Shopping for a State in which to incorporate? We’ve analyzed the filing fees, privacy laws, and filing burdens for all 50 states.
…we favor low fees, low hassles and maximum privacy. Read on to learn more each state’s individual requirements and fees in our fifty state report card and pick the best state to start your business in our ultimate guide to incorporation found right here at GimmeLaw.
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Now Let’s Dig Deeper Into the Data: Top States to Incorporate (and Why)
Our Winner: Wyoming
- $100 basic corporation filing fee
- Pro-privacy and extremely low taxation
- Imposes only minimal annual fee of $50
- Most hassle-free and low expense corporation state in the nation
- Non-profit tax research group, the Tax Foundation, voted Wyoming “the most business-friendly tax system of any state”
Strong Second: Nevada
- $75 basic corporation filing fee
- No information sharing agreement with the IRS
- Minimal reporting and disclosure obligations upon owners and managers
- Traditionally pro-privacy and low-tax
- Nevada carries only a slightly higher ongoing cost compared to Wyoming
Strong Third: Delaware
- $89 basic corporation filing fee
- Great privacy protections with familiar, sensible laws
- Best choice for owners that want to take their company all the way to Wall Street
- Annual franchise tax can be confusing
Runner Up: Montana
- $70 minimum corporation filing fee
- Low taxes, fees and reporting burdens
Runner Up: Florida
- $70 basic corporation filing fee
- Best website and online services in the nation–it offers a searchable database of documents. Filings can be done online in seconds.
Worth Mention: New Mexico “Invisible LLC”
- Offers “Invisible LLC” – a New Mexico LLC that does not require any public disclosure of either officers or owners–the most private LLC available in the US
The Complete 50-State Corporation Report Card
The following table is an at-a-glance summary of the favorability of various state laws. We examined the state corporation laws of all 50 states, their periodic reporting burdens, taxation burdens, filing fees in order to get a quick overview of how favorable or in the alternative–burdensome–each state’s laws are. Enjoy.
It’s our “Corporation Law State-by-State Report Card.”
| State |
Minimum Corporation Filing Fee |
Ongoing and Periodic Filing Burden |
Tax Burden | Grade | Notes |
| Alabama | $40 | Medium | Low | B+ | While undistinguished as a corporate center, Alabama offers filing fees among the lowest in the nation. |
| Alaska | $250 | Low | Medium | C+ | Positive: periodic reports are biennial, tax burden is moderate. Filing fee is well above average. |
| Arizona | $60 | Medium | Medium | B- | Arizona offers average tax treatment and periodic reporting burdens. Filing fees are low. |
| Arkansas | $50 | Medium | Medium | B | Filing fee is low. Tax treatment and periodic reporting burden is average. |
| California | $100 | Medium | High | F | We give California an “F” primarily because of its absolutely brutal taxation: $800 minimum “income” tax for both C Corporations and S Corporations–the highest in the nation. California is unique in that it imposes an income tax upon companies that have no income. |
| Colorado | $125 | Medium | Medium | B | Colorado offers average taxation and reporting burdens. |
| Connecticut | $275 | Medium | Medium | C+ | High fees and burdensome tax earn Connecticut lackluster marks. |
| D C | $120 | Medium | Medium | C | With Delaware so nearby, incorporation in DC is pointless. |
| Delaware | $89 | Low | Medium | B+ | Delaware offers great privacy protections and familiar and sensible laws, but its annual franchise tax is a confusing mess. Delaware is still the best choice though for owners that want to take their company all the way to Wall Street… |
| Florida | $70 | Low | Low-Medium | B+ | Best website and online services in the nation–it offers a searchable database of documents. Filings can be done online in seconds. |
| State |
Minimum Corporation Filing Fee |
Ongoing and Periodic Filing Burden | Tax Burden | Grade | Notes |
| Georgia | $100 | Medium | Medium | B- | Georgia offers average tax and reporting burdens. Fees are below average. Negative: incorporation requires pointless public notice in local newspaper. |
| Hawaii | $50 | Medium | Low-Medium | B- | Hawaii offers inexpensive incorporation, but is too geographically isolated to be of value to most mainland businesses. |
| Idaho | $100 | Low | Low-Medium | B | Idaho offers a no-fee annual report and below average filing fees and taxes. |
| Illinois | $175 | Medium | Medium | C+ | Fees and annual expenses are high ($200 each year along with annual report). |
| Indiana | $90 | Low | Low | B | Indiana offers surprisingly low fees and taxes. A great choice for local businesses. Periodic reports are biennial, not annual, a further plus. |
| Iowa | $50 | Low | Medium | B- | Organizational fees and periodic report fees are low, but tax is fairly burdensome. Periodic reports are biennial, not annual, a further plus. |
| Kansas | $90 | Medium | Medium | B- | |
| Kentucky | $50 | Medium | Medium | B- | Confusing “organization tax” must be paid at initial filing. |
| Louisiana | $60 | Medium | Medium | B- | |
| Maine | $175 | Medium | Medium | C+ | Fees are unjustifiably high. |
| State |
Minimum Corporation Filing Fee |
Ongoing and Periodic Filing Burden |
Tax Burden | Grade | Notes |
| Maryland | $100 | Medium | Medium | C+ | Confusing additional charges must be paid at start-up. |
| Massachusetts | $275 | Medium | High | D+ | High taxes and high fees. |
| Michigan | $60 | Medium | Low | B | Michigan offers light taxes on small businesses. Filing fees are also quite low. |
