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corp costUpdated 2026-03-31

Illinois Corporation Costs

Item Details Amount
Articles of Incorporation filing fee $150.00 Yes
Registered agent service (third-party annual) $50–$300 No*
Name search (free online) $0 No
Attorney or formation service review $100–$500 No
First annual report (due before anniversary month) $75.00 Yes

*You may serve as your own registered agent at no cost if you maintain a physical office in Illinois.

Annual Report Fees and Compliance Costs

Every Illinois corporation must file an annual report each year before the first day of its anniversary month (the month in which it was incorporated). The annual report fee is $75.00 under 805 ILCS 180/50-1 and 805 ILCS 180/50-5. You file the annual report online at https://www.ilsos.gov/departments/business-services/annual-reports/llc-instructions.html or by mail. The report must include your corporation's legal name and file number, jurisdiction of organization, principal place of business address, names and business addresses of directors and officers, and registered agent and registered office information.

Late filing penalties escalate quickly:

  • $100 penalty if you file more than 60 days after the due date.
  • Administrative dissolution or revocation if you fail to file within 120 days from the original due date.

If your corporation is administratively dissolved, you must pay a $200 reinstatement fee plus all delinquent annual report fees, penalties, and any additional amounts required to restore good standing. This makes timely filing critical—missing the deadline by even one day starts the clock toward a $100 penalty and potential loss of your corporate status.

Item Cost
Annual Report Fee $75.00
Late Penalty (if filed 60+ days after due date) $100.00
Reinstatement Fee (after administrative dissolution) $200.00
Delinquent Annual Report Fees (owed upon reinstatement) $75.00 per year

Annual compliance cost: $75 (on time) or $175+ (late filing and reinstatement).

State Income Tax Obligations

Illinois corporations face a combined state-level tax burden significantly higher than pass-through entities. Your corporation pays:

  • 7% Illinois corporate income tax on Illinois-taxable income.
  • 2.5% replacement tax on Illinois-taxable income.
  • Combined effective state tax rate: 9.5% before any federal taxes.

These rates apply under 35 ILCS 5/ (Illinois Income Tax Act). The 7% corporate income tax is the primary state-level tax on C corporations; the 2.5% replacement tax is an additional obligation that applies to most corporations. You must register for Illinois corporate income tax with the Illinois Department of Revenue at https://tax.illinois.gov/. Estimated tax payments are due quarterly on April 15, June 15, September 15, and January 15.

S corporations recognized at the state level receive different treatment. Illinois S corporations generally do not pay the 7% corporate income tax but do owe 1.5% replacement tax on Illinois-taxable income. If you elect S corporation status for federal tax purposes, you must also make that election with the Illinois Department of Revenue to avoid the 7% corporate tax.

Tax Type Rate Applies To
Corporate Income Tax 7% C corporations on Illinois-taxable income
Replacement Tax (C Corp) 2.5% C corporations on Illinois-taxable income
Replacement Tax (S Corp) 1.5% S corporations on Illinois-taxable income
Combined C Corp Rate 9.5% C corporations (7% + 2.5%)

Tax cost varies by net income, but a corporation with $100,000 in Illinois-taxable income owes approximately $9,500 in combined state corporate and replacement taxes annually. The Department of Revenue provides corporate tax information at https://tax.illinois.gov/research/taxinformation/income/corporate.html.

Franchise Tax and Elimination of Prior Obligations

Illinois no longer requires franchise tax payments for amounts that would have been due on or after January 1, 2025. The state phased out its corporate franchise tax, and old franchise-tax sections are scheduled for repeal. Domestic and foreign corporations no longer file separate franchise tax returns with the Secretary of State.

However, this does not eliminate your tax obligations. You still must:

  • File annual reports with the Secretary of State ($75 fee).
  • Pay corporate income tax and replacement tax to the Illinois Department of Revenue.
  • Comply with all other state and local tax requirements.

The elimination of franchise tax reduces your compliance burden but does not affect your income tax liability. Check with the Illinois Department of Revenue at (217) 782-3336 or https://tax.illinois.gov/ for current corporate tax obligations.

Obligation Cost Frequency
Annual Report (Secretary of State) $75.00 Annual
Corporate Income Tax (7%) Variable Annual
Replacement Tax (2.5% for C corps; 1.5% for S corps) Variable Annual

Sales Tax Registration and Ongoing Sales Tax Liability

If your corporation will make taxable sales in Illinois, you must register for sales tax with the Illinois Department of Revenue. There is no registration fee for standard Illinois business tax registration. You register through MyTax Illinois or Form REG-1 at https://tax.illinois.gov/questionsandanswers/286.

Illinois imposes a 6.25% state general merchandise sales tax rate before local taxes and special district add-ons. Many counties and municipalities add local sales taxes, bringing the total rate to 7% or higher in some areas. You collect sales tax from customers and remit it to the Department of Revenue, typically monthly or quarterly depending on your sales volume.

Sales tax registration is separate from corporate income tax registration. Both are required if you make taxable sales. The Department of Revenue provides a retailers' overview at https://tax.illinois.gov/research/publications/pubs/retailers-overview-of-sales-and-use-tax/registering-your-business.html.

