Is it cheaper to form an LLC in Colorado or Montana?

Montana is cheaper at formation ($35) than Colorado ($50). Ongoing costs are also different: $100 vs $125 per year. Total over three years: $335 vs $425.

Can I form an LLC in Colorado if I live in Montana?

Yes, but your Montana business will almost certainly need to register as a foreign LLC in Montana too, which means paying Montana's foreign registration fee and any ongoing Montana obligations on top of the Colorado 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 Colorado vs Montana?

Colorado online: 1 business day; Montana online: 5 business days. Colorado does not offer paid expedite. Montana offers paid expedite from $20.

Which state has lower taxes for an LLC, Colorado or Montana?

Colorado: state income tax applies to member-level pass-through income, no entity-level franchise or LLC tax. Montana: 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. Colorado and Montana 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.

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 Colorado or Montana 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.

Colorado vs Montana LLC comparison

Colorado charges $50 to form an LLC; Montana charges $35. 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, Montana runs about $90 less in total state fees than Colorado. Whether that gap matters depends on whether you actually operate in one of these states or are weighing a non-resident filing.

On speed, Colorado typically clears standard online filings faster than Montana. 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

Colorado $50

Montana $35

Montana saves $15

Year 1 total estimate

Colorado $175

Montana $135

Montana saves $40

Ongoing per year

Colorado $125

Montana $100

Montana saves $25

3-year total

Colorado $425

Montana $335

Montana saves $90

Key differences at a glance

Montana costs $15 less to form ($35 vs $50).
Montana is $25 per year cheaper to maintain ($100 vs $125).

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 Montana

Paid expedited tier
No state sales tax

Both states

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

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.

Colorado Montana

Year 1

$175

$135

Year 2

$300

$235

Year 3

$425

$335

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 Colorado, business operates there No foreign LLC registration needed. You pay Colorado fees only.	$175	$125	$425
You live in Montana, business operates there No foreign LLC registration needed. You pay Montana fees only.	$135	$100	$335
Non-resident forming in Colorado with operations elsewhere You pay Colorado's fees plus a typical home-state foreign LLC registration of about $200 per year.	$375	$325	$1,025
Non-resident forming in Montana with operations elsewhere You pay Montana's fees plus a typical home-state foreign LLC registration of about $200 per year.	$335	$300	$935

Colorado vs Montana: full comparison

Dimension	Colorado	Montana
Online filing Can you file the formation document online?	Yes	Yes
Online approval time Standard, non-expedited	1 business day	5 business days
Expedited option Paid fast-track filing	Not offered	$20
Annual report Required in addition to tax	Required, $25	Required, $0
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	$100	$70
State sales tax General statewide rate	2.9%	None

Taxes in Colorado and Montana

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.

Colorado tax

No entity-level franchise tax on LLCs. State income tax applies to member-level pass-through income. Corporate rate 4.4%.

Montana tax

No entity-level franchise tax on LLCs. State income tax applies to member-level pass-through income. Corporate rate 6.8%.

Ongoing compliance

The recurring filings each state requires after formation.

Colorado

Annual report $25, due on your anniversary month. Registered agent required in Colorado.

Montana

Annual report $0, due 04/15 each year. Registered agent required in Montana.

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.

Colorado

Check business-name availability on the Colorado entity search.
Appoint a registered agent with a physical Colorado street address.
File Articles of Organization for a Limited Liability Company for $50.
Wait for approval. Online typically 1 business days. No paid expedite offered.
Adopt an operating agreement (recommended, not required by Colorado 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 $25 when it comes due.

Montana

Check business-name availability on the Montana entity search.
Appoint a registered agent with a physical Montana street address.
File Articles of Organization for Domestic Limited Liability Company for $35.
Wait for approval. Online typically 5 business days. Paid expedite from $20.
Adopt an operating agreement (recommended, not required by Montana 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 $0 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 Colorado and Montana (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 Colorado or Montana 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

Colorado Secretary of State - Business Division

Website: www.coloradosos.gov/pubs/business/main.html
Phone: (303) 894-2200
Email: sos.business@coloradosos.gov
Mail: Colorado Secretary of State, 1700 Broadway, Suite 550, Denver, CO 80290
Office: 1700 Broadway, Suite 550, Denver, CO 80290
Hours: 8:00 AM to 5:00 PM Mountain, Monday to Friday

