LLC Franchise Tax by State (2026): Rates, Minimums, and Due Dates

You file the formation paperwork, pay the state’s fee, and figure your LLC is done costing you money for the year. Then, in some states, a second bill shows up from the tax department. It is not the annual report fee. It is a franchise tax, and it can be a flat $300 or a four-figure number tied to your revenue.

Here is the catch most new owners miss: whether you owe one depends entirely on where you formed and where you operate. This guide maps the LLC franchise tax by state for 2026, pulled from each state’s own statutes and revenue department. You will see who charges it, how much, and when it comes due. And where it splits from the annual report fee you may already know about.

So what is a franchise tax, exactly?

Start with the name, because it fools almost everyone. A franchise tax has nothing to do with franchising a business. Cornell Law School’s legal dictionary calls it a tax imposed by state law on businesses or corporations chartered within that state. Strip out the legalese and it is a charge for the privilege of existing as a registered business there.

The word “privilege” is the giveaway. California, for one, calls its LLC tax exactly that: a tax for the privilege of doing business in the state. You are paying for the right to operate under the state’s legal protection, whether or not you turned a profit. A brand-new LLC that earned nothing can still owe it.

Two things follow. First, a franchise tax is separate from income tax, so you can owe it in a year you lost money. Second, and this surprises people, most states do not charge LLCs a franchise tax at all. The tax usually lands on corporations instead. Only a minority of states reach down to the LLC, which is why the LLC franchise tax by state swings from a flat $300 to nothing.

Franchise tax vs. the annual report fee

This is the distinction that trips up most owners, so it is worth nailing down. Your LLC can face two very different recurring bills, and they come from two different offices.

The annual report fee is an administrative charge. You pay it to the Secretary of State to keep your registration active and your ownership details current, which is what you do when you file your annual report each year. It is usually flat and modest. Our companion guide covers the annual report fee for every state, so this page does not repeat those numbers.

The franchise tax is a revenue tax. You pay it to the state’s tax or revenue department, and the amount can scale with your income, net worth, or gross receipts. Same LLC, same year, two separate obligations. Some states charge only the report fee, some charge only the tax, and a handful charge both.

Delaware shows how confusing this gets. A Delaware LLC files no annual report at all; instead it pays a flat $300 tax due June 1. So the entire recurring cost is the franchise tax. Sorting the LLC franchise tax by state apart from the report fee is the whole reason these are two separate guides.

LLC Franchise Tax by State: The Complete 2026 Table

Here is the LLC franchise tax by state for all 50 states and the District of Columbia. States with a real LLC-level tax show the 2026 figure and due date from their own statutes. States that charge LLCs no franchise tax show “None,” and for those the only recurring state cost is the annual report fee covered in our filing-fees guide. Verify any figure on your state’s site before you rely on it, since these change.

Put it all together and that is the LLC franchise tax by state for 2026: a taxing minority, a report-fee majority. The dozen or so taxing states get grouped below by how they run the math, because a flat $300 and a percentage of net worth are very different animals.

The flat and minimum taxes: California, Delaware, Texas, Arkansas

Four states run the taxes most owners have heard of, and they set a floor you pay regardless of income.

California is the heavyweight. Every LLC doing business in the state owes an $800 minimum tax for the privilege of doing business, due by the 15th day of the fourth month. Cross past $250,000 in California income and a second charge kicks in, the gross-receipts LLC fee, which climbs from $900 to $11,790 for income of $5 million or more. The California LLC franchise tax is why people grumble about forming there.

Delaware keeps it simple: a flat $300, due June 1, and no annual report to file. That flat structure is part of why so many companies incorporate there. The Delaware LLC annual tax is the same $300 whether you earned nothing or millions.

Texas looks scary and usually is not. The state’s margin tax has a no-tax-due threshold, and per the Comptroller’s 2026 figures you owe nothing if your total revenue is $2.65 million or less. Most small LLCs clear that easily. You still file a report by May 15, even at zero tax. That is the Texas franchise tax no tax due threshold in action.

