LLC transfer tax by state: selling the LLC can cost what selling the building would

Selling the LLC instead of the building does not avoid the transfer tax in fourteen states and the District of Columbia, and California reaches the same sale through property tax. They tax a sale of the entity that owns the real estate, at least in some cases, as if the deed had changed hands. Most published lists name far fewer, because they were copied from each other before states like New Hampshire, Maine and Rhode Island were read closely.

The other half of the picture is the move in. Putting property into your own LLC is exempt in some states and fully taxed in others. In a handful it is exempt only until someone sells an interest, at which point the tax on the original deed comes back. This page sorts all 51 jurisdictions into three groups, sets out the entity-sale rules, and ends with a full table.

The transfer tax follows the property, not the LLC, so the state where the building sits decides what moving it in and selling it out will cost.

Three groups of states

Every state falls into one of three groups.

The first group has no state transfer tax at all. Wyoming, Arizona, Louisiana, Missouri, Montana and New Mexico are verified in this group, and Arizona, Louisiana, Missouri and Montana have written the prohibition into their constitutions, so it cannot change without a vote. Texas is widely reported to have a constitutional ban too, and Alaska, Idaho, Indiana, Kansas, Mississippi, North Dakota and Utah are reported to have no transfer tax. Those seven, and the Texas ban, are not yet confirmed here against an official source. Oregon has no state tax but grandfathered one county’s tax, Washington County’s.

The second group taxes the deed and nothing else. Alabama, Arkansas, Colorado, Georgia, Hawaii, Iowa, Kentucky, Massachusetts, Minnesota, Nebraska, Nevada, North Carolina, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Virginia, West Virginia and Wisconsin charge when a deed is recorded. In these states a sale of LLC interests moves no deed and triggers no transfer tax. Wisconsin’s revenue department says so directly: selling membership interests is a transfer of personal property, and “there is no conveyance of real property.”

The third group taxes the deed and the entity. Connecticut, Delaware, the District of Columbia, Florida, Illinois, Maine, Maryland, Michigan, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont and Washington can tax a transfer of interests in an entity that owns real estate in the state. California belongs here on a different track: a change in control of an LLC triggers reassessment of its California property for property tax, and some counties and cities also charge their documentary transfer tax.

Fourteen states and DC can tax the sale of the LLC, and the thresholds run from any interest at all to 90%.

How the entity-sale rules differ

The rules share a purpose and almost nothing else. Three numbers decide whether a sale of interests is taxed: the ownership threshold, the look-back period that adds separate sales together, and the kind of entity the rule reaches.

New Hampshire has no threshold at all. A transfer of any interest in a real estate holding company is taxed to the extent of the real estate’s value, under RSA 78-B:1-a, at $0.75 per $100 on each of buyer and seller. Sell 10% of an LLC that owns a $2,000,000 building and the tax is 1.5% of $200,000, or $3,000, on a sale that changed control of nothing.

New Hampshire taxes the sale of any share of a property-holding company, with no minimum percentage and no look-back.

Most of the third group draws the line at control. Connecticut, Illinois, Maine, the District of Columbia and New Jersey tax a transfer of more than 50%. New York, Rhode Island, Vermont and Washington tax 50% or more. What differs is how far back they count. Washington adds together transfers within any 36 months, New York and Rhode Island count three years, Maine and the District of Columbia count 12 months, and Connecticut and New Jersey presume that transfers within six months of each other are one transaction. Washington also requires a controlling-interest return within five days of the transfer.

A few states set the bar far higher. Pennsylvania taxes a “real estate company” only when 90% or more of its ownership changes within three years. Maryland reaches a transfer of more than 80% of an entity whose real estate is at least 80% of its assets and worth at least $1,000,000, and only for transfers completed within 12 months as part of a plan. Delaware’s rule is a safe harbor rather than a cliff: no tax applies while the prior owners keep 80% or more, and below that the Division of Revenue decides whether the transfer is really a sale of real estate. Michigan reaches a controlling interest only in an entity whose real estate is 90% or more of its assets, and its statute does not define control by a percentage.

Two states narrow the rule by property type or by sequence. New Jersey’s controlling-interest tax reaches only Class 4A commercial property over $1,000,000, so selling control of an LLC that holds apartments falls outside it. Since July 10, 2025 the New Jersey rate runs from 1% to 3.5%, paid by the seller. Florida has no percentage threshold at all, because its rule is about sequence, which is the next section.

The same sale of 60% of a property LLC is taxed in Washington and New York and untaxed in Pennsylvania and Maryland.

The dollars can be large. Washington’s real estate excise tax is graduated, from 1.1% up to 3% on the portion above $3,025,000, before local tax. On a $10,000,000 property, a controlling-interest transfer owes about $269,075 in state tax alone. The brackets rise on January 1, 2027, to $551,000, $1,551,000 and $3,051,000.

The exemption that comes back

Here is the seam that catches owners who did everything right on day one. Several states exempt the move of property into your own LLC, then tax it after all if ownership of the LLC changes within a set period. The exemption and the entity-sale rule are two halves of one trap.

