Delaware vs Wyoming LLC: the annual cost after Delaware went to 400 dollars

I put a wrong number in this file on the twenty ninth of July and it sat here for five days. I wrote that a Delaware LLC pays 300 dollars a year. The figure is 400, and it has been 400 since the first of January, so I was not early on a change that was coming. I was late on one that had already landed. This is the corrected version, and the correction is bigger than the hundred dollars suggests. Search Delaware vs Wyoming LLC and you get several hundred pages arguing the two states against each other, and I have not yet found one of them carrying the current figure of 400 dollars, which tells you roughly how much of that writing is copied from the page above it.

House Bill 400 was signed on the twenty first of May 2026. It lifts the flat annual tax on Delaware limited liability companies, limited partnerships and general partnerships from 300 dollars to 400, and it backdates that to the first of January, which covers the whole tax year rather than the part that was left when the governor signed. The tax on each registered series inside an LLC went from 75 dollars to 100. Most of the rest of the bill started on the first of August, two days ago.

Why I had it wrong, and why your accountant may still have it wrong

I had assumed the state keeps one number in one place. It keeps at least three, and they disagree.

The Division of Corporations page for alternative entity tax says the entity "must pay the $400 yearly tax on or before June 1st". The Division of Revenue page on franchise taxes says the same entities "are required to pay an annual tax of $300.00". The state's own guide to forming a business entity also says 300. I opened all three this morning, seventy four days after the signature. One page right, two pages wrong, and no review date on any of them to tell you which was written last.

I went to Revenue first back in July because that is the page my search puts on top, and I never crossed it against Corporations. That is the whole story of the error. I am writing it down because the trap is still open and it is open to anyone who checks once.

The practical shape is worse than a stale web page. Delaware LLC tax is paid a year behind: the Division says the annual taxes "for the prior year are due on or before June 1st". So the 400 for this year is not payable until June 2027, and a company that budgeted 300 in January has eleven months to discover the gap. Most owners will discover it as a slightly larger renewal invoice with no explanation attached.

The recurring number is the comparison

Formation fees are what every comparison leads with and they matter least, because you pay them once and then carry the annual line for as long as the company exists.

Wyoming charges 100 dollars to file articles of organisation. Its annual report carries a licence tax the state defines as "$60 or two-tenths of one mill on the dollar ($.0002) whichever is greater based on the company's assets located and employed in the state of Wyoming". Read that clause slowly. The qualifier is doing all the work in it. A consultancy in Chicago with a Wyoming LLC has no assets in Wyoming, so it pays sixty dollars, and it still pays sixty dollars at four million in revenue.

Delaware has no such qualifier. Its tax is flat by design. A Delaware LLC that traded nothing owes the same as one that cleared eight figures, and the Division states that "There is no proration on alternative entity taxes", so registering in November does not buy you a tenth of a year.

Both states require a registered agent with a physical address in the state, and you can only be your own if you have one. Harvard Business Services publishes a Delaware agent fee of 50 dollars a year, fixed, and 99 a year for the same service in any other state. I am using their published pair because it came from one provider on one page. Every other quote came wrapped inside a formation package, where the agent fee and the state fee arrive as a single figure with no way to pull them apart, which is a small piece of design that makes comparison between agents almost impossible and is presumably not an accident. That is the market in one line. A range of somewhere between 50 and 300 is not a number anybody can plan against.

That gives an honest annual pair at the cheap end of the market. Delaware costs 450 dollars a year and Wyoming costs 159. The gap is 291 dollars. Over five years it is 1,455 and over ten it is 2,910, and I would rather write it that way than as a percentage, because a percentage on a small base sounds like an argument.

The table below is recurring cost only, meaning the state annual tax plus a registered agent at Harvard Business Services published rates, and formation fees are left out of it because Delaware's current filing fee could not be confirmed after the first of August 2026.

So here is the decision I would make, and I want it here in the middle rather than saved for the end. If the company will operate from one state and stay there, form it in that state and skip this comparison entirely, because you do not have the question. If the owners sit abroad and the business runs online, take Wyoming and keep the 291. Choose Delaware when outside money is coming in and somebody's lawyer will ask, and never choose it to look serious, because nobody is checking and it is an expensive way to feel professional.

The deadlines split them as well. Delaware falls on the first of June for everyone at once, and missing it costs 200 dollars plus interest at 1.5 per cent a month on tax and penalty. Wyoming's annual report is due on the first day of your anniversary month, which spreads a group of companies across the calendar instead of stacking them on one morning.

Where the saving evaporates

If you live and work in a state, that state generally wants your LLC registered there as a foreign entity, and it wants its own money whatever your certificate says. Nothing about that is unusual and every state with a filing office runs some version of it.

California is the sharp version. The Franchise Tax Board is blunt about who owes: "Every LLC that is doing business or organized in California must pay an annual tax of $800", and it is due "even if you are not conducting business, until you cancel your LLC". Cross 250,000 dollars of California income and a second fee starts at 900 dollars, rising to 2,500 at half a million and 6,000 at a million. Miss the statement of information and the Secretary of State adds 250 more.

