California vs New Jersey LLC: fees, taxes, and which to pick
Data last updated: Apr 21, 2026California charges $70 to form an LLC; New Jersey charges $125. 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, New Jersey runs about $2,150 less in total state fees than California. Whether that gap matters depends on whether you actually operate in one of these states or are weighing a non-resident filing.
California imposes an entity-level annual tax on every LLC ($800 minimum). New Jersey does not. For pass-through LLCs that would otherwise owe nothing at the state level, that minimum is the deciding line.
On speed, New Jersey typically clears standard online filings faster than California. 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
- California costs $55 less to form ($70 vs $125).
- New Jersey is $735 per year cheaper to maintain ($175 vs $910).
- California imposes an entity-level franchise or LLC tax that applies to pass-through LLCs. New Jersey does not.
- California requires LLCs to adopt a written operating agreement by statute. The other state treats it as recommended rather than required.
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 New Jersey
- No entity-level franchise or LLC tax
- Operating agreement not statutorily required
Both states
- Online filing
- Paid expedited tier
- No publication requirement
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 California, business operates there No foreign LLC registration needed. You pay California fees only. | $980 | $910 | $2,800 |
| You live in New Jersey, business operates there No foreign LLC registration needed. You pay New Jersey fees only. | $300 | $175 | $650 |
| Non-resident forming in California with operations elsewhere You pay California's fees plus a typical home-state foreign LLC registration of about $200 per year. | $1,180 | $1,110 | $3,400 |
| Non-resident forming in New Jersey with operations elsewhere You pay New Jersey's fees plus a typical home-state foreign LLC registration of about $200 per year. | $500 | $375 | $1,250 |
California vs New Jersey: full comparison
| Dimension | California | New Jersey |
|---|---|---|
| Online filing Can you file the formation document online? | Yes | Yes |
| Online approval time Standard, non-expedited | 8 business days | 3 business days |
| Expedited option Paid fast-track filing | $350 | $25 |
| Annual report Required in addition to tax | Required, $20 | Required, $75 |
| State-imposed annual tax Franchise, privilege, or LLC tax minimum | $800 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 | Required by statute | Recommended, not required |
| Foreign LLC fee Cost to register as a foreign LLC in this state | $70 | $125 |
| State sales tax General statewide rate | 7.3% | 6.6% |
Taxes in California and New Jersey
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.
California tax
$800 minimum annual tax (gross-receipts-tiered basis). State income tax applies to member-level pass-through income. Corporate rate 8.8%.
New Jersey tax
No entity-level franchise tax on LLCs. State income tax applies to member-level pass-through income. Corporate rate 9.0%.
Ongoing compliance
The recurring filings each state requires after formation.
California
Annual report $20, due on your anniversary month. Registered agent required in California.
New Jersey
Annual report $75, due on your anniversary month. Registered agent required in New Jersey.
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.
California
- Check business-name availability on the California entity search.
- Appoint a registered agent with a physical California street address.
- File Articles of Organization (Form LLC-1) for $70.
- Wait for approval. Online typically 8 business days. Paid expedite from $350.
- Adopt a written operating agreement (statutorily required in California).
- 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 $20 when it comes due.
New Jersey
- Check business-name availability on the New Jersey entity search.
- Appoint a registered agent with a physical New Jersey street address.
- File Public Records Filing for New Business Entity (Certificate of Formation) for $125.
- Wait for approval. Online typically 3 business days. Paid expedite from $25.
- Adopt an operating agreement (recommended, not required by New Jersey 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 California and New Jersey (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 California or New Jersey 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
California Secretary of State, Business Programs Division
- Website
- www.sos.ca.gov/business-programs/business-entities
- Phone
- (916) 653-6814
- 1500 11th Street, Sacramento, CA 95814
- Hours
- 8:00 AM to 5:00 PM Pacific, Monday to Friday (excluding state holidays)
New Jersey Division of Revenue and Enterprise Services
- Website
- www.nj.gov/treasury/revenue
- Phone
- (609) 292-9292
- NJ Division of Revenue, P.O. Box 252, Trenton, NJ 08646-0252
- Office
- 33 West State Street, 5th Floor, Trenton, NJ 08608
- Hours
- 8:30 AM to 4:30 PM Eastern, Monday to Friday
California Franchise Tax Board
- Website
- www.ftb.ca.gov
- Phone
- (800) 852-5711
- Franchise Tax Board, P.O. Box 942857, Sacramento, CA 94257-0531
- Office
- 9646 Butterfield Way, Sacramento, CA 95827
- Hours
- 8:00 AM to 5:00 PM Pacific, Monday to Friday
New Jersey Division of Taxation
- Website
- www.nj.gov/treasury/taxation
- Phone
- (609) 292-6400
- NJ Division of Taxation, P.O. Box 248, Trenton, NJ 08646-0248
- Office
- 3 John Fitch Way, Trenton, NJ 08611
- Hours
- 8:30 AM to 4:30 PM Eastern, Monday to Friday
Frequently Asked Questions
-
Is it cheaper to form an LLC in California or New Jersey?
