What Does an LLC Cost in Texas?
Texas is front-loaded: $300 once, then $0 a year in state charges for the typical small LLC. The franchise tax is real but starts above $2.65 million in revenue. Here is the whole state bill.
Year one: what you pay to exist
| Year-one cost in Texas | Amount |
|---|---|
| Certificate of Formation (Form 205), Secretary of State | $300 |
| Credit card convenience fee if you pay by card ($0.25 + 2.25%) | About $7 on the filing fee |
| EIN from the IRS | $0 |
| Company agreement (you write it, not filed) | $0 |
| Total state cost, year one | $300 |
Texas's $300 is the highest formation fee among our five states and it is not close. A registered agent service adds roughly $125 to $249 a year if you hire one. There are no other state formation charges: no publication, no separate state EIN-style registration, no initial report.
Every year after: the cost of staying alive
| Recurring cost in Texas | Amount |
|---|---|
| Secretary of State annual report | $0. Texas does not have one for LLCs. |
| Franchise tax, total revenue at or under $2.65 million | $0 |
| Public Information Report to the Comptroller | $0 to file, due every year |
| Franchise tax above the threshold | 0.75% of taxable margin (0.375% for retail and wholesale) |
| Typical recurring total | $0 for most small LLCs |
For a Texas LLC under the revenue threshold, the recurring state cost is genuinely zero dollars, provided you actually file the free information report each year. A $50 penalty applies to each franchise tax report filed after the due date, so free is not the same as optional.
The franchise tax, in plain terms
The Texas franchise tax is a tax on the privilege of doing business in Texas, charged on an entity's margin (roughly, revenue minus a major cost category) rather than its profit. The Comptroller's current figures for 2026 and 2027:
| Item | Figure |
|---|---|
| No-tax-due threshold (total revenue) | $2,650,000 |
| Standard rate (most businesses) | 0.75% of margin |
| Retail and wholesale rate | 0.375% of margin |
| EZ Computation rate (revenue under $20 million) | 0.331% of revenue |
| Due date | May 15, every year |
| Late penalty | $50 per late report |
Note the threshold everyone gets wrong: older guides cite $2.47 million. The Comptroller's current threshold for 2026 and 2027 is $2.65 million. Texas has no personal income tax, which is part of why the franchise tax exists, and the two facts together define the Texas cost profile: expensive to start, cheap to keep, taxed only at real scale.
Sources, checked Nov 7, 2026
Texas Secretary of State: Form 205 instructions ($300 fee, registered agent rules, SOSPortal), Form 304 instructions ($750 foreign registration), and corporations FAQs (no annual report to SOS, no publication requirement) at sos.state.tx.us. Texas Comptroller: franchise tax overview, rates and thresholds for 2026 and 2027, and Publication 98-806 at comptroller.texas.gov.
Run your own version, with an optional registered agent added, in the LLC cost calculator. If you would rather a service handled the filing, the services comparison prices that honestly, renewals included.
General Information Only
LLCForming publishes general information about forming and running an LLC. It is not legal, tax, or accounting advice, and it does not create an attorney or advisor relationship. Rules vary by state and by your situation. For a decision that matters, talk to a licensed attorney or tax professional in your state.