Delaware vs Tennessee LLC: Which Costs Less?
Tennessee is cheaper by about $110 in state costs over five years ($2,000 vs $2,110). Below is the full state-fee comparison, plus what the numbers leave out.
| Delaware | Tennessee | |
|---|---|---|
| Formation fee | $110 | $300 |
| Recurring state filing / report fee per year | $0 | $300 |
| State tax / mandatory annual charge per year | $400 | $100 |
| Year-one cost | $510 | $400 |
| Filing cadence | No annual report (the $400 annual LLC tax is due June 1) | Annual (first day of the 4th month after fiscal year end) |
| Estimated 5-year state costs | $2,110 | $2,000 |
| Rank of 51 (1 = cheapest) | 48 | 47 |
| Data status | Checked against official state sources (October 2026) | Checked against official state sources (October 2026) |
State tax matters here. Delaware charges a separate $400 a year state tax or charge (Annual LLC tax (Division of Corporations)) on top of its filing fees, starting in year one. It is included in the totals above. Owed for every year the LLC is active in Delaware's records, even with no income. It is not prorated, so the formation year costs the full $400. It replaces an annual report: Delaware LLCs file none.
State tax matters here. Tennessee charges a separate $100 a year state tax or charge (Minimum franchise tax (Department of Revenue)) on top of its filing fees, starting in year one. It is included in the totals above. Owed every year by an LLC registered with the Secretary of State or doing business in Tennessee, even if it is inactive. It is 0.25% of net worth with a $100 minimum, so a small LLC pays $100. Tennessee also charges an excise tax of 6.5% of net earnings, which is $0 with no income. A single-member LLC is not ignored for this tax unless its member is a corporation.
What this comparison does not include
- Where you live and work decides more than the fee. If you operate in Delaware but form in Tennessee, you generally must also register as a foreign LLC where you operate, and pay both states.
- Registered agent fees, formation-service fees, publication costs (such as New York's), local licenses and income-based state taxes (income, gross-receipts, B&O, sales) are not counted. Mandatory annual state taxes that apply to a small single-member LLC are counted.
- Legal and tax advantages claimed for some states depend on your situation. A CPA or attorney can tell you whether they apply to you.
Want someone else to handle the filing?
A formation service files the paperwork for a fee on top of the state fee and often includes a first year of registered agent service. It saves time, but you can file directly with the state for the state fee alone. Compare DIY and services.
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Details: Delaware LLC costs · Tennessee LLC costs · calculator · forming in another state
Fee data: official state government pages and statutes (checked October 28–29, 2026); sources are linked on each state page. See our methodology. Not legal or tax advice.