Montana Secretary of State - Business Services Division

Website: sosmt.gov
Phone: (406) 444-3665
Email: sosbusiness@mt.gov
Mail: Business Services, Montana Secretary of State, P.O. Box 202801, Helena, MT 59620-2801
Office: State Capitol, Room 260, 1301 6th Avenue, Helena, MT 59620
Hours: 8:00 AM to 5:00 PM Mountain, Monday to Friday

Colorado Department of Revenue - Taxation Division

Website: tax.colorado.gov
Phone: (303) 238-7378
Mail: Colorado Department of Revenue, P.O. Box 17087, Denver, CO 80217-0087
Office: 1881 Pierce St, Lakewood, CO 80214
Hours: 8:00 AM to 4:30 PM Mountain, Monday to Friday

Montana Department of Revenue

Website: mtrevenue.gov
Phone: (406) 444-6900
Mail: Montana Department of Revenue, P.O. Box 8021, Helena, MT 59604-8021
Office: 125 N Roberts Street, Helena, MT 59601
Hours: 8:00 AM to 5:00 PM Mountain, Monday to Friday

Frequently Asked Questions

Is it cheaper to form an LLC in Colorado or Montana?

Montana is cheaper at formation ($35) than Colorado ($50). Ongoing costs are also different: $100 vs $125 per year. Total over three years: $335 vs $425.
Can I form an LLC in Colorado if I live in Montana?

Yes, but your Montana business will almost certainly need to register as a foreign LLC in Montana too, which means paying Montana's foreign registration fee and any ongoing Montana obligations on top of the Colorado 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 Colorado vs Montana?

Colorado online: 1 business day; Montana online: 5 business days. Colorado does not offer paid expedite. Montana offers paid expedite from $20.
Which state has lower taxes for an LLC, Colorado or Montana?

Colorado: state income tax applies to member-level pass-through income, no entity-level franchise or LLC tax. Montana: 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. Colorado and Montana 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.
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 Colorado or Montana 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

ColoradoOpen Colorado LLC guide →
MontanaOpen Montana LLC guide →

More Colorado and Montana comparisons

More Colorado vs ...

More Montana vs ...

