Arkansas vs Illinois LLC: fees, taxes, and which to pick
Data last updated: Apr 21, 2026Arkansas charges $50 to form an LLC; Illinois charges $150. 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, Illinois runs about $575 less in total state fees than Arkansas. Whether that gap matters depends on whether you actually operate in one of these states or are weighing a non-resident filing.
Arkansas imposes an entity-level annual tax on every LLC ($150 minimum). Illinois does not. For pass-through LLCs that would otherwise owe nothing at the state level, that minimum is the deciding line.
On speed, Arkansas typically clears standard online filings faster than Illinois. 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
- Arkansas costs $100 less to form ($50 vs $150).
- Illinois is $225 per year cheaper to maintain ($175 vs $400).
- Arkansas imposes an entity-level franchise or LLC tax that applies to pass-through LLCs. Illinois does not.
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 Illinois
- Paid expedited tier
- No entity-level franchise or LLC tax
Both states
- Online filing
- No publication requirement
- 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 Arkansas, business operates there No foreign LLC registration needed. You pay Arkansas fees only. | $450 | $400 | $1,250 |
| You live in Illinois, business operates there No foreign LLC registration needed. You pay Illinois fees only. | $325 | $175 | $675 |
| Non-resident forming in Arkansas with operations elsewhere You pay Arkansas's fees plus a typical home-state foreign LLC registration of about $200 per year. | $650 | $600 | $1,850 |
| Non-resident forming in Illinois with operations elsewhere You pay Illinois's fees plus a typical home-state foreign LLC registration of about $200 per year. | $525 | $375 | $1,275 |
Arkansas vs Illinois: full comparison
| Dimension | Arkansas | Illinois |
|---|---|---|
| Online filing Can you file the formation document online? | Yes | Yes |
| Online approval time Standard, non-expedited | 2 business days | 10 business days |
| Expedited option Paid fast-track filing | Not offered | $100 |
| Annual report Required in addition to tax | Required, $150 | Required, $75 |
| State-imposed annual tax Franchise, privilege, or LLC tax minimum | $150 minimum | None |
| State income tax On pass-through LLC income at member level | Yes | Yes |
| Publication requirement Newspaper publication after formation | No | 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 | $300 | $150 |
| State sales tax General statewide rate | 6.5% | 6.3% |
Taxes in Arkansas and Illinois
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.
Arkansas tax
$150 minimum annual tax (flat basis). State income tax applies to member-level pass-through income. Corporate rate 4.3%.
Illinois tax
No entity-level franchise tax on LLCs. State income tax applies to member-level pass-through income. Corporate rate 7.0%.
Ongoing compliance
The recurring filings each state requires after formation.
Arkansas
Annual report $150, due 05/01 each year. Registered agent required in Arkansas.
Illinois
Annual report $75, due on your anniversary month. Registered agent required in Illinois.
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.
Arkansas
- Check business-name availability on the Arkansas entity search.
- Appoint a registered agent with a physical Arkansas street address.
- File Certificate of Organization for Limited Liability Company (Form LL-01) for $50.
- Wait for approval. Online typically 2 business days. No paid expedite offered.
- Adopt an operating agreement (recommended, not required by Arkansas 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 $150 when it comes due.
Illinois
- Check business-name availability on the Illinois entity search.
- Appoint a registered agent with a physical Illinois street address.
- File Form LLC-5.5 - Articles of Organization for $150.
- Wait for approval. Online typically 10 business days. Paid expedite from $100.
- Adopt an operating agreement (recommended, not required by Illinois 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 $75 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 Arkansas and Illinois (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 Arkansas or Illinois 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
Arkansas Secretary of State, Business and Commercial Services Division
- Website
- www.sos.arkansas.gov/business-commercial-services-bcs
- Phone
- (501) 682-3409
- corprequest@sos.arkansas.gov
- Victory Building, 1401 W. Capitol Avenue, Suite 250, Little Rock, AR 72201
- Hours
- 8:00 AM to 4:00 PM Central, Monday to Friday
Illinois Secretary of State, Department of Business Services
- Website
- www.ilsos.gov/departments/business_services/home.html
- Phone
- (217) 524-8008
- Limited Liability Division, 501 S. Second St., Room 351, Springfield, IL 62756
- Office
- 501 S. Second St., Room 351, Springfield, IL 62756
- Hours
- 8:00 AM to 4:30 PM Central, Monday to Friday
Arkansas Department of Finance and Administration, Revenue Division
- Website
- www.dfa.arkansas.gov
- Phone
- (501) 682-7089
- Ragland Building, 1900 W. 7th Street, Room 2062, Little Rock, AR 72201
- Hours
- 8:00 AM to 4:30 PM Central, Monday to Friday
Illinois Department of Revenue
- Website
- tax.illinois.gov
- Phone
- (800) 732-8866
- 101 West Jefferson Street, Springfield, IL 62702
- Office
- 555 West Monroe, Suite 1100, Chicago, IL 60661
- Hours
- 8:30 AM to 5:00 PM Central, Monday to Friday
Frequently Asked Questions
-
Is it cheaper to form an LLC in Arkansas or Illinois?
