Texas LLC Formation Cost 2026

The Texas LLC story — the $300 entry fee buys access to one of the four biggest US economies

$300 to form, $0 to maintain — but read the franchise-tax fine print

Texas charges $300 to file a Certificate of Formation (Tex. Bus. Orgs. Code §3.005) — among the highest filing fees in the US, comparable only to Massachusetts and Tennessee. After that, the maintenance cost looks unusually low: no annual report fee, no franchise tax minimum. The catch is the Texas franchise tax (also called the margin tax). Every Texas LLC must file an annual No Tax Due Report or Public Information Report by May 15. If your annual revenue is below the no-tax-due threshold ($2.47 million in 2024–25), you owe $0 and just file the report. Above that, you owe 0.375% (retail/wholesale) or 0.75% (other) on taxable margin. The vast majority of small LLCs file the no-tax-due version and owe zero — but they still must file. Missing the May 15 deadline triggers a $50 late penalty and forfeiture of the LLC's right to do business in Texas after 45 days.

Public Information Report — your members are on the record

The Public Information Report (PIR) Texas requires every May 15 lists the LLC's members, managers, and officers, along with their mailing addresses. This information is publicly searchable through the Comptroller's database. Texas scores 5/10 on privacy — better than California or New York (which require Statements of Information at formation) but worse than Wyoming, Nevada, or New Mexico. The same Wyoming-as-sole-member workaround works for Texas: a privacy-focused founder can have a Wyoming holding LLC be the sole member of the Texas operating LLC, keeping the natural person off the PIR.

No state income tax — but Texas Comptroller has other ways to collect

Texas has zero state personal income tax (Texas Constitution Art. VIII, §24 effectively bans one). A Texas-resident LLC owner with pass-through taxation pays only federal taxes on profits. This is the headline that draws relocations from California, New York, and New Jersey. The Texas tax base relies instead on: (a) the franchise tax above $2.47M, (b) a 6.25% state sales tax (locally up to 8.25%), and (c) substantial property taxes (Texas property tax is among the highest in the US — typical effective rate 1.6–2.2%, with no state-level homestead income exemption). For high-income service founders, the trade is overwhelmingly favorable; for asset-heavy owners (real estate, equipment) the property tax can erode some of the income-tax savings.

Series LLC support — Texas codified the modern statute in 2009

Texas authorizes Series LLCs under Tex. Bus. Orgs. Code §101.601–§101.621. Each series can have separate members, managers, assets, and liability exposure, with internal segregation of obligations. The statute is robust enough that Texas is one of the favored jurisdictions for multi-property real estate portfolios — each property a series rather than a separate entity. The trade-off: not every state recognizes the series structure for the liability-segregation purposes Texas intends. A Texas series LLC owning a New York property may face uncertain treatment in New York court. For purely Texas-situs property portfolios this is irrelevant; for multi-state real estate the cleaner structure is often separately formed LLCs in each state.

Texas Business Court (2024) raises the bar for sophisticated disputes

Effective September 2024, Texas operates a specialized Business Court (Tex. Gov't Code §25A) for high-value commercial disputes — modeled loosely on Delaware's Court of Chancery, with $5M+ jurisdiction thresholds (or any amount in fiduciary / governance disputes for entities with $10M+ assets). The Business Court is not yet at Chancery's depth of case law, but for venture-backed Texas startups it removes one of the historical arguments for Delaware incorporation. For most small LLCs this is irrelevant — Business Court's $5M threshold puts it out of reach — but for high-growth Texas tech companies it is a meaningful 2024–2026 development to factor into the Delaware-vs-home-state decision.

Real total annual cost for a Texas LLC

Honest budget for a Texas-resident-owned operating LLC: $50–$200 a year after the first year — registered agent (Texas requires one; can be the founder if Texas resident with physical Texas address, free), no annual report fee, no franchise tax under $2.47M revenue. First year is $300 filing + $0–$200 RA = $300–$500. This is competitive with most middle-tier states, and the access to Texas's 9/10 banking ecosystem and major US economy is included at no extra cost. For non-resident-owned LLCs (RA must be paid at $100–$200/year), the math shifts slightly worse — but still cheaper long-term than Delaware's $450–$650 per year.

Who Texas fits — and who is over-paying for it

Texas fits cleanly for: Texas-resident founders (no foreign-qualification, no income tax, no annual fee under the threshold); operating businesses with Texas customers or physical presence (Houston energy, Austin tech, Dallas finance, San Antonio biotech); multi-property real estate using the Series LLC structure; e-commerce LLCs for owners willing to relocate (no state income tax, no sales tax on out-of-state sales pre-Wayfair); and tech startups not yet at Series A.

It fits poorly for: non-resident solo founders primarily seeking privacy (Wyoming and New Mexico are structurally cheaper and more private); asset-only holding LLCs with no Texas connection ($300 filing is paying for nothing you use); and founders with revenue near or above $2.47M who have not modeled the franchise tax (0.375–0.75% on margin can become material — at $5M revenue and 30% margin, the tax is ~$5,600/year vs $62 in Wyoming).

Compare cost across all 50 states in the LLC formation matrix, or model the franchise-tax impact with the LLC tax calculator. Data verified against Texas Secretary of State and Comptroller (last reviewed 2026-05-15).