Sources

Filing fee: www.sos.state.co.us/pubs/info_center/fees/business.html · verified April 21, 2026
Colorado Secretary of State Business Organizations Fee Schedule: 'Limited liability company - Articles of Organization' = $50.00 online fee. Colorado accepts electronic filings only; there is no paper-filing option for new LLC Articles of Organization.
Expedited filing: www.sos.state.co.us/pubs/info_center/fees/business.html · verified April 21, 2026
Colorado does not offer expedited processing for standard online LLC filings because online filings are effectively processed same day (typically within 1 business day). An 'Expedited Service' line for paper document filing at $150 exists on the fee schedule, but it applies only to the limited categories of paper filings Colorado still accepts. For the LLC Articles of Organization (online-only), expedited service is not offered.
Foreign LLC registration fee: www.sos.state.co.us/pubs/info_center/fees/business.html · verified April 21, 2026
Foreign Entity Authority Statement = $100.00 online fee.
Operating agreement requirement: law.justia.com/codes/colorado/title-7/limited-liability-companies/arti… · verified April 21, 2026
C.R.S. §7-80-108 (Colorado Limited Liability Company Act). Operating agreements are permitted but not required, and need not be in writing except where a written form is specifically required (e.g. certain transfer restrictions under §7-80-108(3)). Recorded as not required. Justia is used here as a neutral statute mirror because the official Colorado legislative site (leg.colorado.gov) does not expose a stable per-section URL and the SoS reference page lists statutes only as PDF downloads.
Publication requirement: www.sos.state.co.us/pubs/info_center/laws/CRSTitle7index.html · verified April 21, 2026
Colorado imposes no LLC newspaper publication requirement. Colorado Title 7 Article 80 (the Colorado Limited Liability Company Act) contains no publication provision.
Annual report fee: www.sos.state.co.us/pubs/info_center/fees/business.html · verified April 21, 2026
Periodic Report = $25.00 online (online filing is the only option). Periodic Report Late Filing Penalty = $50.00. Fee increased from $10 to $25 effective July 1, 2024 per Colorado SoS press release.
Annual report: www.sos.state.co.us/pubs/business/FAQs/reports.html · verified April 21, 2026
SoS Periodic Reports FAQ (Q4): 'The Periodic Report can be filed two months prior to the Periodic Report month or two months after without any penalty.' The Periodic Report month corresponds to the month the entity was originally formed or registered in Colorado. Statutory basis: C.R.S. §7-90-501.
Franchise tax: tax.colorado.gov/corporate-income-tax-guide · verified April 21, 2026
Colorado has no franchise tax on LLCs or corporations. The Department of Revenue publishes only corporate income tax (flat 4.4%) and individual income tax (flat 4.4%) guidance; no capital-based or share-based franchise tax exists.
Corporate income tax rate: tax.colorado.gov/corporate-income-tax-guide · verified April 21, 2026
Colorado corporate income tax is a flat 4.4% rate on federal taxable income attributable to Colorado (C.R.S. §39-22-301), tax year 2024 and forward. LLCs are pass-through by default and do not owe corporate income tax unless they elect C-corp taxation. A Pass-Through Entity (SALT Parity) election allows LLCs to pay at entity level at the same 4.4% rate.
Sales tax rate: tax.colorado.gov/sales-tax-guide · verified April 21, 2026
Colorado statewide sales tax rate is 2.9%. Many Colorado cities are 'home-rule' and self-administer local sales tax, so combined state+local rates vary widely (commonly 4%-11%+). Only the 2.9% statewide rate is recorded here.
Business name search: www.coloradosos.gov/biz/BusinessEntityCriteriaExt.do · verified April 21, 2026
Colorado SoS Business Database Search. Resolves successfully in 2026. Note: the coloradosos.gov and sos.state.co.us domains both serve the same SoS website.
Filing fee: sosmt.gov/business/fees/ · verified April 21, 2026
Montana SoS Business Services fee schedule: Articles of Organization filing fee = $35.00 (plus $50 per series member for a series LLC). All business filings are online-only through biz.sosmt.gov.
Expedited filing: sosmt.gov/business/fees/ · verified April 21, 2026
Expedited service: 24 hours = $20, 1 hour = $100. We record the cheapest tier (24-hour) as the default.
Foreign LLC registration fee: sosmt.gov/business/fees/ · verified April 21, 2026
Foreign LLC Certificate of Authority filing fee = $70.00 (plus $50 per series member for a series LLC).
Operating agreement requirement: archive.legmt.gov/bills/mca/title_0350/chapter_0080/part_0010/sections… · verified April 21, 2026
Montana Limited Liability Company Act, MCA Title 35, Chapter 8, does not require a written operating agreement. MCA 35-8-102 defines 'operating agreement' broadly; the statute lets the default provisions of Chapter 8 govern if no operating agreement exists.
Publication requirement: sosmt.gov/business/ · verified April 21, 2026
Montana statutes and SoS filing instructions contain no LLC publication requirement.
Annual report fee: sosmt.gov/secretary-christi-jacobsen-continues-montana-business-suppor… · verified April 21, 2026
Montana SoS announced that the annual report filing fee is waived for 2026 and 2027 for on-time filings (Jan 1 - Apr 15). Fourth consecutive year of waiver. Late filings after April 15 remain $35. Cross-referenced with the fee schedule at https://sosmt.gov/business/fees/.
Franchise tax: revenue.mt.gov/taxes/corporate-income-tax · verified April 21, 2026
Montana Department of Revenue: no franchise tax on LLCs. Only entities that elect C-corp status pay the corporate income tax, which is not a franchise tax. Pass-through LLCs owe no entity-level state tax.
Corporate income tax rate: revenue.mt.gov/taxes/corporate-income-tax · verified April 21, 2026
Montana corporate income tax: 6.75% standard rate; 7% for water's-edge election; $50 minimum tax. LLCs that default to pass-through do not owe this tax.
Sales tax rate: mtrevenue.gov/ · verified April 21, 2026
Montana has no general statewide sales tax (0%). Industry-specific taxes apply to lodging, rental cars, and a few other categories but not to general retail.
Business name search: biz.sosmt.gov/search/business · verified April 21, 2026
Montana SoS Online Business Services entity name search. Confirm name distinguishability before filing.
Online filing portal: biz.sosmt.gov/ · verified April 21, 2026
Montana SoS Online Business Services portal. Montana accepts LLC formation filings online only; mail filings are not accepted for Articles of Organization. Standard processing averages 3-6 business days; expedite tiers available.

Legal Disclaimer: FreeNetLaw provides general legal information, not legal advice. The information on this site is not a substitute for consultation with a licensed attorney. Laws vary by jurisdiction and change frequently. Always verify information with official sources and consult a qualified attorney for advice about your specific situation.