Arkansas is cheaper at formation ($50) than Illinois ($150). Ongoing costs are also different: $400 vs $175 per year. Total over three years: $1,250 vs $675.
-
Can I form an LLC in Arkansas if I live in Illinois?
Yes, but your Illinois business will almost certainly need to register as a foreign LLC in Illinois too, which means paying Illinois's foreign registration fee and any ongoing Illinois obligations on top of the Arkansas 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 Arkansas vs Illinois?
Arkansas online: 2 business days; Illinois online: 10 business days. Arkansas does not offer paid expedite. Illinois offers paid expedite from $100.
-
Which state has lower taxes for an LLC, Arkansas or Illinois?
Arkansas: state income tax applies to member-level pass-through income, plus a $150 minimum entity-level tax. Illinois: state income tax applies to member-level pass-through income, no entity-level franchise or LLC 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. Arkansas and Illinois 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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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 Arkansas or Illinois 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 Arkansas and Illinois comparisons
More Arkansas vs ...
Sources
- Filing fee: www.sos.arkansas.gov/uploads/bcs/LLC_Fees1_1.pdf · verified April 21, 2026
Arkansas SoS BCS Limited Liability Company Filing Fees (Rev. 1/25) under Act 1041 of 2021: Certificate of Organization $50.00 flat. No separate online price shown on the official fee schedule. Online filings via ARK.org add a $5 portal processing fee on top of the $50 state fee. - Filing fee: www.sos.arkansas.gov/uploads/LL-01.pdf · verified April 21, 2026
Arkansas Form LL-01 Certificate of Organization (Rev. 10/21) footer states: Filing Fee $50.00 payable to Arkansas Secretary of State. - Expedited filing: www.sos.arkansas.gov/uploads/bcs/LLC_Fees1_1.pdf · verified April 21, 2026
No paid expedited tier is published on the Arkansas LLC fee schedule. The Doing Business in Arkansas 2025 handbook says online filings are normally updated within 48 hours and mailed filings within 72 hours of receipt, which functions as fast default processing. Recorded as offered: false. - Annual report fee: www.sos.arkansas.gov/business-commercial-services-bcs/franchise-tax-re… · verified April 21, 2026
Arkansas SoS Franchise Tax / Annual Report Forms page: Limited Liability Company (LLC or PLLC) online fee $150, paper fee $150. Online payment adds a $5.00 processing fee per ARK.org. - Franchise tax: www.sos.arkansas.gov/business-commercial-services-bcs/franchise-tax-re… · verified April 21, 2026
Under A.C.A. Section 26-54-101 et seq. (Arkansas Corporate Franchise Tax Act of 1979), LLCs pay a flat $150 annual franchise tax to the Secretary of State. Act 819 of 2021 moved administration of the tax from DFA to the SoS effective May 1, 2021. Due May 1 each year. - Sales tax rate: www.salestaxhandbook.com/arkansas · verified April 21, 2026
Arkansas statewide sales and use tax rate is 6.5 percent under A.C.A. Section 26-52-301. Rate has been unchanged since 2013. DFA Excise Tax pages confirm the rate but are Cloudflare-WAF blocked for scripted access; Sales Tax Handbook used as a public mirror pointing back to DFA. - Corporate income tax rate: taxfoundation.org/data/all/state/state-corporate-income-tax-rates-brac… · verified April 21, 2026
Arkansas top corporate income tax rate is 4.3 percent on taxable income over $11,000 (Tax Foundation 2025 State Corporate Income Tax Rates & Brackets), after Act 2 of the 2nd Extraordinary Session of 2023 cut the top rate from 5.1 percent. DFA corporate page is Cloudflare-blocked for scripted access. - Foreign LLC registration fee: www.sos.arkansas.gov/uploads/bcs/LLC_Fees1_1.pdf · verified April 21, 2026
