Forming an LLC in Texas: The $300 Upfront Cost and (Almost) Nothing After

Texas charges more upfront than most states and less than almost anyone after that. Here's the real cost picture for a Texas LLC.

Formation: $300, filed with the Secretary of State

You form a Texas LLC by filing a Certificate of Formation (Form 205) with the Texas Secretary of State. The filing fee is $300 — higher than states like Delaware ($110) or California ($70), and this is the one place Texas is more expensive than most.

After that, most small LLCs pay close to nothing

Texas has three features that make it unusually cheap to maintain:

• No state income tax — for a single-member LLC taxed as a sole proprietorship, profit passes through to your personal return and Texas takes nothing. On $100,000 of LLC profit, a California owner might owe $9,000–$13,000 in state income tax; a Texas owner owes $0.
• No annual report fee. Texas doesn't charge a separate fee to file an annual report the way many states do.
• No publication requirement. Unlike New York, Texas doesn't require you to publish a formation notice in a newspaper.

The franchise (margin) tax — and why most LLCs owe nothing

Texas does impose a franchise tax, sometimes called the "margin tax," on entities formed or doing business in the state. For 2026–2027 reporting periods, businesses with annualized total revenue at or below roughly $2.47–2.65 million owe no franchise tax at all. Above that threshold, the rate is 0.375% for retail and wholesale businesses and 0.75% for most other businesses.

Owing no tax doesn't mean filing nothing, though. Every Texas LLC — even one with zero revenue — must still file a Public Information Report (PIR) with the Texas Comptroller by May 15 each year, listing officers, managers, or members. Texas discontinued the old separate "No Tax Due Report," so the PIR is now the primary annual filing. It has no fee, but skipping it can put your LLC out of compliance even when you owe nothing.

Common mistakes

• Believing "no annual report fee" means "no annual filing." You still owe the Public Information Report every May 15, fee or no fee.
• Falling for third-party "annual report" scams. Some services send official-looking notices charging $50–$150 for a filing that Texas doesn't actually require. File the PIR yourself through the Comptroller's WebFile system, or through a service you trust — but know there's no legitimate state fee attached to it.
• Paying by credit card without checking the surcharge. Texas charges a statutory ~2.7% convenience fee on card payments to the Secretary of State; paying by check avoids it.
• Assuming zero income tax means zero compliance burden. You still need a registered agent, an operating agreement (not legally required in Texas, but you should have one anyway to protect your liability shield), and the annual PIR.

What Texas gives you in exchange for the higher entry fee

No income tax, minimal ongoing state-level cost for small LLCs under the revenue threshold, and no publication requirement — which is exactly the cost New York adds back in (see our New York LLC guide).

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Forming a Texas LLC? Talking Tree's LLC Formation Guide and attorney-drafted Operating Agreement template are available in Cedar, and Find Counsel can connect you with a Texas business attorney for anything more complex.

This article is for general informational purposes only and does not constitute legal or tax advice. Fees and thresholds change — confirm current figures with the Texas Secretary of State and Comptroller before filing.