California is cheaper at formation ($70) than New Jersey ($125). Ongoing costs are also different: $910 vs $175 per year. Total over three years: $2,800 vs $650.
-
Can I form an LLC in California if I live in New Jersey?
Yes, but your New Jersey business will almost certainly need to register as a foreign LLC in New Jersey too, which means paying New Jersey's foreign registration fee and any ongoing New Jersey obligations on top of the California 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 California vs New Jersey?
California online: 8 business days; New Jersey online: 3 business days. California offers paid expedite from $350. New Jersey offers paid expedite from $25.
-
Which state has lower taxes for an LLC, California or New Jersey?
California: state income tax applies to member-level pass-through income, plus a $800 minimum entity-level tax. New Jersey: 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. California and New Jersey 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.
-
Do I need a written operating agreement in California or New Jersey?
California requires LLCs to adopt a written operating agreement by statute. New Jersey treats it as strongly recommended rather than required. In practice, any LLC with more than one member, or any LLC planning to preserve its liability shield, should have a written agreement regardless of which state it's formed in.
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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 California or New Jersey 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 California and New Jersey comparisons
More California vs ...
Sources
- Filing fee: bpd.cdn.sos.ca.gov/llc/forms/llc-1.pdf · verified April 21, 2026
California Secretary of State Form LLC-1 Articles of Organization. Filing fee of $70 is printed on the form instructions. Cal. Gov. Code §12190 and §17702.01 authorize the fee. - Expedited filing: www.sos.ca.gov/business-programs/business-entities/service-options · verified April 21, 2026
California Secretary of State offers preclearance and expedited filing services. Over-the-counter 24-hour expedited service is $350; same-day service is $750; 4-hour service is $500 for paper over-the-counter drop-off. Online bizfile filings are typically processed in a few business days without a separate expedite fee. - Annual report fee: www.sos.ca.gov/business-programs/business-entities/statements · verified April 21, 2026
Statement of Information (Form LLC-12) for LLCs. $20 filing fee. First filing due within 90 days of formation, then biennially by the end of the formation-anniversary month. Cal. Corp. Code §17702.09. - Franchise tax: www.ftb.ca.gov/file/business/types/limited-liability-company/index.htm… · verified April 21, 2026
California Franchise Tax Board LLC guidance. $800 annual minimum franchise tax under Cal. Rev. & Tax. Code §17941, due by the 15th day of the 4th month after the beginning of the tax year. Annual LLC fee under §17942 applies on total California-sourced income: $900/$2,500/$6,000/$11,790 for tiers starting at $250k, $500k, $1M, and $5M respectively. - Franchise tax: leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum… · verified April 21, 2026
Cal. Rev. & Tax. Code §17942 sets the gross-receipts LLC fee tiers. §17941 sets the $800 minimum franchise tax. Confirm current-year tier values on the FTB site before filing. - Operating agreement requirement: leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum… · verified April 21, 2026
Cal. Corp. Code §17701.02(s) defines 'operating agreement' and §17701.10 governs its scope; the California Revised Uniform Limited Liability Company Act (RULLCA) operates on the assumption that every LLC has an operating agreement (oral, written, or implied). Statute does not mandate a written, filed agreement, but the RULLCA regime is premised on one existing; California is widely characterized as an 'operating agreement required' state. Members rely on default statutory rules if no agreement is adopted. - Foreign LLC registration fee: bpd.cdn.sos.ca.gov/llc/forms/llc-5.pdf · verified April 21, 2026
Form LLC-5 Application to Register a Foreign LLC. Filing fee $70. Foreign LLCs are subject to the same $800 annual franchise tax and Statement of Information requirements as domestic LLCs. - Publication requirement: www.sos.ca.gov/business-programs/business-entities/forms · verified April 21, 2026
California does not require newspaper publication for LLC formation. Confirmed via absence of requirement in Cal. Corp. Code §17702.01 and the SoS LLC filing instructions. - Business name search: bizfileonline.sos.ca.gov/search/business · verified April 21, 2026
