Arizona vs District of Columbia LLC: fees, taxes, and which to pick
Data last updated: Apr 21, 2026Arizona charges $50 to form an LLC; District of Columbia charges $99. Day-one sticker price is only part of the story, since most of the real cost comes from the annual obligations that stack up each year you keep the LLC open.
Over a rolling three-year window, Arizona runs about $1,249 less in total state fees than District of Columbia. Whether that gap matters depends on whether you actually operate in one of these states or are weighing a non-resident filing.
District of Columbia imposes an entity-level annual tax on every LLC ($250 minimum). Arizona does not. For pass-through LLCs that would otherwise owe nothing at the state level, that minimum is the deciding line.
On speed, District of Columbia typically clears standard online filings faster than Arizona. Both states offer expedited tiers at an additional cost for filers on tight timelines.
For most small operators the choice is not really between these two states at all. It is between forming where the business actually operates and trying to route through a non-resident filing. The data below shows what each option actually costs.
Key differences at a glance
- Arizona costs $49 less to form ($50 vs $99).
- Arizona is $400 per year cheaper to maintain ($100 vs $500).
- District of Columbia imposes an entity-level franchise or LLC tax that applies to pass-through LLCs. Arizona does not.
- Arizona requires newly formed LLCs to publish a formation notice in local newspapers; this can add $50 to $1,800 depending on county.
- Arizona has no annual report filing at all. District of Columbia requires an annual (or biennial) report every reporting period.
Where each state fits
For most filers, forming in the state you actually operate from is the right call. The side-by-side below shows where the two states meaningfully diverge.
What each state offers that the other does not
Only Arizona
- No entity-level franchise or LLC tax
- No annual report
Only District of Columbia
- No publication requirement
Both states
- Online filing
- Paid expedited tier
- Operating agreement not statutorily required
Three-year cost, side by side
Rough estimate of the state-facing cost to form and keep an LLC through three years. Both totals include a $100 per year registered-agent estimate.
Running total includes the one-time filing fee and annual ongoing costs (report fee or franchise tax plus a $100/year registered agent estimate).
What it costs under your specific situation
The table below runs the same LLC through four common scenarios. "Non-resident" rows assume a typical home-state foreign LLC registration adds about $200 per year of stacked cost; the real number depends on which state you live in and ranges from $50 to over $800 depending on jurisdiction.
| Scenario | Year 1 | Each year after | 3-year total |
|---|---|---|---|
| You live in Arizona, business operates there No foreign LLC registration needed. You pay Arizona fees only. | $150 | $100 | $350 |
| You live in District of Columbia, business operates there No foreign LLC registration needed. You pay District of Columbia fees only. | $599 | $500 | $1,599 |
| Non-resident forming in Arizona with operations elsewhere You pay Arizona's fees plus a typical home-state foreign LLC registration of about $200 per year. | $350 | $300 | $950 |
| Non-resident forming in District of Columbia with operations elsewhere You pay District of Columbia's fees plus a typical home-state foreign LLC registration of about $200 per year. | $799 | $700 | $2,199 |
Arizona vs District of Columbia: full comparison
| Dimension | Arizona | District of Columbia |
|---|---|---|
| Online filing Can you file the formation document online? | Yes | Yes |
| Online approval time Standard, non-expedited | 14 business days | 5 business days |
| Expedited option Paid fast-track filing | $35 | $50 |
| Annual report Required in addition to tax | None | Required, $300 |
| State-imposed annual tax Franchise, privilege, or LLC tax minimum | None | $250 minimum |
| State income tax On pass-through LLC income at member level | Yes | Yes |
| Publication requirement Newspaper publication after formation | Required | No |
| Operating agreement Required by state statute | Recommended, not required | Recommended, not required |
| Foreign LLC fee Cost to register as a foreign LLC in this state | $150 | $220 |
| State sales tax General statewide rate | 5.6% | 6.0% |
Taxes in Arizona and District of Columbia
How each state handles entity-level tax on LLCs. Pass-through classification means member-level income tax also applies at each member's residence state.
