Which state to register an LLC is for the best tax advantages

[Winns]

My wife and I have a growing home business. When we form an LLC does the state we create it in matter for taxes. We live in Washington State

[OpeA1]

Please check with your resident state to find out the requirements. The link below should help you decide.

https://www.seattle.gov/office-of-economic-development/small-business/food-businesses/licensing 

[Winns]

I have heard there are benefits to registering a corporation in another state.  Is there legitimacy to that?

[AHelper]

Just to follow up with you as checking with your state is the best option. In each state there are requirements depending on the type of business you are doing as well. WA does not have a state income tax, but there are excise taxes and other registration that needs to be completed to run a business in WA.  The Secretary of State is the best source of information. Washington Limited Liability Company

Either way when you register if you are not a resident you will be registering as a foreign corp in that state.

[NateTheGrEAt]

You are already in a state which has zero state income tax. Generally, people looking to incorporate in another state are looking to avoid their state's state income tax. Since you are already in the best possible situation there is really no reason from a tax standpoint (that I can think of, anyway) that you would want to set up the business in any other state but WA. 

Keep in mind that tax is not the only consideration in deciding where to form an LLC. You might want to consult with a knowledgeable business attorney to discuss whether there might be another legal reason to consider forming it in another state.