LLC Costs in Texas (TX)
Open-data reference.
Texas has a franchise tax but most small LLCs (under $2.47M annual revenue) owe $0. The $300 filing fee is higher than average, but no annual report fee applies. Texas has no personal income tax and is a major business hub.
Updated 2025 · Source: Texas Secretary of State
Complete Cost Breakdown
| Cost Item | Amount |
|---|---|
| State Filing Fee | $300 |
| Franchise Tax Report | Free |
| Registered Agent | $125/yr |
| Expedited Filing (optional) | $25 |
| Total — First Year | $425 |
Cheapest states vs. Texas
What Texas LLC Costs Really Mean for Small Business Owners
Texas charges a $300 filing fee to form an LLC and does not charge an annual report fee. Including a registered agent ($125/yr), the total first-year cost is $425. Across all 50 states plus DC, LLC formation costs range from roughly $50 (Kentucky, Arkansas, New Mexico) to over $800 (Massachusetts, California with its $800 franchise tax) — a 16x gap. Texas ranks #41 of 51 states on total first-year cost, which is 12% above the national average of $381.
According to Census Bureau Business Formation Statistics, Americans filed over 5.5 million business applications in 2024, with LLC filings accounting for the majority of new formal business entities. The LLC structure is popular because it provides limited liability protection like a corporation while allowing pass-through taxation (profits flow to the owner's personal return via Schedule C, K-1, or 1040), avoiding the double taxation of C-corps. IRS Statistics of Income data shows LLCs represent roughly 70% of new business entity formations nationally. Texas offers online filing through the Secretary of State, which typically processes faster than paper submissions. Standard processing in Texas runs 5-7 business days, with expedited service available for an additional $25 reducing this to Same business day.
Budget beyond the state's direct fees. Most small business owners also spend $500–$2,000 in year one on general liability insurance, $50–$500 on business licenses and permits (varies by city and industry), and optionally $0–$500 on operating agreement templates or attorney review. Federal EIN applications are free through the IRS. If you plan to hire employees, add state unemployment tax registration and workers' compensation insurance. The total "all-in" cost to launch a functional LLC in Texas — fees, insurance, licensing, and basic setup — typically lands between $925 and $2,925 in year one, depending on industry and coverage choices. Verify all current fees directly with the Texas Secretary of State at https://www.sos.state.tx.us before filing, as rates can change with each budget cycle.
How to Form an LLC in Texas
Your LLC name must include "Limited Liability Company", "LLC", or "L.L.C." and be distinguishable from other businesses registered in Texas. Check name availability on the Texas Secretary of State website before filing.
Every Texas LLC must have a registered agent with a physical street address in Texas. You can serve as your own agent, use a business member, or hire a professional registered agent service (~$125/year).
Submit your Articles of Organization (sometimes called Certificate of Organization or Certificate of Formation) to the Texas Secretary of State online. The filing fee is $300. Standard processing time is 5-7 business days. Expedited filing ($25) reduces this to Same business day.
While not always required by Texas law, an operating agreement is strongly recommended. It defines ownership percentages, management structure, profit distribution, and procedures for adding members or dissolving the LLC. Keep this document internally — you don't file it with the state.
Apply for a federal Employer Identification Number (EIN) from the IRS — it's free and takes minutes online. You'll need your EIN to open a business bank account, hire employees, and file federal taxes. Keep your business finances completely separate from personal accounts.
Texas requires LLCs to file a Franchise Tax Report annually. This filing is free. Failing to file can result in your LLC being administratively dissolved.
How Texas Compares
Texas is $44 (12%) more expensive than the national average for first-year LLC costs.
Cost rank: #41 out of 51 states (#1 = cheapest).
Common Questions About Texas LLCs
How long does it take to form an LLC in Texas?
Standard processing time is 5-7 business days. Expedited service costs $25 and reduces this to Same business day. Online filing, when available, often processes faster than paper filing.
How much does the Texas annual LLC fee cost?
Texas requires a Franchise Tax Report annually. The fee is free (no charge).
Can I file my Texas LLC online?
Yes — Texas offers online LLC filing through the Secretary of State's website at https://www.sos.state.tx.us. Online filing is generally faster than paper filing.
Do I need an attorney to form an LLC in Texas?
No — you can form an LLC in Texas without an attorney by filing directly with the Secretary of State. However, consulting an attorney is recommended for complex ownership structures, operating agreements, industry-specific regulations, or multi-state operations. Attorney fees are not included in our cost estimates.
Texas LLC Quick Facts
Similar Cost States
Lower-Cost Alternatives
States with lower first-year costs (may require foreign LLC registration if operating in TX):
Compare All States
See how Texas stacks up against all 50 states and DC in one sortable table.
View Full ComparisonRead our methodology — how this data is sourced, computed, and verified.
All federal data sources used on this page
- U.S. Census Bureau ACS — demographic + housing + income data. census.gov/programs-surveys/acs
- BLS Occupational Employment and Wage Statistics (OEWS) — wage + employment by occupation. bls.gov/oes
- BEA Regional Economic Accounts — GDP + personal income by state/metro. bea.gov/data/regional
- U.S. Census Bureau County Business Patterns — establishment + employment by industry. census.gov/cbp
- IRS Statistics of Income (SOI) — tax-return aggregate data. irs.gov/statistics
- data.gov — U.S. federal open-data portal — discovery layer for additional federal sources. data.gov