one municipality might cost $25; a specialized professional license elsewhere could be several hundred. These are easy to overlook because they come from different offices than your LLC filings — city, county, or a state licensing board rather than the secretary of state.
What Multiple States Add
If your LLC does business in states beyond where it was formed, you’ll likely need to register as a foreign LLC in each additional state. That triggers a one-time registration fee and then the same recurring obligations as a domestic LLC there: annual reports, franchise taxes, or both.
The math adds up fast. Each additional state means another filing, another fee, and another deadline. Businesses that operate nationally can end up paying thousands per year in state compliance alone, even when the individual fees look modest.
One Federal Filing You Probably Don’t Owe
The Corporate Transparency Act created a federal beneficial ownership reporting requirement, but as of March 2025 FinCEN issued an interim final rule that exempts all entities created in the United States. Only foreign-formed entities registered to do business in a U.S. state remain subject to the filing.3FinCEN.gov. Beneficial Ownership Information Reporting If your LLC was formed in any U.S. state, you currently have no BOI report to file. The exemption came through an interim rule, so the requirement could return.
What Happens If You Don’t Pay
Ignoring annual obligations doesn’t make the LLC quietly disappear. Most states follow a predictable escalation: first a late fee (commonly $25 to $200), then loss of good standing, and eventually administrative dissolution. A dissolved LLC can’t enforce contracts, file lawsuits, or conduct business in the state.
The more serious risk is personal liability. An LLC exists to shield your personal assets from business debts and lawsuits. When the state dissolves your LLC for noncompliance, that shield weakens. Courts in some jurisdictions have allowed creditors to reach the personal assets of owners whose LLCs were not in good standing when a liability arose.
Reinstatement is usually possible but isn’t cheap. You’ll file the overdue reports, pay the original fees plus accumulated late penalties and interest, and in some states pay a separate reinstatement fee. Basic reinstatement filing fees range from $25 to $500 depending on the state, but the total cost including back taxes and penalties often runs significantly higher. The longer you wait, the more it costs.
Staying on Top of the Yearly Bill
Build a compliance calendar in the first month after formation. Look up your annual report due date and franchise tax deadline on the secretary of state’s website, and set reminders well in advance. If you’re registered in multiple states, do it for each one.
Most states allow online filing, and the process itself takes ten to fifteen minutes if nothing has changed. The hard part isn’t the filing. It’s remembering. A professional registered agent will send deadline reminders, which alone can justify the annual cost for owners with a lot going on.
If you’ve already fallen behind, deal with it sooner rather than later. Reinstatement gets more expensive with each missed period, and operating without good standing creates liability exposure that back fees can’t undo retroactively.