Which LLC state has the lowest long-term costs for Dropshipper?

alexdann

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I'm planning to form a US LLC, but I'm not sure which state is the best choice in terms of overall costs, i'm so confused with this (I'm running a dropshipping business and I don't live in the US)

The things I care about are:

  • Annual Report fees
  • Taxes (state tax, sales tax, etc. — the less, the better)
  • Filing fee (preferably around $100 or less)
Skip the costs like getting an EIN, ITIN, or registered agent fees.

From what I've seen, most dropshippers register their LLC in Wyoming. Other popular states are Montana, New Mexico, Colorado, Delaware, Missouri, etc. I asked AI about this and got the answer shown in the image.
1784094012046.png
I'm not sure if it's correct. If it is, I don't really understand why Wyoming is so popular, because it seems to cost quite a bit more than several other states.

New Mexico, Montana, and Missouri all seem pretty good to me, but I'm not sure if it's as easy to use an LLC from those states to register for US banking and financial services (like Wise, Stripe, etc.).

Also, New Mexico seems good, but I've heard Facebook charges 10% tax there, while other states don't.

I'd really love to hear your thoughts, and if possible, I'd really appreciate it if you could explain why as well so I can understand it better.

Thanks!
 
You can try New Mexico or Wyoming. Both states has no sales tax problems and 0 state income tax.
 
Sales tax is generally based on where the buyer receives the product, not the state where the LLC was formed.

Don't compare these states solely by filing fees or estimated tax obligations. Compare the actual legal protections and compliance requirements. Wyoming and Delaware are more popular because their LLC laws are stronger and more predictable, while Colorado and Florida tend to be less popular because they offer weaker protections in some areas.

If the extra $5 per month for Wyoming is enough to make or break your business, you're probably not ready to form an LLC yet.
 
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