Arizona tax
No entity-level franchise tax on LLCs. State income tax applies to member-level pass-through income. Corporate rate 4.9%.
District of Columbia tax
$250 minimum annual tax (net-income-with-minimum basis). State income tax applies to member-level pass-through income. Corporate rate 8.3%.
Ongoing compliance
The recurring filings each state requires after formation.
Arizona
No annual state filing. Registered agent required in Arizona.
District of Columbia
Annual report $300, due 04/01 each year. Registered agent required in District of Columbia.
Formation process, side by side
What actually happens from the moment you start filing to the moment you're in good standing. Use this as a checklist.
Arizona
- Prepare a publication-ready notice (required in Arizona).
- Check business-name availability on the Arizona entity search.
- Appoint a registered agent with a physical Arizona street address.
- File Articles of Organization (Form L010) for $50.
- Wait for approval. Online typically 14 business days. Paid expedite from $35.
- Adopt an operating agreement (recommended, not required by Arizona statute).
- Apply for a federal EIN (free from the IRS).
- Open a business bank account to separate personal and business finances.
- No annual state filing required in Arizona.
District of Columbia
- Check business-name availability on the District of Columbia entity search.
- Appoint a registered agent with a physical District of Columbia street address.
- File Articles of Organization for Domestic Limited Liability Company (Form DLC-1) for $99.
- Wait for approval. Online typically 5 business days. Paid expedite from $50.
- Adopt an operating agreement (recommended, not required by District of Columbia statute).
- Apply for a federal EIN (free from the IRS).
- Open a business bank account to separate personal and business finances.
- File your first annual report and pay $300 when it comes due.
Before you pick either state
A few things that apply no matter which state you choose. These trip up enough first-time filers that they're worth stating explicitly.
Registered agent is non-negotiable. Both Arizona and District of Columbia (and every other US state) require every LLC to designate a registered agent with a physical street address in the state of formation. You can serve as your own agent if you live in the state; otherwise a commercial agent runs $50 to $125 per year. Using your own home address makes it part of the public record.
Forming elsewhere does not escape your home state's tax. If you live and operate a business from your home state, forming the LLC in Arizona or District of Columbia does not avoid your home state's income tax. The moment you transact business at home, your home state requires a foreign LLC registration, and state tax liability follows your residence regardless of where the entity sits on paper.
EIN applications are free. The IRS issues Employer Identification Numbers directly at no cost. Any service charging you to "get your EIN" is reselling a free form submission. Single-member LLCs with no employees technically don't need one for federal tax, but nearly every bank requires an EIN to open a business account.
Operating agreement matters more than the state you pick. A well-drafted operating agreement governs member ownership, management, profit splits, buy-sell terms, and dissolution. Without one, your LLC runs on the state's default rules, which are rarely what you want. California, Maine, Missouri, and New York require a written one by statute; every other state treats it as strongly recommended.
Agency contacts
Arizona Corporation Commission - Corporations Division
- Website
- azcc.gov/corporations/home
- Phone
- (602) 542-3026
- answers@azcc.gov
- Arizona Corporation Commission, Corporations Division, 1300 West Washington Street, Phoenix, AZ 85007-2996
- Office
- Arizona Corporation Commission, 1300 West Washington Street, Phoenix, AZ 85007-2996
- Hours
- 8:00 AM to 5:00 PM Mountain, Monday to Friday
DC Department of Licensing and Consumer Protection, Corporations Division
- Website
- dlcp.dc.gov
- Phone
- (202) 671-4500
- dlcp@dc.gov
- 1100 4th Street, SW, Washington, DC 20024
- Hours
- 8:30 AM to 4:30 PM Eastern Monday, Tuesday, Wednesday and Friday; 10:30 AM to 4:30 PM Eastern Thursday
Arizona Department of Revenue
- Website
- azdor.gov
- Phone
- (602) 255-3381
- Arizona Department of Revenue, 1600 W Monroe St, Phoenix, AZ 85007
- Office
- 1600 W Monroe St, Phoenix, AZ 85007
- Hours
- 8:00 AM to 5:00 PM Mountain, Monday to Friday
DC Office of Tax and Revenue
- Website
- otr.cfo.dc.gov
- Phone
- (202) 727-4829
- e-services.otr@dc.gov
- 1101 4th Street, SW, Suite 270 West, Washington, DC 20024
- Hours
- 8:15 AM to 5:30 PM Eastern, Monday to Friday
Frequently Asked Questions
-
Is it cheaper to form an LLC in Arizona or District of Columbia?