Arkansas SoS BCS LLC Fees (Rev. 1/25): Application for Statement of Authority by foreign limited liability company $300.00 (item 13). This is the foreign LLC registration fee under the 2021 Uniform Limited Liability Company Act. - Business name search: www.sos.arkansas.gov/corps/search_all.php · verified April 21, 2026
Arkansas SoS business entity search. Confirm name availability before filing the Certificate of Organization. - Operating agreement requirement: law.justia.com/codes/arkansas/title-4/subtitle-3/chapter-38/ · verified April 21, 2026
Arkansas Uniform Limited Liability Company Act (A.C.A. Title 4, Chapter 38, Subchapter 1, Section 4-38-102(13)) defines operating agreement to include oral, implied, in a record, or any combination thereof. No statutory mandate that the agreement be in writing, filed, or adopted at all, so recorded as not required. - Filing fee: law.justia.com/codes/illinois/chapter-805/act-805-ilcs-180/article-50/… · verified April 21, 2026
805 ILCS 180/50-10(b)(1): 'Filing articles of organization (domestic), application for admission (foreign), and restated articles of organization (domestic), $150.' Series LLC formation fee is $400 under the same subsection. - Expedited filing: law.justia.com/codes/illinois/chapter-805/act-805-ilcs-180/article-50/… · verified April 21, 2026
805 ILCS 180/50-50(e): Expedited fees include Articles of Organization $100, Articles of Amendment $100, Reinstatement $100, Application for Admission $100, Merger $200, Restated Articles $200. 24-hour turnaround for most expedited services. - Online filing portal: apps.ilsos.gov/llcarticles/index.jsp · verified April 21, 2026
Illinois Secretary of State online Articles of Organization filing portal. - Certificate of Formation form: www.ilsos.gov/publications/business-services/llc.html · verified April 21, 2026
Form LLC-5.5 Articles of Organization. PDF hosted at https://www.ilsos.gov/publications/pdf_publications/llc55.pdf - Business name search: apps.ilsos.gov/corporatellc/ · verified April 21, 2026
Illinois Secretary of State business entity search. - Operating agreement requirement: law.justia.com/codes/illinois/chapter-805/act-805-ilcs-180/article-1/ · verified April 21, 2026
805 ILCS 180/1-5 defines 'operating agreement' as an agreement 'whether oral, in a record, implied, or in any combination thereof.' No statutory requirement for a written operating agreement. - Publication requirement: law.justia.com/codes/illinois/chapter-805/act-805-ilcs-180/ · verified April 21, 2026
805 ILCS 180 imposes no newspaper publication requirement for LLC formation. - Foreign LLC registration fee: law.justia.com/codes/illinois/chapter-805/act-805-ilcs-180/article-50/… · verified April 21, 2026
805 ILCS 180/50-10(b)(1): Application for Admission (foreign LLC) fee is $150, same as domestic Articles of Organization. - Annual report fee: law.justia.com/codes/illinois/chapter-805/act-805-ilcs-180/article-50/… · verified April 21, 2026
805 ILCS 180/50-10(b)(11): Annual report fee $75, plus $50 per series for series LLCs. 805 ILCS 180/50-15(b)(1) penalty: $100 plus $100 for each year of delinquency. Deadline is before the first day of the anniversary month (§50-1(b)). - Franchise tax: tax.illinois.gov/research/taxrates/income.html · verified April 21, 2026
Illinois phased out the corporate franchise tax effective January 1, 2024 (P.A. 102-16). LLCs classified as partnerships pay Personal Property Replacement Tax at 1.5% of net income, but this is not classified as a franchise tax. No franchise tax applies to LLCs. - Corporate income tax rate: tax.illinois.gov/research/taxrates/income.html · verified April 21, 2026
Illinois corporate income tax is 7% of net income, plus 2.5% Personal Property Replacement Tax, for a combined 9.5% rate on C-corporation income. Individual income tax is 4.95% (flat). - Sales tax rate: tax.illinois.gov/questionsandanswers/answer.139.html · verified April 21, 2026
Illinois state general merchandise sales tax rate is 6.25%. Effective January 1, 2026, the 1% state grocery tax was eliminated. Local jurisdictions may impose additional taxes; combined rates vary by location.