Now run that against the saving, and do it before you file rather than after. A founder in Los Angeles who forms in Wyoming to escape California pays 60 to Wyoming, 99 to a Wyoming agent, 800 to California anyway, and 900 on top once the business clears a quarter of a million. Two agents, two sets of filings, two deadlines. What catches people is that the two obligations sit in different offices under different names, and nothing anywhere in the Wyoming filing process mentions California, so the second bill arrives from a direction nobody was watching. Eight hundred dollars against a saving of 291. The arithmetic points the opposite way from the advice and it is not close. Nobody sells that version of the comparison.

People still cite a California first year exemption. It ran for tax years beginning on or after the first of January 2021 and before the first of January 2024. That window is shut.

The cost that arrives when a bank asks for paper

This is the part of the schedule nobody compares, and for anybody opening a business account it is the part that touches your week.

Banks ask for a certified copy of the formation document or a certificate of good standing, and Delaware's own guidance tells you they will, in a paragraph that advises you to check with your financial institution before you file at all, because the certificate is the one piece of state paper most owners end up actually buying rather than merely filing. On the first of August the price of that paper moved. A certified copy went from 20 dollars for the first page to 50. Each further page went from one dollar to two. An additional certified copy supplied to the entity went from 5.75 to 50, which is close to a ninefold increase on the smallest item in the list. Service of process went from 50 to 100. The ceiling on twenty four hour expedited service went from 100 to 300, same day from 200 to 500, and two hour service from 500 to 1,500.

Wyoming sells a certificate of existence for 20 dollars and a certification for 10.

Then it inverts, and this is the bit I did not expect. Wyoming charges 700 dollars for next business day expedited filing and 1,400 for same day. Delaware's twenty four hour ceiling is 300. So the cheap state to keep is the expensive state to hurry, and the 291 a year you saved goes back across the table the first time a closing moves and you need something filed today.

A short digression about 2.4 per cent, because it changed how I read the rest of the schedule. Wyoming adds a card processing fee of 2.4 per cent with a one dollar minimum on online filings, and if your annual report fee lands above 500 dollars the state will not let you file online at all. It is an odd little cliff, and I have no idea what it is for. Anyway, back to the annual line.

What the choice does not affect

It does not affect whether a bank will open your account. I want to be flat about that, because it is the reason people give for the whole exercise.

I pulled the FDIC register of insured institutions on the thirtieth of July and counted them by the state of the main office, which is the only cut the register offers, so a bank with one office in Delaware and four hundred branches spread across the country still counts here as a single Delaware institution. Four thousand two hundred and eighty three across the fifty states. Delaware has sixteen, which puts it forty second. Wyoming has twenty four and sits thirty ninth. Texas has 347 and Illinois 327, and those two states between them hold about one insured institution in every six in the country.

Any bank in the country will open for an entity formed in any other state. What your formation state changes is not permission, and treating it as though it were is where most of the confusion starts. It changes the errand: the certified copy, the good standing certificate, how fast you can get one, and what it now costs.

I keep thinking about that 50 dollar certificate line. Fifty dollars for the first page is small beside a 400 dollar tax. It is also the fee you meet on the day the bank asks, at the moment you are trying to move, and it is up two and a half times from a fortnight ago.

What I could not establish

I went looking for a current filing fee for a Delaware certificate of formation and did not find one I would defend in print, and it took the best part of an hour, moving between the fee impact statement, the forms page and the corporate fee page, which sends you back to the forms page you started on. The fee impact statement lists the annual taxes and a long tail of miscellaneous charges and does not carry that line. The state page that does carry it is the same page still showing 300 for the annual tax, so I am not willing to quote it. If somebody has the post August schedule in front of them I would like to see it.

While I had the fee statement open I also looked for who owns the correction on the two stale pages. There is no published review date and no note that anything changed. Web pages have no owner in a statute.

I do not know whether agents will pass the extra hundred through as a visible line or fold it into a renewal price, and that decides whether most owners ever see the increase at all. My guess is that it gets folded in, because a bundled invoice is easier to raise than to explain. That is a guess with nothing behind it except how these invoices have looked before.

The scale is worth one line. The Division estimates 142,116,000 dollars from alternative entity tax and miscellaneous fees in the 2027 financial year. That is what one hundred dollars looks like multiplied by a register this size.

The part I have not put down

I have the Revenue page bookmarked and I check it most mornings to see whether the 300 has moved. It has not moved yet. I check it more than is reasonable for a number I already know, and I am slightly annoyed at myself about it. The sensible thing would be to set a reminder for the due date next June and then leave the page alone until it comes round, and I have not done that, because a reminder tells you when to pay and it says nothing at all about whether the figure printed on your invoice is the one the state currently means. I got caught by that page once, and I would rather be the person who noticed on the day it changed than the person who published the old figure twice.