Montana vs Tennessee LLC: fees, taxes, and which to pick
Data last updated: Apr 21, 2026Montana charges $35 to form an LLC; Tennessee charges $300. 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 $1,465 less in total state fees than Tennessee. Whether that gap matters depends on whether you actually operate in one of these states or are weighing a non-resident filing.
Tennessee imposes an entity-level annual tax on every LLC ($100 minimum). Montana does not. For pass-through LLCs that would otherwise owe nothing at the state level, that minimum is the deciding line.
On speed, Tennessee 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.
Key differences at a glance
- Montana costs $265 less to form ($35 vs $300).
- Montana is $400 per year cheaper to maintain ($100 vs $500).
- Tennessee has no state individual income tax; pass-through LLC income flows to members without a state layer. The other state does tax at the member level.
- Tennessee imposes an entity-level franchise or LLC tax that applies to pass-through LLCs. Montana does not.
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
- No entity-level franchise or LLC tax
Only Tennessee
- No state income tax
Both states
- Online filing
- 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.
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 Montana, business operates there No foreign LLC registration needed. You pay Montana fees only. | $135 | $100 | $335 |
| You live in Tennessee, business operates there No foreign LLC registration needed. You pay Tennessee fees only. | $800 | $500 | $1,800 |
| 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 |
| Non-resident forming in Tennessee with operations elsewhere You pay Tennessee's fees plus a typical home-state foreign LLC registration of about $200 per year. | $1,000 | $700 | $2,400 |
Montana vs Tennessee: full comparison
| Dimension | Montana | Tennessee |
|---|---|---|
| Online filing Can you file the formation document online? | Yes | Yes |
| Online approval time Standard, non-expedited | 5 business days | 1 business day |
| Expedited option Paid fast-track filing | $20 | Not offered |
| Annual report Required in addition to tax | Required, $0 | Required, $300 |
| State-imposed annual tax Franchise, privilege, or LLC tax minimum | None | $100 minimum |
| State income tax On pass-through LLC income at member level | Yes | No |
| 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 | $70 | $300 |
| State sales tax General statewide rate | None | 7.0% |
Taxes in Montana and Tennessee
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.
Montana tax
No entity-level franchise tax on LLCs. State income tax applies to member-level pass-through income. Corporate rate 6.8%.
Tennessee tax
$100 minimum annual tax (net-worth basis). No state income tax. Corporate rate 6.5%.
Ongoing compliance
The recurring filings each state requires after formation.
Montana
Annual report $0, due 04/15 each year. Registered agent required in Montana.
Tennessee
Annual report $300, due on your anniversary month. Registered agent required in Tennessee.
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.
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.
Tennessee
- Check business-name availability on the Tennessee entity search.
- Appoint a registered agent with a physical Tennessee street address.
- File Articles of Organization – Limited Liability Company (Form SS-4270) for $300.
- Wait for approval. Online typically 1 business days. No paid expedite offered.
- Adopt an operating agreement (recommended, not required by Tennessee 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 $300 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 Montana and Tennessee (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 Montana or Tennessee 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
Montana Secretary of State - Business Services Division
- Website
- sosmt.gov
- Phone
- (406) 444-3665
- sosbusiness@mt.gov
- 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
Tennessee Secretary of State, Business Services Division
- Website
- sos.tn.gov/business-services
- Phone
- (615) 741-2286
- TNSOS.CORPINFO@tn.gov
- 312 Rosa L. Parks Avenue, Snodgrass Tower 6th Floor, Nashville, TN 37243
- Office
- 312 Rosa L. Parks Avenue, Snodgrass Tower, Nashville, TN 37243
- Hours
- 8:00 AM to 4:30 PM Central, Monday to Friday
Montana Department of Revenue
- Website
- mtrevenue.gov
- Phone
- (406) 444-6900
- 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
Tennessee Department of Revenue
- Website
- www.tn.gov/revenue.html
- Phone
- (615) 253-0600
- 500 Deaderick Street, Nashville, TN 37242
- Hours
- 8:00 AM to 4:30 PM Central, Monday to Friday
Frequently Asked Questions
-
Is it cheaper to form an LLC in Montana or Tennessee?
Montana is cheaper at formation ($35) than Tennessee ($300). Ongoing costs are also different: $100 vs $500 per year. Total over three years: $335 vs $1,800.
-
Can I form an LLC in Montana if I live in Tennessee?
Yes, but your Tennessee business will almost certainly need to register as a foreign LLC in Tennessee too, which means paying Tennessee's foreign registration fee and any ongoing Tennessee obligations on top of the Montana 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 Montana vs Tennessee?
