LLC Tax Rates by State: Alabama, Alaska, Arkansas, Colorado and Arizona

Introduction

As an LLC startup owner, the last thing you want is to complicate your taxation. Since the considerations and requirements of tax rates vary from state to state. In simple terms, the tax rates of each state are represented in annual percentages as corporate taxes.

It is also important to understand that tax rates do not always stay the same and are subject to changes in line with new federal and state laws. For instance, these changes usually have an impact on deductions and exclusions.

Here is an overview of the corporate and personal tax rates in each state: (some state like nevada have smartasset nevada tax calculator companies can use)

American Samoa

Personal tax: NA
Corporate tax: NA

American Samoa stands out because it has a 0% corporate tax rate to establish an LLC.

Alabama LLC Tax Rates

Personal tax: 2-5%
Corporate tax: 6.5%
An Alabama limited liability company (LLC) is a business structure that offers liability protection, a straightforward management structure, and – by default – pass-through taxation. To legally form an LLC in Alabama, you must file a Name Reservation Certificate and Certificate of Formation with the Alabama Secretary of State. Filing these two documents will cost you $228 (or $236 if filed online). Before you can file the name reservation or formation paperwork, your LLC needs a business name and a registered agent. The LLC formation process in Alabama can take a few days or a few weeks, depending on filing method and the time of year.

Alaska LLC Tax Rates

Personal tax: 6.5%
Corporate tax: 2-9.4%
An Alaska limited liability company (LLC) is a business entity with sound liability protection, straightforward management structure, and – by default – pass-through taxation. To start an LLC in Alaska, you will need to choose a business name, appoint a registered agent, and file a form called Articles of Organization with the Alaska Division of Corporations for $250. Approval usually takes just a few days but could take a few weeks depending on how and when you file

Arkansas LLC Tax Rates

Personal tax: 2.4-7%
Corporate tax: 1-6.5%
Start a Series LLC in Arkansas, by submitting the Certificate of Organization for a Series Limited Liability Company to the Arkansas Secretary of State, as well as a Protected Series Designation for each protected series you want to form. You can file these online, by mail, or in person. The Certificate of Organization for a Series LLC and a Protected Series Designation for each filing. Once filed with the Secretary of State these documents will create your Arkansas Series LLC.

Arizona LLC Tax Rates

Personal tax: 4.9%
Corporate tax: 6.95%
An Arizona LLC (limited liability company) is a business type with a versatile management structure, limited liability protection, and tax flexibility. To start an LLC in Arizona, you will need to submit a form called the Articles of Organization to the Arizona Corporations Commission and find out how much LLC filing fees are for your company. First, you must name your LLC and appoint a registered agent. Most Arizona LLCs will also need to publish their business in a local newspaper.

Colorado LLC Tax Rates

Personal tax: 4.6%
Corporate tax: 4.63%
A Colorado LLC is a business entity that shields members from personal liability for business debts. LLCs can offer pass-through taxation, and provide a flexible management structure than other corporations. To start an LLC in Colorado, you must submit Articles of Organization to the Secretary of State with filing fees. Make sure you choose a name for your LLC and select the registered agent.

Sum Up

Remember that the states that do not mandate income tax include Florida, Tennessee, Texas, Nevada, Alaska, Wyoming, and Washington. In retrospect, if you plan to start an LLC, focus on corporate taxes and opt for the state that has little to no corporate taxation in place.

Like the best states, American Samoa offers a wide range of tax benefits to start an LLC. From the initial process to form an LLC online, to availing tax perks to optimizing operations, American Samoa serves as a solid option.

American Samoa is the best state to form LLCs in 2022. Find out more information on how simple, efficient, and cost-effective it is to start an LLC in American Samoa and how it provides more added tax perks than other American states.

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