Arizona is cheaper at formation ($50) than District of Columbia ($99). Ongoing costs are also different: $100 vs $500 per year. Total over three years: $350 vs $1,599.
-
Can I form an LLC in Arizona if I live in District of Columbia?
Yes, but your District of Columbia business will almost certainly need to register as a foreign LLC in District of Columbia too, which means paying District of Columbia's foreign registration fee and any ongoing District of Columbia obligations on top of the Arizona ones. The "form elsewhere to save" math usually doesn't work for operating businesses; it only works when you have no physical operations tied to any specific state.
-
How long does it take to form an LLC in Arizona vs District of Columbia?
Arizona online: 14 business days; District of Columbia online: 5 business days. Arizona offers paid expedite from $35. District of Columbia offers paid expedite from $50.
-
Which state has lower taxes for an LLC, Arizona or District of Columbia?
Arizona: state income tax applies to member-level pass-through income, no entity-level franchise or LLC tax. District of Columbia: state income tax applies to member-level pass-through income, plus a $250 minimum entity-level tax.
-
Do both states require a registered agent?
Yes. Every US state (and DC) requires every LLC to maintain a registered agent with a physical street address in the state. Arizona and District of Columbia both have this requirement. You can serve as your own agent if you live in the state; most out-of-state filers use a commercial agent for $50 to $125 per year.
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Does Arizona or District of Columbia have a publication requirement?
Arizona does. New LLCs must publish a formation notice in approved newspapers, which can add $50 to $1,800 to your first-year cost depending on the county where the LLC is based. District of Columbia has no publication requirement.
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Which state should I pick if I run an online business from home?
Form in the state you actually live in. Your home state's Department of Revenue treats your residence as nexus regardless of where the LLC is filed, which means you owe state income tax there anyway. Forming in Arizona or District of Columbia to escape your home state's tax doesn't work; it adds paperwork. The non-resident filings make sense when you genuinely operate nowhere in particular: international founders, purely passive holding entities, or real-estate LLCs owning property in other states.
Full state guides
More Arizona and District of Columbia comparisons
More Arizona vs ...
Sources
- Filing fee: azcc.gov/docs/default-source/corps-files/fee-schedules/fee-schedule-ll… · verified April 21, 2026
Arizona Corporation Commission Schedule of Fees - Limited Liability Companies (A.R.S. Title 29), Rev. 3.2026. 'Articles of Organization' = $50 regular, $85 expedited (the $85 figure is the total, i.e. $50 base + $35 expedited surcharge). - Expedited filing: azcc.gov/docs/default-source/corps-files/fee-schedules/fee-schedule-ll… · verified April 21, 2026
Regular expedited processing for Articles of Organization totals $85 ($35 surcharge on top of the $50 base fee) and is generally completed within 3-5 business days. Arizona also offers Same Day/Next Day Accelerated Processing on top of expedited: Next Day = $100, Same Day = $200, 2-Hour = $400. We record the cheapest expedited tier (the $35 surcharge, approx 5 business days) in the struct. - Foreign LLC registration fee: azcc.gov/docs/default-source/corps-files/fee-schedules/fee-schedule-ll… · verified April 21, 2026
Foreign Registration Statement = $150 regular, $185 expedited. We record the regular fee. - Operating agreement requirement: www.azleg.gov/ars/29/03105.htm · verified April 21, 2026
A.R.S. §29-3105 (Arizona Limited Liability Company Act) recognizes an operating agreement as the governing document among members and permits it to be oral, written, implied, or any combination. There is no statutory requirement that an LLC adopt an operating agreement, so this is recorded as not required. - Publication requirement: www.azleg.gov/ars/29/03201.htm · verified April 21, 2026
