Is it cheaper to form an LLC in Illinois or New York?

Illinois is cheaper at formation ($150) than New York ($200). Ongoing costs are also different: $175 vs $130 per year. Total over three years: $675 vs $590.

Can I form an LLC in Illinois if I live in New York?

Yes, but your New York business will almost certainly need to register as a foreign LLC in New York too, which means paying New York's foreign registration fee and any ongoing New York 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 York?

Illinois online: 10 business days; New York online: 3 business days. Illinois offers paid expedite from $100. New York offers paid expedite from $25.

Which state has lower taxes for an LLC, Illinois or New York?

Illinois: state income tax applies to member-level pass-through income, no entity-level franchise or LLC tax. New York: state income tax applies to member-level pass-through income, plus a $25 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. Illinois and New York 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.

Does Illinois or New York have a publication requirement?

New York 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. Illinois has no publication requirement.

Do I need a written operating agreement in Illinois or New York?

New York requires LLCs to adopt a written operating agreement by statute. Illinois 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.

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 York 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.

Illinois vs New York LLC comparison

Illinois charges $150 to form an LLC; New York charges $200. 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 York runs about $86 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.

New York imposes an entity-level annual tax on every LLC ($25 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, New York 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.

Formation filing fee

Illinois $150

New York $200

Illinois saves $50

Year 1 total estimate

Illinois $325

New York $330

Illinois saves $5

Ongoing per year

Illinois $175

New York $130

New York saves $45

3-year total

Illinois $675

New York $590

New York saves $86

Key differences at a glance

Illinois costs $50 less to form ($150 vs $200).
New York is $45 per year cheaper to maintain ($130 vs $175).
New York imposes an entity-level franchise or LLC tax that applies to pass-through LLCs. Illinois does not.
New York requires newly formed LLCs to publish a formation notice in local newspapers; this can add $50 to $1,800 depending on county.
New York 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 Illinois

No entity-level franchise or LLC tax
No publication requirement
Operating agreement not statutorily required

Both states

Online filing
Paid expedited tier

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.

Illinois New York

Year 1

$325

$330

Year 2

$500

$460

Year 3

$675

$590

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 York, business operates there No foreign LLC registration needed. You pay New York fees only.	$330	$130	$590
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 York with operations elsewhere You pay New York's fees plus a typical home-state foreign LLC registration of about $200 per year.	$530	$330	$1,190

Illinois vs New York: full comparison

Dimension	Illinois	New York
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, $9
State-imposed annual tax Franchise, privilege, or LLC tax minimum	None	$25 minimum
State income tax On pass-through LLC income at member level	Yes	Yes
Publication requirement Newspaper publication after formation	No	Required
Operating agreement Required by state statute	Recommended, not required	Required by statute
Foreign LLC fee Cost to register as a foreign LLC in this state	$150	$250
State sales tax General statewide rate	6.3%	4.0%

Taxes in Illinois and New York

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 York tax

$25 minimum annual tax (gross-receipts-tiered basis). State income tax applies to member-level pass-through income. Corporate rate 7.3%.

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 York

Annual report $9, due on your anniversary month. Registered agent required in New York.

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 York

Prepare a publication-ready notice (required in New York).
Check business-name availability on the New York entity search.
Appoint a registered agent with a physical New York street address.
File Articles of Organization (DOS-1336) for $200.
Wait for approval. Online typically 3 business days. Paid expedite from $25.
Adopt a written operating agreement (statutorily required in New York).
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 $9 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 York (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 York 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
Mail: 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 York Department of State - Division of Corporations, State Records and Uniform Commercial Code

Website: dos.ny.gov/division-corporations-state-records-and-uniform-commercial-code
Phone: (518) 473-2492
Mail: Department of State, Division of Corporations, State Records, and Uniform Commercial Code, One Commerce Plaza, 99 Washington Avenue, Albany, NY 12231
Office: One Commerce Plaza, 99 Washington Avenue, 6th Floor, Albany, NY 12231
Hours: 9:00 AM to 4:30 PM Eastern, Monday to Friday

Illinois Department of Revenue

Website: tax.illinois.gov
Phone: (800) 732-8866
Mail: 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 York State Department of Taxation and Finance

Website: www.tax.ny.gov
Phone: (518) 457-5181
Mail: NYS Department of Taxation and Finance, W.A. Harriman Campus, Albany, NY 12227
Office: W.A. Harriman Campus, Albany, NY 12227
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 York?

Illinois is cheaper at formation ($150) than New York ($200). Ongoing costs are also different: $175 vs $130 per year. Total over three years: $675 vs $590.
Can I form an LLC in Illinois if I live in New York?

