Paying state taxes if incorporating in Delaware
When running a small single-owned internet business, states such as Delaware or Wyoming are great options for their business friendly regulations. Typically, smaller LLC's tend to register in Wyoming more, as they have a cheaper Annual Report, along with less expensive filing charges for business maintenance such as Amendments and such.
LLC's are generally not taxed as an entity, rather let the owners pass the income straight through onto their personal tax return. In other words, regardless of what state your company is registered in, once it makes profit distributions to you as a member, you will list this income on your personal tax return and pay your usual taxes on that income.
The real question is this: would your company be required to do foreign qualification in Illinois, given the fact you as a manager reside there. This question can be answered by a business attorney admitted in Illinois who can interpret the statutes of Illinois law dealing with foreign qualification.