Florida is the sharpest example. Its documentary stamp tax is 70 cents per $100 of consideration, and consideration expressly includes any mortgage on the property, whether or not the LLC assumes the debt. Deed a $1,000,000 rental with a $600,000 mortgage into your own LLC and the tax is $4,200. Deed in an unencumbered property and you pay little or nothing, but you have created what Florida calls a conduit entity: if you sell your interest in that LLC for consideration within three years, the sale is taxed as if the deed had been sold (Fla. Stat. § 201.02(1)(b)).

In Florida, deeding a mortgaged property into your own LLC is taxed on the mortgage balance, and an untaxed deed starts a three-year clock.

The other clawbacks run on different clocks. Minnesota taxes a deed into your own LLC at a $1.65 minimum, but if an original owner transfers an interest within six months so the deed no longer qualifies, the full 0.33% applies to the original deed. Oklahoma exempts a transfer into an LLC owned by the transferor and close relatives, and the tax becomes due immediately if an interest leaves that group within one year. Washington’s family-entity exemption is recaptured if the property or an interest leaves the family within three years. California has no clock at all: contributors become “original co-owners,” and once they cumulatively transfer more than 50% of the LLC, in one sale or across decades, the property they contributed is reassessed.

The structuring consequence: the day you put property into an LLC is the day you set the cost of selling the LLC. An exit plan written later is written against a clock that is already running.

Where moving property into your own LLC is fully taxed

The exemption most owners assume is not universal. Pennsylvania’s regulation makes transfers between an entity and its owners “fully taxable, unless otherwise excluded,” and none of the listed exclusions covers the ordinary move into a new LLC (61 Pa. Code § 91.154), so the 1% state tax applies plus local tax. The District of Columbia has no same-ownership exemption in either of its two deed taxes: deeding property into your wholly owned LLC owes 2.2% combined below $400,000 and 2.9% at or above it, measured on fair market value. New Jersey’s revenue division states that a conveyance between related entities is not exempt if the consideration is $100 or more. Alabama taxes the deed on value with no exemption for a commonly owned entity.

Pennsylvania and the District of Columbia tax moving your own property into your own LLC as if you had sold it.

Other states exempt the move, but only for some owners. Wisconsin’s exemption requires every member to be related, so two unrelated partners deeding a rental into their 50/50 LLC pay the 0.3% fee. Nebraska exempts a single-owner LLC and family LLCs, and taxes unrelated co-owners. Iowa’s exemption covers only family entities organized under Iowa law. Virginia exempts the move if the grantors receive at least 50% of the LLC’s profits. Maryland’s main exemption requires that all of an enterprise’s real estate go into a single LLC, which cuts against the usual one-property-per-LLC structure.

At the other end, Kentucky and South Dakota exempt any transfer between an LLC and its members, in either direction, with no ownership test (KRS 142.050(7)(o); SDCL § 43-4-22(19)).

The full table

Rates are state-level unless noted, and most states add local or county tax on top. Rows marked “not confirmed” record what is widely reported but has not been checked against an official source here; confirm with the named agency before relying on them.

