Tennessee vs. Wyoming LLC Formation — 2026 Cost, Tax & Requirements Comparison

1. Compare formation costs: TN $300 minimum vs. WY $100 Wyoming's formation fee ($100) is dramatically lower than Tennessee's minimum formation fee ($300 for a single-member LLC, tiered at $50/member with a $3,000 cap). A 5-member Tennessee LLC pays $250 — still below the $300 minimum — while a 7-member Tennessee LLC pays $350. For virtually all single-member LLC formations, Wyoming saves $200 in formation costs alone.
2. Compare annual obligations: TN $400+ vs. WY $60/yr minimum Tennessee's combined annual cost for a single-member LLC is at least $400/yr: $300 Annual Report + $100 minimum franchise tax = $400/yr, plus the 6.5% excise tax on any net income. Wyoming's Annual Report is $60/yr minimum. Over 3 years: Tennessee ~$1,500 ($300 + 3×$400 minimum, excluding excise tax) vs. Wyoming ~$280 ($100 + 3×$60). Wyoming costs approximately one-fifth of Tennessee on an ongoing basis, ignoring the excise tax impact.
3. Understand Tennessee's franchise and excise tax — a critical distinction Tennessee is one of the few states that imposes both a franchise tax and an excise tax on LLCs. The franchise tax (0.25% of net worth or property, $100 minimum) is owed even with no income. The excise tax (6.5% of net income) applies to profitable LLCs. Both are entity-level taxes separate from personal income tax. Wyoming has neither a franchise tax nor an entity-level income tax. For Tennessee-based businesses, the F&E tax is unavoidable — but businesses operating outside Tennessee that form in Wyoming owe no Tennessee F&E tax unless they have TN nexus.
4. Evaluate Tennessee's 'no personal income tax' angle Tennessee eliminated the Hall Income Tax in 2021, leaving no personal income tax on wages, salaries, or most LLC pass-through income for Tennessee residents. Wyoming also has no personal income tax. Both states share this advantage. However, Tennessee's franchise and excise tax (F&E) applies at the entity level — so Tennessee LLCs with net income pay 6.5% excise tax, and all Tennessee LLCs pay a minimum $100 franchise tax. Wyoming's 'no income tax' advantage extends to both personal and entity levels — no F&E equivalent exists in Wyoming.
5. Compare asset protection: WY exclusive charging-order vs. TN case-law-dependent Wyoming's charging-order statute (Wyo. Stat. § 17-29-503) expressly declares a charging order the exclusive creditor remedy against an LLC membership interest — a creditor cannot foreclose on the interest, force a liquidation, or obtain management rights. Tennessee's charging-order protection (T.C.A. § 48-249-504) provides some protections but is less robust and less tested than Wyoming's. For asset-protection purposes, Wyoming is generally considered one of the top two or three states in the U.S.; Tennessee is not in that tier.
6. Evaluate anonymity and privacy: both permit anonymous formation Both Wyoming and Tennessee permit LLC formation without member names on the public filing. Wyoming's Articles of Organization require only the LLC name, RA information, and organizer signature. Tennessee's Articles of Organization similarly do not require member names. Wyoming additionally does not require member disclosure in annual filings. For pure anonymity, Wyoming and Tennessee are comparable at formation, but Wyoming's lower annual reporting burden makes ongoing privacy maintenance simpler.
7. Factor in foreign qualification if operating outside the formation state Most Wyoming formation-only LLCs operate primarily in another state — including Tennessee. If you form in Wyoming but operate in Tennessee, Tennessee will require foreign qualification and Tennessee's franchise and excise taxes will still apply (Tennessee's F&E tax follows nexus, not formation state). Forming in Wyoming only avoids TN taxes if the LLC has no Tennessee nexus. Conversely, a Tennessee LLC formed by Wyoming-based operators would need Wyoming foreign qualification.
8. Choose your state and file Tennessee: file at tnbear.tn.gov (Articles of Organization, $300 minimum). Register with TNTAP for franchise and excise tax. Wyoming: file at wyobiz.wyo.gov (Articles of Organization, $100). After formation, obtain an EIN at irs.gov/ein, draft an operating agreement, and open a business bank account. Tennessee makes sense for businesses actually operating in Tennessee — forming in Wyoming does not avoid TN F&E tax if TN nexus exists. Wyoming wins on cost, asset protection, and entity-level tax savings for non-TN operators.

Tennessee LLC Act, T.C.A. § 48-249-101 et seq.; Tennessee Annual Report: T.C.A. § 48-249-907; Tennessee Franchise & Excise Tax: T.C.A. § 67-4-2101 et seq. (excise) and T.C.A. § 67-4-2001 et seq. (franchise); Wyoming Limited Liability Company Act, Wyo. Stat. § 17-29-101 et seq.; Wyoming charging-order: Wyo. Stat. § 17-29-503; IRS guidance on single-member LLC disregarded entity treatment.

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Tennessee vs. Wyoming LLC — common questions