| Minnesota | $135 | Low | Low | B | Low taxes and a no-fee annual report make Minnesota a fairly good choice for incorporation. |
| Mississippi | $50 | Low | Low | B | Low taxes, low fees, and a low-fee annual report make Mississippi a fairly good choice for incorporation. |
| Missouri | $66 | Medium | Medium | C+ | Confusing regulations make Missouri a less-than-perfect choice for incorporation. |
| Montana | $70 | Low | Low | B+ | Low taxes, fees, and reporting burdens make Montana a favorable choice for incorporation. |
| Nebraska | $60 | Medium | Medium | B- | Annual report is confusing, taxes are low to medium. |
| Nevada | $200 | Medium | Very Low | A- | “Initial List” of officers drives up start-up costs. Traditionally pro-privacy and low-tax, Nevada has raised its fees for annual reports. |
| New Hampshire | $85 | Medium | Medium | B- | New Hampshire is average in many respects but forgives taxes (and filing burden) on entities earning less than $50,000 a year. |
| New Jersey | $125 | Medium | High | D+ | NJ’s Business Services Division is a nightmare. Representatives are surly and slow. Formation is needlessly complicated. |
| State |
Minimum Corporation Filing Fee |
Ongoing and Periodic Filing Burden |
Tax Burden | Grade | Notes |
| New Mexico | $100 | Low | Low | B+ | New Mexico offers very attractive incorporation. But most noteworthy is its “Invisible LLC”–a NM LLC that does not require any public disclosure of either officers or owners–the most private LLC available in the US. |
| New York | $125+ | High | High | F | We proudly give New York an “F”. New York has a taxation system that is so burdensome and complex, it borders on absurd. New York imposes a dizzying variety of separate taxes: a Maintenance Fee, a franchise tax, a license fee, an organization tax, and an income tax. Representatives are surly. |
| North Carolina | $125 | Medium | Medium | C+ | Periodic/Annual fees are high in light of ho-hum corporation law. |
| North Dakota | $90 | Low | Low | B | Low annual fees. |
| Ohio | $85 | Medium | Medium | B- | |
| Oklahoma | $50 | Low | Low | B | Oklahoma offers low fees and relatively low taxes, but undistinguished corporation law. |
| Oregon | $50 | Low | Low | B | Oregon offers low fees and relatively low taxes, but undistinguished corporation law. |
| Pennsylvania | $125 | Medium | Medium | D+ | Horrible customer service–new incorporations can take up to 10 weeks to be processed. |
| State |
Minimum Corporation Filing Fee |
Ongoing and Periodic Filing Burden |
Tax Burden | Grade | Notes |
| Rhode Island | $150 | Low-Medium | Medium-High | C+ | Rhode Island imposes corporation taxes that are unjustifiably high. |
| South Carolina | $135 | Medium | Medium | B- | Corporation taxation rules are somewhat confusing. |
| South Dakota | $90 | Low | Low | B | South Dakota offers low taxes, but undistinguished corporation law. |
| Tennessee | $100 | Low | Medium | B | Annual fees are low, but taxes can be burdensome with respect to business activity in Tennessee. |
| Texas | $300 | Low | Low-Medium | B- | Initial fees are unjustifiably high. Residents of Texas, though, pay no state personal income tax. |
| Utah | $52 | Low | Medium | B | Annual fee is only $10, but taxes can be burdensome with respect to business activities in Utah. A Utah LLC might be a better bet–check with your accountant. |
| Vermont | $75 | Medium | Medium-High | C | Vermont imposes a higher-than-average income tax. |
| Virginia | $75 | Medium | Medium-High | C | Unnecessarily burdensome annual tax based on authorized shares. |
| Washington | $175 | Low | Low | B | Washington state, an obvious technology center, offers on-line filing conveniences. Overall, a fair state for incorporation. |
| State |
Minimum Corporation Filing Fee |
Ongoing and Periodic Filing Burden |
Tax Burden | Grade | Notes |
| West Virginia | $100 | Medium | Medium-High | C+ | Taxes are confusing. West Virginia imposes a franchise tax and an income tax. |
| Wisconsin | $100 | Low | Medium | B- | Corporation taxes can be burdensome. |
| Wyoming | $100 | Low | Very Low | A+ | Pro-privacy and extremely low taxation. Hands down the most hassle-free and low expense corporation state in the nation. For more info see our article on Wyoming Incorporation Advantages |
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Michael Spadaccini is the author of 8 books on self-help legal matters such as, Ultimate LLC Compliance Guide: Covers All 50 States (Ultimate Series), Ultimate Book of Forming Corps, LLCs, Partnerships & Sole Proprietorships, and Ultimate Guide to Forming an LLC in Any State, Second Edition (Ultimate Series).
You can view his Amazon Author Profile Here.
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[…] filing requirements, and of course, tax burden. (For our 50-state incorporation report card, read Best State for Incorporation). What follows are our picks for the worst states for incorporation in the nation. Please keep in […]
[…] We have all seen the advertisements touting incorporation services in a particular state. These advertisements appear in media ranging from airline magazines to internet ads. Indeed, in the past thirty years, states have risen to challenge Delaware’s prominence as America’s most popular corporate haven. Specifically, Nevada and Wyoming have been most aggressive in enticing entrepreneurs and businesspersons to incorporate under their state flag. As we will see, Nevada and Wyoming have succeeded. (For our 50-state incorporation report card, read Best State for Incorporation). […]
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