Arkansas rounds out the group with a flat $150 minimum franchise tax, due May 1. No sliding scale, no revenue test at the low end. If you own an Arkansas LLC, you budget $150. Across these four, the LLC franchise tax by state ranges from a painless $150 to California’s four-figure reality.

Nevada, Ohio, Oregon, and Washington tax revenue instead

Four more states skip the franchise-tax label but tax your top-line revenue instead. If your LLC operates in any of them, this is the recurring bill to watch, and it can reach you even in a year with thin margins.

Nevada markets itself as tax-friendly, and for small LLCs it is. There is no franchise tax. The state’s Commerce Tax applies only once your Nevada gross revenue tops $4 million in a fiscal year, so most owners never touch it.

Ohio has no franchise tax either, but it runs a Commercial Activity Tax on taxable gross receipts at a rate of 0.26%. That is a tax on revenue, not on profit, so a low-margin business can still owe.

Oregon‘s Corporate Activity Tax works the same way and, by the state’s own rule, bites only once you clear $1 million of Oregon commercial activity. Washington leans hardest on this model: its Business & Occupation tax hits gross income with no deductions for labor, materials, or other costs. Folding these into the LLC franchise tax by state picture matters, because an owner comparing states will feel these taxes even where the word “franchise” never appears.

Income and net-worth taxes: New York, Kentucky, and more

A third group scales the tax to something about your business: its income, its net worth, or its gross receipts. The number moves with the size of the company.

New York charges an annual filing fee on Form IT-204-LL. Per the state’s schedule, the fee is graduated by New York-source gross income and runs from $25 up to $4,500. Have a disregarded single-member LLC with New York income? You pay the $25 floor, due the 15th day of the third month after the tax year closes.

Kentucky runs a Limited Liability Entity Tax, the LLET, on its LLCs. If your gross receipts or gross profits come to $3 million or less, you owe the $175 minimum. Past that, the tax scales up.

Alabama‘s Business Privilege Tax runs from $0.25 to $1.75 on every $1,000 of net worth in the state. A recent change wiped out any bill of $100 or less, so most small LLCs there owe nothing. Tennessee hits hardest in this group. It stacks a franchise tax of 0.25% of net worth, with a $100 minimum, on top of a 6.5% excise tax on net earnings.

Minnesota tacks on a graduated partnership minimum fee for multi-member LLCs. Washington, D.C. starts its minimum tax at $250. Push gross receipts past $1 million and that floor jumps to $1,000. This income-scaled corner of the LLC franchise tax by state is the hardest to predict without running your own numbers.

The 2026 due-date calendar

A franchise tax you forget is a penalty you pay. Due dates bunch up in spring and early summer, but no single rule covers them all. So do this now: look up yours and put it on the calendar today.

These dates come straight from state law for 2026. Copy the block below into whatever calendar you actually check.

California: $800 tax due the 15th day of the 4th month; LLC fee due the 15th day of the 6th month
Delaware: $300 LLC tax due June 1
Texas: franchise report due May 15 (no tax due at or below $2.65M)
Arkansas: $150 franchise tax due May 1
New York: IT-204-LL fee due the 15th day of the 3rd month after year-end

Notice that even Texas, where most LLCs owe nothing, still has a filing due May 15. A zero-tax year is not a no-paperwork year. Miss the filing and you can lose your good standing, which is a bigger headache than the tax would have been. Mapping the LLC franchise tax by state onto real calendar dates is the single most useful thing you can do with this guide.

What happens if you skip the franchise tax

The specific penalties vary by state and change often, so treat this as the shape of the risk rather than a fee schedule. In general, three things follow a missed franchise tax, and they stack.

First, the money grows. States add interest and late penalties, so the bill you ignored is bigger every month you wait. Second, your LLC can slip out of good standing. That status is not cosmetic: the state can block it from suing in court or opening new accounts, and a pending sale can stall on it. Lenders and buyers dig this up during due diligence.