A.R.S. §29-3201(G) requires newspaper publication of the notice of LLC formation in the county of the statutory agent's street address for three consecutive publications within 60 days after filing the Articles of Organization, unless the statutory agent's street address is in a county with a population of more than 800,000, in which case the Commission inputs the notice into its public notice database. Only Maricopa County and Pima County exceed that population threshold, so LLCs with statutory agents in those two counties are exempt (covering roughly 75% of Arizona's population). LLCs in the remaining 13 counties must arrange publication; typical newspaper cost is $60-$120. - Franchise tax: azdor.gov/forms/corporate-income-tax-highlights · verified April 21, 2026
Arizona has no franchise tax on LLCs or corporations. The Arizona Department of Revenue levies only a corporate income tax (4.9% on C-corp taxable income, $50 minimum) and the Transaction Privilege Tax (a gross-receipts-style sales tax at 5.6% statewide plus local rates), neither of which functions as a traditional franchise tax. - Corporate income tax rate: azdor.gov/forms/corporate-income-tax-highlights · verified April 21, 2026
Arizona corporate income tax is a flat 4.9% of Arizona taxable income (A.R.S. §43-1111) with a $50 minimum tax. LLCs are pass-through by default and do not owe corporate income tax unless they elect to be taxed as a C-corp. Recorded here for the maxCorporateRate informational field. - Sales tax rate: azdor.gov/business/transaction-privilege-tax · verified April 21, 2026
Arizona's statewide Transaction Privilege Tax (TPT) rate is 5.6%. TPT is technically a tax on the vendor's privilege of doing business rather than a consumer sales tax, but it functions as the state's sales tax. Counties and municipalities add their own TPT rates, with combined effective rates commonly ranging 7.5% to 11.2% across Arizona. Only the 5.6% statewide rate is recorded in salesTaxRate. - Business name search: arizonabusinesscenter.azcc.gov/businesssearch · verified April 21, 2026
The Arizona Corporation Commission retired the legacy eCorp system on January 12, 2026 and replaced it with the Arizona Business Center (ABC). The ABC portal hosts the current public business entity search and online filing system. The previous ecorp.azcc.gov URLs no longer resolve. - Online filing portal: arizonabusinesscenter.azcc.gov/homepage · verified April 21, 2026
Arizona Business Center is the ACC's official online business filing portal as of January 12, 2026. Articles of Organization, foreign registrations, and most maintenance filings are submitted here. Approval times are generally 12-15 business days for regular online filings, faster with the expedited surcharge. - Certificate of Formation name: www.azcc.gov/docs/default-source/corps-files/forms/l010-articles-of-or… · verified April 21, 2026
Form L010 - Articles of Organization (domestic LLC). Filers using the online Arizona Business Center portal complete an equivalent on-screen form. Instructions are published at azcc.gov as form L010i. - Annual report: www.azcc.gov/corporations/forms/llc-forms · verified April 21, 2026
Unlike Arizona corporations, Arizona LLCs do not file an annual report. The Arizona Corporation Commission's LLC forms page lists no annual report form for LLCs, and the LLC fee schedule does not include an annual report fee. This is confirmed by A.R.S. Title 29, Chapter 7, which imposes no annual report duty on LLCs. - Filing fee: dlcp.dc.gov/node/1621921 · verified April 21, 2026
DLCP Corporations Division fee schedule for Limited Liability Company filings. Domestic LLC certificate of organization filing fee is $99.00. Amendment, statement of authority, statement of dissolution, merger, and most other LLC filings are $220. DC calls the formation document a certificate of organization in statute (section 29-802.01) but the DLC-1 form retains the Articles of Organization label. - Expedited filing: dlcp.dc.gov/node/1621901 · verified April 21, 2026