State	Tax on the deed	Selling LLC interests	Moving property into your own LLC
Alabama	0.1% of value	Not taxed	Taxed; no exemption
Alaska	None reported; not confirmed, confirm with the Department of Revenue	None reported	Not applicable
Arizona	None; barred by the constitution	Not taxed	Not applicable
Arkansas	0.33%	Not taxed	Exempt when incident to organizing or capitalizing the LLC
California	No state tax; county option of 0.11%, much higher in some cities	Change in control triggers property tax reassessment; local transfer tax in some counties and cities	Exempt if proportional, but a later cumulative transfer over 50% triggers reassessment
Colorado	0.01% documentary fee	Not taxed	No fee without consideration over $500; a mortgage counts as consideration
Connecticut	0.75% to 2.25% residential, 1.25% nonresidential, plus 0.25% municipal	Over 50%, at 1.11%; transfers within six months presumed linked	Exempt as a mere change of form
Delaware	4% total, including up to 1.5% local	Taxed when prior owners keep less than 80%, subject to Division of Revenue rules	Exempt if ownership is proportional
District of Columbia	2.2% combined, 2.9% at or above $400,000	Over 50% within 12 months, at 2.9%	Taxed on fair market value; no exemption
Florida	0.70%	Interest sale within three years of an untaxed contribution	Taxed on any mortgage balance; untaxed deed starts a three-year clock
Georgia	0.1%	Not taxed	Exempt if the owners hold a majority of the LLC
Hawaii	0.10% to 1.00% by value; up to 1.25% for some residential sales	Not taxed	No exemption; a $100-or-less consideration rule may apply, not confirmed
Idaho	None reported; not confirmed, confirm with the State Tax Commission	None reported	Not applicable
Illinois	0.1% state plus 0.05% county; Chicago 1.05%	Over 50% of a real estate entity	No form-change exemption; relies on the under-$100 consideration rule
Indiana	None reported; not confirmed, confirm with the Department of Revenue	None reported	Not applicable
Iowa	0.16%	Not taxed	Exempt only for family LLCs organized in Iowa
Kansas	None reported; not confirmed, confirm with the Department of Revenue	None reported	Not applicable
Kentucky	0.1%	Not taxed	Exempt, any transfer between an LLC and its members
Louisiana	None; barred by the constitution (Orleans Parish keeps an older local tax)	Not taxed	Not applicable
Maine	0.44%; 1.2% on value above $1,000,000 since November 1, 2025	Over 50% within 12 months	Exempt from entities if proportional; individual grantor unclear
Maryland	0.5% state plus county recordation and transfer taxes	Over 80% of a real estate entity worth $1,000,000 or more, within 12 months under a plan	Narrow; no general exemption
Massachusetts	About 0.456% including surtax	Not taxed	No express exemption; nominal consideration likely owes nothing, not confirmed
Michigan	0.75% state plus county	Controlling interest in an entity that is 90% or more real estate	Exempt if same owners in same proportions
Minnesota	0.33%	Not taxed	$1.65 minimum; full tax if an interest moves within six months
Mississippi	None reported; not confirmed, confirm with the Department of Revenue	None reported	Not applicable
Missouri	None; barred by the constitution	Not taxed	Not applicable
Montana	None; barred by the constitution	Not taxed	Not applicable
Nebraska	0.332% since July 18, 2026	Not taxed	Exempt for single-owner and family LLCs only
Nevada	0.39%, or 0.51% in Clark County	Not taxed	Exempt if 100% owned or a mere change in form
New Hampshire	1.5% combined, half from each side	Any interest in a real estate holding company, proportionally	Exempt if no consideration and same percentages
New Jersey	Graduated fee; 1% to 3.5% above $1,000,000 on many classes, seller-paid	Over 50% of Class 4A commercial property over $1,000,000	Not exempt if consideration is $100 or more
New Mexico	None	Not taxed	Not applicable
New York	0.4%, more in New York City and on residential over $1,000,000	50% or more, aggregated over three years	Exempt to the extent beneficial ownership is unchanged
North Carolina	0.2%	Not taxed	No express exemption; a statutory conversion is the clean path
North Dakota	None reported; not confirmed, confirm with the Office of State Tax Commissioner	None reported	Not applicable
Ohio	Up to 0.4% combined state and county	Not taxed	Exempt when no money or convertible consideration is paid
Oklahoma	0.15%	Not taxed	Exempt for the transferor and close relatives; due if an interest leaves within one year
Oregon	None statewide; Washington County’s older tax survives	Not taxed at the state level	Not applicable at the state level
Pennsylvania	1% state plus local, often about 1% more	90% or more of a real estate company within three years	Fully taxable
Rhode Island	0.75% since October 1, 2025, more on high-value residential	50% or more within three years; five days’ advance notice	No listed exemption; applies only where consideration exceeds $100
South Carolina	0.37%	Not taxed	Exempt in exchange for an LLC interest only
South Dakota	0.1%	Not taxed	Exempt, any transfer between an LLC and its members
Tennessee	0.37%, paid by the buyer	Not taxed	No exemption; a quitclaim is taxed only on actual consideration
Texas	None reported; constitutional ban not confirmed here, confirm with the Comptroller	None reported	Not applicable
Utah	None reported; not confirmed, confirm with the State Tax Commission	None reported	Not applicable
Vermont	1.25% general, 3.4% on second homes, plus 0.22% surcharge	50% or more	Exempt as a mere change of form, or at formation with no recognized gain
Virginia	0.25% recordation plus 0.1% grantor tax, plus local	Not taxed	Exempt if the grantors receive at least 50% of profits
Washington	1.1% to 3% graduated, plus local	50% or more within 36 months; return due in five days	Exempt if pro rata; family exemption recaptured within three years
West Virginia	0.22% state plus 0.11% to 0.33% county	Not taxed	Exempt only for a no-consideration deed to an LLC the grantor wholly owns
Wisconsin	0.3%	Not taxed	Exempt only if all members are related
Wyoming	None	Not taxed	Not applicable

The bottom line

Fourteen states and the District of Columbia can tax a sale of LLC interests as if the building had been sold, and California reassesses on a change in control.

The thresholds run from any interest in New Hampshire to 90% in Pennsylvania, and the look-back periods from six months to three years.

Moving property into your own LLC is fully taxed in Pennsylvania and the District of Columbia, limited to related owners in Wisconsin and Nebraska, and exempt outright in Kentucky and South Dakota.

Florida, Minnesota, Oklahoma, Washington and California can take back the exemption on the way in when ownership of the LLC changes later.

The formation state changes none of this, because the tax belongs to the state where the property sits.

What this page does not cover

Local transfer taxes are noted but not itemized, and they can exceed the state tax, especially in Chicago, New York City, Philadelphia and Pittsburgh. Each state’s full structure and cost picture is on its state page. Why your formation state does not change any of this is on the best state for your LLC. Federal tax on moving property into an LLC and on selling an interest is covered across the tax section.

Last verified October 2026.