Tennessee vs Delaware LLC — Which State?
If you operate in Tennessee, forming in Delaware means paying fees in both states with minimal benefit. For formation, see how to form a Tennessee LLC.
Cost Comparison (Operating in Tennessee)
| Tennessee LLC | Delaware LLC (operating in TN) | |
|---|---|---|
| Formation | $300 | $90 (DE) + $300/member (TN foreign) |
| Annual | $300 report + $300 F&E = $600 | $300 (DE) + $300 report (TN) + $300 F&E (TN) = $900+ |
| Registered agents | 1 | 2 (both states) |
Delaware adds cost without eliminating Tennessee's F&E tax. If you operate in Tennessee, you owe the F&E tax regardless of where your LLC is formed.
FAQ
Does Delaware avoid Tennessee's F&E?
No. If you do business in Tennessee, you owe F&E tax regardless of formation state. Delaware adds $300/year in Delaware annual tax plus a second registered agent — for no Tennessee tax benefit.