DLCP Fees for Corporate Registration Services page. Expedited same-day service: $100 in addition to all other fees required by statute. Expedited 3-day service: $50 in addition. Expedited fee is automatic for walk-in customers at the Business License Center. Expedited service may be limited or unavailable for mail-in filings; available via CorpOnline for web filings. We record the cheaper 3-day tier ($50, 72 hours) as the default. Same-day tier: $100 additional, 24-hour target. - Annual report fee: dlcp.dc.gov/node/1621921 · verified April 21, 2026
DLCP LLC fee schedule. Biennial report fee is $300 for domestic and foreign LLCs. Biennial report late fee is $100. D.C. Code section 29-102.11 sets the April 1 deadline every two years. - Annual report fee: code.dccouncil.gov/us/dc/council/code/sections/29-102.11 · verified April 21, 2026
D.C. Code section 29-102.11(c). First biennial report due April 1 of the year following the calendar year in which the public organic record became effective. Subsequent biennial reports due April 1 of each second calendar year thereafter. Failure to file leads to administrative dissolution per section 29-106.02. - Franchise tax: otr.cfo.dc.gov/page/dc-business-franchise-tax-rates · verified April 21, 2026
DC Office of Tax and Revenue Business Franchise Tax Rates page. Unincorporated Business Franchise Tax (UBT): 8.25% rate (all years 2018 and later). Filing threshold: DC-source gross income over $12,000 triggers a filing obligation. Minimum tax: $250 if DC gross receipts are $1,000,000 or less; $1,000 if over $1,000,000. A 30% salary allowance for owners and a $5,000 exemption apply in computing taxable income. Exemption: a business is exempt if more than 80% of gross income is derived from personal services rendered by the members and capital is not a material income-producing factor. - Franchise tax: code.dccouncil.gov/us/dc/council/code/titles/47/chapters/18/subchapter… · verified April 21, 2026
D.C. Code Title 47, Chapter 18, Subchapter VIII: Tax on Unincorporated Businesses. Section 47-1808.01 defines unincorporated business and sets exemptions. Section 47-1808.03 sets the rate. Section 47-1808.04 governs the $250/$1,000 minimum and the 30% salary allowance and $5,000 exemption used to compute taxable income. Confirms UBT applies to LLCs taxed as partnerships or disregarded entities federally, unless exempt. - Operating agreement requirement: code.dccouncil.gov/us/dc/council/code/sections/29-801.07 · verified April 21, 2026
D.C. Code section 29-801.07 permits but does not require an operating agreement. Section 29-801.02 defines operating agreement as the agreement of all the members; it may be oral, implied, in a record, or in any combination. Recorded as operatingAgreementRequired: false. - Foreign LLC registration fee: dlcp.dc.gov/node/1621921 · verified April 21, 2026
DLCP LLC fee schedule. Foreign LLC Foreign registration statement filing fee is $220.00. - Publication requirement: code.dccouncil.gov/us/dc/council/code/titles/29/chapters/8 · verified April 21, 2026
DC does not require newspaper publication for LLC formation. No such requirement exists in D.C. Code Title 29, Chapter 8 (Limited Liability Companies). Recorded as required: false. - Business name search: corponline.dlcp.dc.gov/ · verified April 21, 2026
DLCP CorpOnline portal is the unified entity registration and entity search system. Old corponline.dcra.dc.gov URL now redirects here. Use before filing DLC-1 to confirm name availability. - Sales tax rate: otr.cfo.dc.gov/page/sales-and-use-tax-faqs · verified April 21, 2026
DC Office of Tax and Revenue general sales tax FAQs. General Sale tax rate: 6%. Higher tiered rates apply to soft drinks (8%), prepared food and alcohol for on-premise consumption (10%), rental vehicles and off-premises liquor (10.25%), lodging (15.95%), and parking (18%). - Corporate income tax rate: otr.cfo.dc.gov/page/dc-business-franchise-tax-rates · verified April 21, 2026
DC Corporate Franchise Tax rate is 8.25% for tax year 2025 and all years since 2018. Minimum corporate franchise tax: $250 if DC gross receipts $1M or less; $1,000 if over $1M. Corporations or financial institutions are not exempt from the minimum even if otherwise exempt under DC Code.