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LLC Cost Texas: The $300 Fee and the Franchise Tax People Misread

Checked against the Texas Secretary of State and Texas Comptroller on July 9, 2026.

Forming an LLC in Texas costs $300 up front, paid to the Texas Secretary of State for the Certificate of Formation. Texas does not charge a flat annual report fee, which is unusual among the larger states. Compare that against every other state's numbers with StartAnLLCGuide's full state-by-state cost tool before you commit to filing here.

Certificate of Formation

$300, paid once to the Texas Secretary of State when you file Form 205.

Annual report fee

None. Texas has no flat yearly filing charge the way most states do.

Franchise tax

Only above $2,650,000 in annualized total revenue for the 2026 report year, per the Texas Comptroller.

Why Texas Costs What It Costs

The $300 Certificate of Formation fee is set by the Texas Secretary of State and applies the same whether the LLC will run a food truck or hold real estate. It sits well above the national median, which runs closer to $100. What Texas gives back is the absence of a recurring report fee. Most states with a cheap filing fee make it up with a yearly bill; Texas front-loads the cost instead and then leaves most small LLCs alone unless revenue climbs into seven figures.

Will You Actually Owe Franchise Tax?

Total to file: $300. Threshold source: Texas Comptroller, Tax Code Section 171.006, 2026 report year.

A Worked Example

A freelance contractor files a Texas Certificate of Formation in September 2026 and pays the $300 fee. He does his own registered agent work, so there's no extra cost there. His first year of revenue comes in around $90,000, well under the $2,650,000 no-tax-due threshold, so he owes no Texas franchise tax. He still has to submit his Public Information Report to the Comptroller the following spring, a form, not a bill. His entire cash cost to exist as a Texas LLC that year is the $300 he already paid.

Who Actually Crosses the Threshold

Most single-owner service businesses and small shops never come close to $2,650,000 in annual revenue, so in practice the franchise tax section of this page doesn't apply to them at all. It matters more for LLCs with several employees, a wholesale or manufacturing operation, or multiple locations, where revenue (not profit) can climb past the threshold even in a year the business barely breaks even. Revenue is the trigger here, not net income, which surprises owners who assume a thin margin means no tax exposure. If your LLC does approach that range, the Comptroller's EZ Computation method or the standard Form 05-158 determines what's actually owed, and that calculation is separate from anything on this page.

Limitations of This Page

These numbers cover state-level costs only. They don't include a local occupational license some Texas cities and counties require, a franchise tax preparer's fee if your revenue crosses the threshold, or the cost of a formation service if you pay one to file the Certificate of Formation for you instead of doing it yourself through SOSDirect. An LLC that operates in Texas but was formed in another state also owes Texas a separate foreign-registration fee, which this page does not calculate.

Things to Know

Texas LLC Cost Questions

How much does it cost to form an LLC in Texas?

Texas charges $300 to file a Certificate of Formation for an LLC, according to the Texas Secretary of State's fee schedule. Beyond that one-time charge, Texas does not bill a flat annual report fee the way many states do.

Does a Texas LLC have to pay franchise tax every year?

Only if annualized total revenue is above the no-tax-due threshold, which the Texas Comptroller set at $2,650,000 for the 2026 report year under Tax Code Section 171.006. Below that, an LLC typically owes no franchise tax, though it must still submit its ownership or public information report.

If a Texas LLC owes no franchise tax, does it still have to file anything?

Yes. The Texas Comptroller requires a Public Information Report or Ownership Information Report every year regardless of revenue, even when no franchise tax is due. Skipping it can lead to forfeiture of the LLC's right to do business in Texas.

Do I have to pay for a registered agent in Texas?

No. Anyone with a physical Texas address who is available during business hours can serve as their own registered agent for free. A commercial registered agent service is optional and typically costs in the range of $50 to $150 a year.

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Priya Raman
About the author
Priya Raman

Contributing Writer, Policy & Regulation, Encore Editorial

Priya covers tax, regulation, and compliance: the rules that decide what you can and cannot do, usually filed in an obscure subsection that most people skip. She reads federal register notices in her spare time and is at peace with that being unusual.