State Comparison

Wyoming vs Illinois LLC

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

Wyoming

Filing fee$100

Processing5–10 days

Annual report$60

State income taxNone

None

Illinois

Filing fee$150

Processing5–10 days

Annual report$75

State income tax4.95% flat

1.5% replacement tax on S-corp net income

Lower state fees:

Wyoming — $160 total 1st-year state fees

Excludes franchise tax, registered agent, and other compliance costs

Pros and Cons

Wyoming (WY)

Pros

Lowest ongoing costs in the US ($60 annual report)
Strongest charging order protection in the nation
No state income tax
Strong privacy — member names not public
LLC-friendly statute favors owners over creditors

Cons

Foreign qualification required if operating in another state
Less developed case law than Delaware
Not preferred by most institutional investors

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)

Side-by-Side Comparison

Feature	Wyoming	Illinois
LLC filing fee	$100	$150
Corporation filing fee	$100	$150
Annual report fee	$60	$75
Processing time	5–10 days	5–10 days
State income tax	None	4.95% flat
Franchise / entity tax	None	1.5% replacement tax on S-corp net income
Popular formation state?	Yes	No

Which Should You Choose?

Choose Wyoming if...

• Best for asset protection and holding companies

• Ideal for non-resident founders (US nexus without tax)

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

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.

FAQ

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

Wyoming charges $100 filing + $60 annual report. Illinois charges $150 filing + $75 annual report. Wyoming is the cheaper option on state fees alone, though franchise tax and other compliance costs also matter.

Should I form my LLC in Wyoming or Illinois?

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

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

Yes, but you'll need to "foreign qualify" in Illinois, which means paying a registration fee in Illinois plus ongoing compliance in both states. You'll also typically owe Illinois 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 Wyoming vs Illinois?

Wyoming: None — plus $100-$300/yr for a registered agent. Illinois: 1.5% replacement tax on S-corp net income — 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 — Wyoming or Illinois?

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

Wyoming resources

Illinois resources

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Pros and Cons

Wyoming (WY)

Pros

Lowest ongoing costs in the US ($60 annual report)
Strongest charging order protection in the nation
No state income tax
Strong privacy — member names not public
LLC-friendly statute favors owners over creditors

Cons

Foreign qualification required if operating in another state
Less developed case law than Delaware
Not preferred by most institutional investors

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)

Feature

Wyoming

Illinois

LLC filing fee

$100

$150

Corporation filing fee

$100

$150

Annual report fee

$60

$75

Processing time

5–10 days

State income tax

None

4.95% flat

Franchise / entity tax

None

1.5% replacement tax on S-corp net income

Popular formation state?

Yes

Which Should You Choose?

Choose Wyoming if...

• Best for asset protection and holding companies

• Ideal for non-resident founders (US nexus without tax)

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

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.