Item Details
State Sales Tax Rate 6.25% (before local add-ons)
Registration Fee No state registration fee
Registration Method MyTax Illinois or Form REG-1
Registration Requirement Before making taxable sales or hiring employees
Tax Authority Illinois Department of Revenue

Sales tax cost: $0 registration fee, but ongoing remittance liability of 6.25%+ on taxable sales.

Registered Agent and Registered Office Requirements

Every Illinois corporation must maintain a registered agent and registered office in Illinois. Your registered agent must be:

  • An individual who resides in Illinois, or
  • An entity authorized to transact business in Illinois.

Your registered office must be located in Illinois and use a street address (not a P.O. Box alone). The registered office address must match the business office address of your registered agent.

You may serve as your own registered agent at no cost if you maintain an Illinois office. If you use a third-party registered agent service, expect to pay $50–$300 annually depending on the provider. If you need to change your registered agent or registered office after formation, you file a Statement of Change of Registered Agent and/or Registered Office for a $25 fee. This change is processed by the Secretary of State and takes effect upon filing.

Item Cost
Self-service registered agent (no cost if you maintain Illinois office) $0
Third-party registered agent service (annual) $50–$300
Statement of Change of Registered Agent and/or Registered Office $25.00

Registered agent cost: $0 (self-service) to $300 (third-party service) annually.

Comparison: Corporation vs. LLC Formation and Ongoing Costs

Illinois entrepreneurs often choose between a corporation and an LLC. Here's how the costs compare:

Cost Category Corporation LLC
Formation Filing Fee $150 $150
Annual Report Fee $75 $75
Registered Agent (third-party) $50–$300/year $50–$300/year
State Income Tax Rate (C entity) 7% + 2.5% replacement = 9.5% 4.95% individual + 1.5% replacement (pass-through)
State Income Tax Rate (S entity) 1.5% replacement only 4.95% individual + 1.5% replacement (pass-through)
Sales Tax Registration $0 $0
Late Annual Report Penalty $100 (after 60 days) $100 (after 60 days)
Reinstatement Fee $200 $200

Key difference: A C corporation pays 9.5% combined state tax on corporate income, while an LLC taxed as a partnership or S corporation passes income to owners who pay 4.95% individual income tax plus 1.5% replacement tax. For many small businesses, an LLC offers lower state tax burden. However, corporations may offer liability protection and other advantages depending on your situation. Consult a tax professional to determine the best structure for your business.

First-Year and Ongoing Annual Cost Estimates

Forming an Illinois corporation requires filing Articles of Incorporation with the Secretary of State and paying a $150 filing fee under 805 ILCS 5/2.10. You must also appoint a registered agent and registered office in Illinois. If you use a third-party registered agent service, expect to pay $100–$300 annually. Your first year includes the formation fee, initial registered agent costs, and your first annual report fee of $75 due before your anniversary month. Sales tax registration with the Illinois Department of Revenue carries no fee.

First-Year Costs (Formation + Initial Compliance):

  • Articles of Incorporation filing: $150
  • Registered agent service (third-party): $100–$300
  • Annual report (due before anniversary month): $75
  • Sales tax registration: $0
  • Total first-year estimate: $325–$525

Ongoing Annual Costs (Year 2+):

  • Annual report: $75
  • Registered agent service (third-party): $100–$300
  • Corporate income tax and replacement tax: varies by income (9.5% combined for C corps; 1.5% replacement for S corps)
  • Sales tax remittance: 6.25%+ on taxable sales (collected from customers, not a direct cost)
  • Total ongoing annual estimate: $175–$375 (plus income and sales taxes)

If you miss the annual report deadline:

  • Add $100 late penalty (if filed 60–120 days late).
  • Add $200 reinstatement fee (if administratively dissolved).
  • Potential loss of corporate status and liability protection.
Cost Category First Year Ongoing Annual
Articles of Incorporation filing $150 —
Annual report fee $75 $75
Registered agent service (third-party estimate) $100–$300 $100–$300
Sales tax registration $0 $0
Subtotal (direct costs) $325–$525 $175–$375

Conclusion

Forming an Illinois corporation costs $150 in filing fees, with total first-year costs of $325–$525 when you include registered agent service and the first annual report. Ongoing annual costs are $175–$375 plus state income taxes and sales tax obligations. The critical compliance deadline is your corporation's anniversary month each year—missing the annual report deadline triggers a $100 penalty after 60 days and potential administrative dissolution after 120 days.

Illinois corporations face a 9.5% combined state corporate income tax and replacement tax (or 1.5% replacement tax for S corporations), significantly higher than the 4.95% individual income tax rate that LLC owners pay. Before forming a corporation, compare the tax burden and liability protection benefits against an LLC structure with your accountant or attorney.

File your Articles of Incorporation online at https://apps.ilsos.gov/llcarticles/index.jsp, register for sales tax at https://tax.illinois.gov/, and register for corporate income tax with the Illinois Department of Revenue. Contact the Secretary of State at (217) 524-8008 or visit https://www.ilsos.gov/ with questions about formation or compliance.

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