California bizfile Online business search tool. Confirm name availability before filing Articles of Organization. - Sales tax rate: www.cdtfa.ca.gov/taxes-and-fees/sut-rates-description.htm · verified April 21, 2026
California Department of Tax and Fee Administration: statewide base sales and use tax rate is 7.25% (6.00% state + 1.25% uniform local). Combined rates with district taxes range from 7.25% to over 10.75% in some jurisdictions. - Corporate income tax rate: www.ftb.ca.gov/file/business/types/corporations/index.html · verified April 21, 2026
California corporate franchise tax rate is 8.84% on net income for C-corporations. Applies to LLCs electing C-corp treatment; otherwise LLCs flow through to member personal returns. - Filing fee: www.nj.gov/treasury/revenue/fees.shtml · verified April 21, 2026
NJ Division of Revenue and Enterprise Services fee schedule: Certificate of Formation (domestic LLC) = $125. Same fee applies whether filing online, by mail, in person, or by fax. - Expedited filing: www.nj.gov/treasury/revenue/fees.shtml · verified April 21, 2026
NJ DORES expedited (over-the-counter) fee schedule: $25 per filing for standard expedited/OTC, $50 same-day fax, $500 2-hour service, $1,000 1-hour service. Report $25 OTC as the cheapest expedited tier. Online standard filings typically process within 1–3 business days without a separate expedite charge. - Certificate of Formation form: www.njportal.com/dor/businessformation/home/welcome · verified April 21, 2026
New Jersey does not publish a single fillable Certificate of Formation PDF specifically for LLCs. Formation is accomplished via the online 'Business Formation' portal (Public Records Filing for New Business Entity). Form L-102 is used only for amendments. Paper filers draft their own certificate per N.J.S.A. 42:2C-18. - Business name search: www.njportal.com/DOR/BusinessNameSearch/Search/BusinessName · verified April 21, 2026
New Jersey Business Name Search, operated by the Division of Revenue and Enterprise Services. Used to check name availability before filing a Certificate of Formation. - Operating agreement requirement: law.justia.com/codes/new-jersey/title-42/section-42-2c-11/ · verified April 21, 2026
N.J.S.A. 42:2C-11 defines and governs the operating agreement under the New Jersey Revised Uniform Limited Liability Company Act (RULLCA). Agreements may be written, oral, or implied; the statute does not require an LLC to adopt one. Default RULLCA provisions fill gaps. Justia is used as a neutral statute mirror because the legislature's official site (pub.njleg.gov) is often WAF-blocked. - Publication requirement: www.nj.gov/treasury/revenue/gettingregistered.shtml · verified April 21, 2026
New Jersey does not require LLCs to publish a notice of formation. Neither N.J.S.A. 42:2C-18 nor the DORES 'Getting Registered' guide imposes any newspaper-publication obligation. - Foreign LLC registration fee: www.nj.gov/treasury/revenue/fees.shtml · verified April 21, 2026
NJ DORES fee schedule: Certificate of Registration (foreign LLC) = $125. - Annual report fee: www.nj.gov/treasury/revenue/busrecords.shtml · verified April 21, 2026
NJ Annual Report filing fee for domestic and foreign LLCs = $75. Due on the last day of the LLC's anniversary month each year via the online Annual Report portal at njportal.com/DOR/annualreports. - Franchise tax: www.nj.gov/treasury/taxation/prntpart.shtml · verified April 21, 2026
NJ Division of Taxation Partnership Returns page and TB-55. LLCs taxed as partnerships pay a $150 per-owner Partnership Filing Fee (cap $250,000) with Form NJ-1065 under N.J.S.A. 54A:8-6. This is a filing fee, not a franchise tax, and it does not apply if the LLC elects C-corp treatment (which instead triggers the Corporation Business Tax). We record franchiseTax.applies = false because the state does not label or structure this as a franchise tax and it is capped at a per-owner count, not an entity minimum. - Corporate income tax rate: www.nj.gov/treasury/taxation/corp_over.shtml · verified April 21, 2026
NJ Division of Taxation Corporation Business Tax: tiered rates 6.5% (ENI ≤ $50k), 7.5% (ENI $50k–$100k), 9.0% (ENI > $100k). A 2.5% Corporate Transit Fee (CTF) applies on top of the 9% rate for taxpayers with allocated taxable net income above $10M, enacted 2024 and codified at N.J.S.A. 54:10A-5.41. We record the statutory 9% rate in the field; combined effective top rate of 11.5% is noted in taxes.notes. - Sales tax rate: www.nj.gov/treasury/taxation/businesses/salestax/index.shtml · verified April 21, 2026
NJ Division of Taxation Sales and Use Tax: statewide rate 6.625% since 2018 (N.J.S.A. 54:32B-3). No general local sales tax; Urban Enterprise Zones tax at half rate (3.3125%) on qualifying in-person sales, and Atlantic City imposes additional luxury/tourism taxes on specific purchases.