Illinois vs New Jersey LLC: fees, taxes, and which to pick
Data last updated: Apr 21, 2026Illinois charges $150 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 $25 less in total state fees than Illinois. Whether that gap matters depends on whether you actually operate in one of these states or are weighing a non-resident filing.
On speed, New Jersey 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
- New Jersey costs $25 less to form ($125 vs $150).
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.
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 Illinois, business operates there No foreign LLC registration needed. You pay Illinois fees only. | $325 | $175 | $675 |
| 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 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 |
| 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 |
Illinois vs New Jersey: full comparison
| Dimension | Illinois | New Jersey |
|---|---|---|
| Online filing Can you file the formation document online? | Yes | Yes |
| Online approval time Standard, non-expedited | 10 business days | 3 business days |
| Expedited option Paid fast-track filing | $100 | $25 |
| Annual report Required in addition to tax | Required, $75 | Required, $75 |
| State-imposed annual tax Franchise, privilege, or LLC tax minimum | None | 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 | $150 | $125 |
| State sales tax General statewide rate | 6.3% | 6.6% |
Taxes in Illinois 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.
Illinois tax
No entity-level franchise tax on LLCs. State income tax applies to member-level pass-through income. Corporate rate 7.0%.
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.
Illinois
Annual report $75, due on your anniversary month. Registered agent required in Illinois.
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.
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.
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 Illinois 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 Illinois 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
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
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
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
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 Illinois or New Jersey?
New Jersey is cheaper at formation ($125) than Illinois ($150). Ongoing costs are also different: $175 vs $175 per year. Total over three years: $650 vs $675.
-
Can I form an LLC in Illinois 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 Illinois 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 Illinois vs New Jersey?
Illinois online: 10 business days; New Jersey online: 3 business days. Illinois offers paid expedite from $100. New Jersey offers paid expedite from $25.
-
Which state has lower taxes for an LLC, Illinois or New Jersey?
Illinois: state income tax applies to member-level pass-through income, no entity-level franchise or LLC 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. Illinois 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.
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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 Illinois 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 Illinois and New Jersey comparisons
More Illinois vs ...
Sources
- 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. - 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.