Question

Do S corporations have fees? If so, what are the fees by state.

Answer 1

S corporations deliver a bunch of benefits to small businesses. No doubt about that.

But they also burden small businesses with extra costs. And they suffer from some drawbacks.

Accordingly, while you definitely should consider the Subchapter S option if you run a profitable small business, don’t jump into this before you’ve carefully considered the following S corporation costs and drawbacks:

S Corporation State Fees and Excise Taxes

First, you will have the cost to form and maintain the legal entity you use for your S corporation.

States charge you a filing fee to setup the corporation or LLC you use, for example. And some states (especially “blue” states) charge hundreds of dollars.

Further you will always pay the state an annual filing fee and possibly annual excise taxes or franchise taxes. That usually means at least $100 a year. And sometimes—such as in the case of businesses operating in California—way, way more than that.

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