Third, let the lapse run long enough and the state can administratively dissolve your LLC. At that point the liability shield you formed the company to get can wobble, which defeats the purpose of the whole structure. None of this is worth the few hundred dollars you were avoiding. Knowing your slice of the LLC franchise tax by state and paying it on time is cheap insurance.

How to budget for the franchise tax

The bottom line: for most LLCs this is a small, predictable line item, and the trick is to treat it like rent, not like a surprise. Here is how to size it.

If your state charges a flat or minimum tax, the math is done for you. Delaware is $300. Arkansas is $150. California is $800 before any income-based fee. Set that amount aside on January 1 and forget about it.

If your state scales the tax to income, net worth, or gross receipts, estimate at the high end of what you expect to earn, then true it up when you file. New York, Kentucky, Tennessee, and D.C. all work this way. Over-reserving by a couple hundred dollars is annoying — under-reserving and scrambling in April is worse. If you are weighing an S-corp election to trim self-employment tax, run the numbers before you assume it helps.

What it will run you, for the vast majority of small LLCs, is somewhere between $0 and about $800 a year. That is the honest range once you know where you stand in the LLC franchise tax by state. Build it into your pricing, keep the receipt, and move on.

Where you form your LLC changes the bill

New owners often chase a “best state” to form in, usually Delaware or Wyoming, on the theory that it saves tax. For most people running a real business, that logic backfires.

Here is why. These taxes follow where you actually operate, not where a filing lists your address. Form in Delaware but operate in California, and you register as a foreign LLC in California and owe that $800 anyway — on top of Delaware’s $300. You have doubled the cost, not cut it.

For the ordinary single-owner business, forming in your home state is almost always cheaper and simpler than a two-state setup. The place the LLC franchise tax by state really drives a decision is when you have a genuine choice of where to operate, or when you are raising money and investors expect a Delaware entity. Short of that, do not let a franchise tax tail wag the business dog.

Keeping the underlying paperwork clean makes all of this easier. When your operating agreement, resolutions, and registrations are current and stored in one place, proving good standing or handling a foreign registration is a quick job instead of a scramble. That is the whole game with the LLC franchise tax by state: know your number and the date it falls due, then keep the paperwork clean enough to prove it.

Frequently Asked Questions

What is an LLC franchise tax?

It is a state tax on the privilege of doing business there, not a tax on franchising anything. Most states charge it to corporations only, so the average LLC never sees a bill. When your LLC does owe one, the tax hits every year. And it has nothing to do with income tax.

Which states charge an LLC franchise tax?

A short list of states reaches the LLC itself. Most people have heard of California, Delaware, and Texas; the others are Tennessee, Arkansas, Alabama, New York, Kentucky, and the District of Columbia, each with its own franchise, privilege, or entity tax. Nevada, Ohio, Oregon, and Washington skip the franchise label but tax gross receipts, which can still land on an LLC. Everywhere else, you are looking at an annual report fee and nothing more.

How much is the California LLC franchise tax?

The floor is $800 a year. It is due by the 15th day of the fourth month of your tax year. Push past $250,000 in California income and a gross-receipts fee stacks on top, running from $900 to $11,790, with the estimate due by the 15th day of the sixth month.

Is the franchise tax the same as the LLC annual report fee?

No. The annual report fee keeps you in good standing with the Secretary of State. The franchise tax is a separate charge from the state tax department. Some states want one, some want the other, and a handful want both. Delaware is the clean example: a $300 tax and no annual report at all.

Where can I find the LLC franchise tax by state for 2026?

Scroll back to the table. It lays out the 2026 LLC franchise tax by state for all 50 states plus DC, with the due date and whether yours charges one at all. Then confirm your number on the state’s own revenue or Secretary of State site before you file, because these amounts and thresholds move from year to year.

David Miller

David Miller writes about small business and LLC formation for ClearLegalTips. He focuses on making business registration, S-corp elections, and seller’s permits understandable for new founders handling them without a lawyer.