Montana online: 5 business days; Tennessee online: 1 business day. Montana offers paid expedite from $20. Tennessee does not offer paid expedite.
-
Which state has lower taxes for an LLC, Montana or Tennessee?
Montana: state income tax applies to member-level pass-through income, no entity-level franchise or LLC tax. Tennessee: no state income tax, plus a $100 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. Montana and Tennessee 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 Montana or Tennessee 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 Montana and Tennessee comparisons
More Montana vs ...
Sources
- 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. - Filing fee: law.justia.com/codes/tennessee/title-48/limited-liability-companies/ch… · verified April 21, 2026
Tenn. Code Ann. §48-249-1007(a)(1): Initial filing fee = $50 × number of members, minimum $300, maximum $3,000. The default reported value is the $300 statutory minimum (applies to LLCs with 1-6 members). Justia mirror used because sos.tn.gov PDFs and some tn.gov pages returned 403/timeouts; language matches the SOS Form SS-4270 fee instructions. - Filing fee: sos-prod.tnsosgovfiles.com/s3fs-public/document/SS-4270%20LLC_0.pdf · verified April 21, 2026
Tennessee SOS Form SS-4270 (Rev. 01/25) Articles of Organization instructions confirm $50/member with $300 minimum, $3,000 maximum. If the articles prohibit the LLC from doing business in Tennessee, the flat fee is $300 regardless of member count. - Expedited filing: sos.tn.gov/businesses/faqs · verified April 21, 2026
Tennessee Secretary of State does not offer paid expedited processing for LLC Articles of Organization. Online filings through TNBear/TNCaB typically complete within 1 business day, which serves as the de facto expedited pathway. Recorded as 'offered: false'. - Annual report fee: law.justia.com/codes/tennessee/title-48/limited-liability-companies/ch… · verified April 21, 2026
Tenn. Code Ann. §48-249-1007(a)(2): Annual filing fee = $50 × number of members as of the annual report date, minimum $300, maximum $3,000. Due the first day of the fourth month after fiscal year close. Reported value is the $300 statutory minimum. - Franchise tax: www.tn.gov/revenue/taxes/franchise---excise-tax.html · verified April 21, 2026
Tennessee Department of Revenue Franchise & Excise Tax page. LLCs are subject to both taxes. Franchise tax: 0.25% of Tennessee apportioned net worth with $100 minimum (property-measure alternative repealed by Public Chapter 950, effective tax years ending on/after Jan. 1, 2024). Excise tax: 6.5% of Tennessee-sourced net earnings. Tenn. Code Ann. §67-4-2007 (excise), §67-4-2105 (franchise). - Operating agreement requirement: law.justia.com/codes/tennessee/title-48/limited-liability-companies/ch… · verified April 21, 2026
Tenn. Code Ann. §48-249-203: An operating agreement need not be in writing (except as articles or a prior operating agreement provision require). Tennessee law permits but does not require adoption of a written operating agreement. - Foreign LLC registration fee: sos-prod.tnsosgovfiles.com/s3fs-public/document/SS-4233%20COA%20LLC.pd… · verified April 21, 2026
Tennessee SOS Form SS-4233 Application for Certificate of Authority (Foreign LLC). Fee = $50 × number of members, minimum $300, maximum $3,000 (same statutory formula as domestic filing fee). Recorded $300 minimum. - Publication requirement: sos.tn.gov/businesses/faqs · verified April 21, 2026
Tennessee does not require newspaper publication of LLC formation. Confirmed by absence of such requirement in Tenn. Code Ann. §48-249-202 (Articles of organization) and SOS FAQ. - Business name search: tnbear.tn.gov/Ecommerce/NameAvailability.aspx · verified April 21, 2026
Tennessee Business Information Search (TNBear). Use before filing Articles of Organization to confirm name availability. - Sales tax rate: www.tn.gov/revenue/taxes/sales-and-use-tax.html · verified April 21, 2026
Tennessee Department of Revenue: statewide sales and use tax rate is 7% (general rate); 4% state rate on food and food ingredients. Local option adds up to 2.75%, for combined rates up to 9.75%. - Corporate income tax rate: www.tn.gov/revenue/taxes/franchise---excise-tax.html · verified April 21, 2026
Tennessee excise tax rate is 6.5% of Tennessee-sourced net earnings. Reported here as the state's functional corporate income tax rate; applies to C-corps, LLCs taxed as corporations, and (for entity-level excise only) to default-classified LLCs.