State Comparison

Illinois vs Nevada LLC

Side-by-side comparison of forming an LLC in Illinois vs Nevada — fees, processing times, taxes, and decision factors to help you choose the right state for your business.

Illinois

Filing fee$150

Processing5–10 days

Annual report$75

State income tax4.95% flat

1.5% replacement tax on S-corp net income

Nevada

Filing fee$75

Processing5–10 days

Annual report$350

State income taxNone

$200 annual business license + $350 annual list

Lower state fees:

Illinois — $225 total 1st-year state fees

Excludes franchise tax, registered agent, and other compliance costs

Pros and Cons

Illinois (IL)

Pros

PTET election available to work around SALT cap
Strong Midwest economy centered on Chicago
Moderate state filing fees

Cons

1.5% replacement tax on S-corp net income
Annual report deadlines trigger loss of good standing if missed
Relatively high state income tax (4.95% flat)

Nevada (NV)

Pros

Strong charging order protection
No state income tax
Privacy — member names not on public filings
No information sharing agreement with IRS
Strong asset protection statutes

Cons

Expensive: $350 annual list + $200 business license = $550/yr minimum
Foreign qualification required if operating in home state
Recent fee increases have made it less competitive vs Wyoming

Side-by-Side Comparison

Feature	Illinois	Nevada
LLC filing fee	$150	$75
Corporation filing fee	$150	$75
Annual report fee	$75	$350
Processing time	5–10 days	5–10 days
State income tax	4.95% flat	None
Franchise / entity tax	1.5% replacement tax on S-corp net income	$200 annual business license + $350 annual list
Popular formation state?	No	Yes

Which Should You Choose?

Choose Illinois if...

• PTET is a meaningful SALT-cap workaround for high earners

• Consider if operating in Chicago metro

• You live or operate primarily in Illinois — forming locally avoids foreign qualification costs and compliance in multiple states.

Choose Nevada if...

• Once a top privacy destination, now pricier than Wyoming

• Best for in-state operations (Las Vegas hospitality, Reno tech)

• You live or operate primarily in Nevada — forming locally avoids foreign qualification costs and compliance in multiple states.

FAQ

Is it cheaper to form an LLC in Illinois or Nevada?

Illinois charges $150 filing + $75 annual report. Nevada charges $75 filing + $350 annual report. Illinois is the cheaper option on state fees alone, though franchise tax and other compliance costs also matter.

Should I form my LLC in Illinois or Nevada?

For most businesses, form in the state where you actually operate. Illinois (4.95% flat state income tax) and Nevada (None state income tax) each have their specific characteristics. If you physically operate in one of these states, form there. Forming in Illinois while operating in Nevada (or vice versa) means paying fees in both states.

Can I form my LLC in Illinois and operate in Nevada?

Yes, but you'll need to "foreign qualify" in Nevada, which means paying a registration fee in Nevada plus ongoing compliance in both states. You'll also typically owe Nevada state taxes on income earned there regardless of where the LLC is formed. Forming in a single state (usually your home state) is typically cleaner and cheaper for small businesses.

What are the annual costs for an LLC in Illinois vs Nevada?

Illinois: 1.5% replacement tax on S-corp net income — plus $100-$300/yr for a registered agent. Nevada: $200 annual business license + $350 annual list — plus $100-$300/yr for a registered agent. Budget an additional $500-$2,000/yr for accounting, bookkeeping, and business license renewals regardless of state.

Which state has better asset protection — Illinois or Nevada?

Asset protection varies by state statute. States like Wyoming, Nevada, and Delaware have the strongest charging-order-exclusive doctrines for LLC members. Illinois and Nevada both offer LLC liability protection, but consult an attorney for state-specific asset protection planning if you have significant personal assets to shield.

Illinois resources

Nevada resources

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Pros and Cons

Illinois (IL)

Pros

PTET election available to work around SALT cap
Strong Midwest economy centered on Chicago
Moderate state filing fees

Cons

1.5% replacement tax on S-corp net income
Annual report deadlines trigger loss of good standing if missed
Relatively high state income tax (4.95% flat)

Nevada (NV)

Pros

Strong charging order protection
No state income tax
Privacy — member names not on public filings
No information sharing agreement with IRS
Strong asset protection statutes

Cons

Expensive: $350 annual list + $200 business license = $550/yr minimum
Foreign qualification required if operating in home state
Recent fee increases have made it less competitive vs Wyoming

Side-by-Side Comparison

Feature	Illinois	Nevada
LLC filing fee	$150	$75
Corporation filing fee	$150	$75
Annual report fee	$75	$350
Processing time	5–10 days	5–10 days
State income tax	4.95% flat	None
Franchise / entity tax	1.5% replacement tax on S-corp net income	$200 annual business license + $350 annual list
Popular formation state?	No	Yes

Which Should You Choose?

Choose Illinois if...

• PTET is a meaningful SALT-cap workaround for high earners

• Consider if operating in Chicago metro

• You live or operate primarily in Illinois — forming locally avoids foreign qualification costs and compliance in multiple states.

Choose Nevada if...

• Once a top privacy destination, now pricier than Wyoming

• Best for in-state operations (Las Vegas hospitality, Reno tech)

• You live or operate primarily in Nevada — forming locally avoids foreign qualification costs and compliance in multiple states.