Form an LLC in Texas.
Filing an LLC in Texas costs $300 for the Articles of Organization. With a registered agent service ($99/yr) and the Year-1 annual obligations, a typical first-year cost lands near $399. Ongoing cost runs about $99/year.
Run the numbers for Texas.
Estimates only. Verify with the Texas Secretary of State before paying. Not legal advice.
Texas LLC fees, line by line
| Component | Cost / Rule | Note |
|---|---|---|
| Articles of Organization filing fee | $300 | One-time charge to register the LLC with the state. |
| Annual report | None | This state does not require an LLC annual report. |
| Franchise / business tax | $0 | This state has no minimum franchise tax for LLCs. |
| Registered agent | Required | Every state requires a registered agent. You can be your own RA in your home state at no cost; commercial services run $35–$300/yr. |
| Expedited filing | Available | Typical add-on $50–$100 for 1–3 day turnaround. |
No annual report, no franchise tax
Texas is one of a small group of states that doesn't require an LLC annual report and doesn't impose a minimum franchise tax. Your only recurring cost is the registered agent — which can be $0 if you serve as your own. This makes Texas one of the cheapest states for a long-lived LLC, particularly for dormant holding entities.
Should you form in this state if you don't live here?
For most operators, the answer is no. An LLC pays state income tax wherever it operates, not where it's formed. Forming in Texas while doing business in another state means paying both states' fees plus a foreign-qualification fee in your operating state. Real reasons to form in a non-home state: pure IP holdcos, real estate holdcos in the property state, asset-protection structures, or non-US residents with no US nexus. Full breakdown of when forming out-of-state pays off →
Forming an LLC in Texas
Texas's Secretary of State administers LLC formations through the Business Filings Division. Articles of Organization are filed exclusively online via the state's digital portal or by mail. Online filings typically process within 1-2 business days; mailed submissions take 7-10 business days. The state charges $300 for standard online filing and offers a $25 rush option for same-day processing. Texas does not require newspaper publication of LLC formation, which keeps costs down compared to several neighboring states. Before filing, verify the LLC name through the Texas Secretary of State's online business search to ensure it is distinguishable from existing entities and ends with "LLC," "L.L.C.," or "Limited Liability Company."
Texas requires all LLCs to maintain a registered agent (called a "Registered Agent" in Texas) with a physical street address in the state. The agent can be an owner, manager, employee, or professional service. Texas's registered agent rules are straightforward: the agent must maintain an office address and be available during standard business hours to receive legal service of process on behalf of the LLC. Texas does not impose unusual restrictions on agent qualifications or office hour requirements beyond physical address maintenance.
Texas LLCs are not required to file annual reports with the state, which is a significant compliance advantage. Once the Articles of Organization are filed, the LLC remains in good standing without annual state filings. However, Texas imposes a Franchise Tax on most business entities, including LLCs, calculated on taxable margin. An LLC whose annualized total revenue stays at or below the no-tax-due threshold of $2.47 million owes nothing; there is no minimum franchise tax. Above the threshold, the rate is 0.375% of taxable margin for retail and wholesale businesses and 0.75% for all other businesses. Knowing your revenue projections before formation tells you whether the franchise tax will ever touch you at all.
A common pitfall is confusing the lack of annual reports with zero ongoing state obligations. An LLC above the $2.47 million revenue threshold owes franchise tax whether or not any Secretary of State report exists, and the margin calculation gets complicated quickly once the tax applies. Below the threshold the tax bill is $0, though the Comptroller still expects a Public Information Report each year. LLCs whose revenue is approaching the threshold benefit from professional tax review. Additionally, foreign LLCs seeking to operate in Texas must qualify with a Certificate of Authority filing.
State-specific tax considerations
Texas imposes no state income tax on individuals or pass-through entities, making it highly attractive for LLC formation and operation. LLCs are treated as pass-through entities by default; income passes to members undiminished by state-level income taxation. Multi-member LLCs taxed as partnerships file a Texas Partnership Report with the Comptroller; single-member LLCs taxed as disregarded entities report income solely on the member's personal return to the IRS. This zero-income-tax environment is a major advantage when compared to high-tax states.
The Texas Franchise Tax is the primary state-level tax concern. As noted, an LLC with annualized total revenue at or below $2.47 million owes no franchise tax, and there is no minimum payment. Above that line, the tax is figured on taxable margin (Texas dropped the old earned-surplus base in 2008): broadly, total revenue less the most favorable single deduction among cost of goods sold, compensation, 30% of revenue, or a flat $1 million. The rate on that margin is 0.375% for retail and wholesale businesses and 0.75% for everyone else. Sales tax registration is required if the LLC sells tangible goods in Texas. Texas sales tax rate is 6.25%, with localities optionally adding up to 2%, making combined rates 6.25% to 8.25%. Payroll tax registration is mandatory upon hiring; employers must register with the Texas Workforce Commission for unemployment insurance.
Frequently asked questions
Does Texas have state income tax?
No. Texas imposes no state income tax on individuals or pass-through entities. This zero-income-tax environment is one of Texas's primary attractions for LLC formation, particularly for businesses generating substantial revenue.
What is the Texas Franchise Tax?
The Texas Franchise Tax applies to most business entities and is calculated on taxable margin: total revenue less the largest available deduction (cost of goods sold, compensation, 30% of revenue, or $1 million). An LLC with annualized total revenue of $2.47 million or less owes $0, and there is no minimum tax. Above the threshold, retail and wholesale businesses pay 0.375% of margin; all other businesses pay 0.75%.
Is a registered agent required in Texas?
Yes. Every Texas LLC must maintain a registered agent with a physical address in the state. The agent can be you if you maintain a Texas address, or a professional service ($75-150 annually). The agent receives legal documents on behalf of the LLC.
Does Texas require annual reports?
No. Texas LLCs are not required to file annual reports with the Secretary of State, which simplifies ongoing compliance compared to many other states. However, LLCs remain subject to Texas Franchise Tax if applicable.
Sources & verification
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