Yes, but your New York business will almost certainly need to register as a foreign LLC in New York too, which means paying New York's foreign registration fee and any ongoing New York 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 York?

Illinois online: 10 business days; New York online: 3 business days. Illinois offers paid expedite from $100. New York offers paid expedite from $25.
Which state has lower taxes for an LLC, Illinois or New York?

Illinois: state income tax applies to member-level pass-through income, no entity-level franchise or LLC tax. New York: state income tax applies to member-level pass-through income, plus a $25 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. Illinois and New York 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.
Does Illinois or New York have a publication requirement?

New York 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. Illinois has no publication requirement.
Do I need a written operating agreement in Illinois or New York?

New York requires LLCs to adopt a written operating agreement by statute. Illinois 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.
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 York 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

IllinoisOpen Illinois LLC guide →
New YorkOpen New York LLC guide →

More Illinois and New York comparisons

More Illinois vs ...

More New York 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: dos.ny.gov/fee-schedules · verified April 21, 2026
NY DOS Division of Corporations fee schedule: domestic LLC Articles of Organization filing fee = $200. Professional service LLC same fee.
Expedited filing: dos.ny.gov/fee-schedules · verified April 21, 2026
Expedited surcharges on top of the filing fee: 24 hours = $25, same day = $75, 2 hours = $150. We report the cheapest 24-hour tier. Biennial Statements cannot be expedited.
Foreign LLC registration fee: dos.ny.gov/application-authority-foreign-limited-liability-companies · verified April 21, 2026
Foreign LLC Application for Authority filing fee = $250 (standard). Professional service foreign LLC = $200. Foreign LLCs are also subject to the publication requirement.
Operating agreement requirement: www.nysenate.gov/legislation/laws/LLC/417 · verified April 21, 2026
NY LLC Law Section 417(a): 'the members of a limited liability company shall adopt a written operating agreement.' Must be adopted before, at, or within 90 days after the filing of the Articles of Organization. The agreement is not filed with the state, but is statutorily required.
Publication requirement: www.nysenate.gov/legislation/laws/LLC/206 · verified April 21, 2026
NY LLC Law Section 206 requires publication of a notice of LLC formation in two newspapers for six consecutive weeks within 120 days of formation, followed by filing a Certificate of Publication ($50) with DOS. Failure to publish suspends the LLC's authority to carry on, conduct, or transact business in New York. Cost ranges are referenced via county clerk designations; representative estimate ~$1,200 mid-range.
Annual report fee: dos.ny.gov/biennial-statements-business-corporations-and-limited-liabi… · verified April 21, 2026
Biennial Statement fee = $9, mandated by NY LLC Law Section 301(e). Filed via the e-Statement Filing Service. Filing period is the calendar month of original Articles of Organization filing, every two years.
Franchise tax: www.tax.ny.gov/pit/efile/annual_filing_fee.htm · verified April 21, 2026
New York charges an annual LLC filing fee on Form IT-204-LL, tiered by NY source gross income: <=$100k = $25; $100,001-$250,000 = $50; $250,001-$500,000 = $175; $500,001-$1M = $500; $1M-$5M = $1,500; $5M-$25M = $3,000; over $25M = $4,500. Disregarded-entity single-member LLCs pay a flat $25. Recorded as gross-receipts-tiered franchise-style charge because it functions as a mandatory annual state charge on the LLC entity even when pass-through.
Corporate income tax rate: www.tax.ny.gov/bus/ct/def_art9a.htm · verified April 21, 2026
Article 9-A NY corporate franchise tax: base rate 6.5% for most corporations; 7.25% applies to business income over $5M (extended through 2026 under the 2021 state budget). LLCs are pass-through by default and do not owe Article 9-A unless they elect C-corp status federally.
Sales tax rate: www.tax.ny.gov/bus/st/stidx.htm · verified April 21, 2026
NY statewide sales and use tax rate is 4%. Local jurisdictions add additional rates; combined rates range from about 7% to 8.875% (NYC). We record the statewide rate only.
Business name search: apps.dos.ny.gov/publicInquiry/ · verified April 21, 2026
NY DOS Division of Corporations Public Inquiry entity search. Can lookup by entity name or DOS ID.
Online filing portal: dos.ny.gov/articles-organization-domestic-limited-liability-company-0 · verified April 21, 2026
Official DOS page for Articles of Organization for domestic LLCs. Links to online filing. Acknowledgement receipt emailed within minutes; processing typically completed in 2-3 business days.
Certificate of Formation name: dos.ny.gov/system/files/documents/2024/05/articles-of-organization.pdf… · verified April 21, 2026
Form DOS-1336, Articles of Organization for a Domestic Limited Liability Company, published by the NY DOS Division of Corporations.

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