How to Start a Texas LLC (2026): $300, No Income Tax, 8 Steps

Q: How much does it cost to start a Texas LLC?

The required cost is $300, the Certificate of Formation (Form 205) filing fee paid to the Texas Secretary of State. Filing online by card adds a ~2.7% convenience fee (about $8), for a typical all-in total near $308. Registered agent service, expedited processing, and name reservation are optional. Qualifying veteran-owned businesses may have the $300 fee waived.

Q: Does a Texas LLC have to file an annual report?

Texas has no traditional annual report or fee. Instead, every LLC files an annual franchise tax report with the Texas Comptroller by May 15, which includes a Public Information Report (PIR). Most small LLCs owe $0 because revenue is under the no-tax-due threshold ($2.65M for 2026), but the report must still be filed or a $50 penalty applies.

Q: Do Texas LLCs pay state income tax?

No. Texas has no personal state income tax. You still owe federal income tax and self-employment tax on your LLC's profit, and the entity may owe Texas franchise tax if revenue exceeds $2.65M, but there is no Texas income tax.

Q: Do I need a registered agent for my Texas LLC?

Yes. Every Texas LLC must maintain a registered agent with a physical Texas street address (no P.O. boxes). You can be your own agent for free if you have a Texas address and don't mind it being public, or hire a service for about $125/year to keep your address private.

Q: Can I form a Texas LLC if I don't live in Texas?

You can, but for most out-of-state owners it isn't worth it. If you operate from another state, you'd have to register the Texas LLC as a foreign LLC in your home state too, paying double fees. Form in your home state instead. Non-US residents with no home state often choose Wyoming.

Starting a Texas LLC: The Short Version

A Texas LLC gives you personal liability protection and a flexible, pass-through tax structure in a state with no personal income tax. You create one by filing a single document — the Certificate of Formation — with the Texas Secretary of State for $300.

The whole process breaks into 8 steps, and you can do it yourself. This page is the map: it links to a detailed guide for each step, shows you the real cost, and explains the one ongoing obligation Texas owners forget — the annual franchise tax report. New to LLCs entirely? Start with our how to start an LLC overview, then come back here for the Texas specifics.

Texas LLC formation guide showing the Texas state flag and business documents

The 8 Steps to Form a Texas LLC

Here's the full path from idea to active business. Click any step for the complete walkthrough:

Name Your LLC

Search SOSDirect to confirm your name is available and meets Texas naming rules.

Registered Agent

Appoint an agent with a physical Texas street address to receive legal mail.

Certificate of Formation

File Form 205 with the Secretary of State and pay the $300 fee. This creates your LLC.

Operating Agreement

Not filed with the state, but essential — it sets ownership, roles, and rules.

Get an EIN

Free from the IRS. Needed for a bank account, taxes, and hiring.

Franchise Tax & PIR

Your annual obligation, due May 15 — usually $0 owed, but you must still file.

Business Licenses

Texas has no general state license, but your city, county, or industry may.

LLC Taxes

No state income tax — but federal income and self-employment tax still apply.

Texas LLC Cost Calculator (2026)

The mandatory cost of a Texas LLC is exactly $300 — everything else is optional. Toggle the options below to see your real Year-1 total and what you'll pay each year afterward:

Texas LLC Cost Calculator

$300 base filing fee · toggle add-ons for your real Year-1 total

Registered agent (Year 1)

Optional add-ons

Expedited filingTexas Express — faster approval

+$50

Name reservationHold your name 120 days (Form 501)

+$40

Certified copySome banks/lenders ask for one

+$30

Pay online by cardSOSDirect adds a 2.7% convenience fee

2.7%

Your Year-1 Total

$308

one-time, to launch your LLC

Ongoing (Year 2+): $125/yr registered agent. Franchise tax is $0 while revenue stays under $2.65M — but you still file a Public Information Report by May 15.

2026 figures: $300 Certificate of Formation fee, optional Texas Express expedite (from ~$50; tiers changed Oct 2025 — verify on sos.texas.gov), $40 name reservation, $30 certified copy, and a 2.7% card convenience fee on SOSDirect. Veteran-owned new businesses may qualify to have the $300 fee waived. DIY filing is always the cheapest path.

Texas LLC Costs and Fees

Texas charges more to form than most states, but it makes up for it with no annual report fee and no state income tax. Here's the full picture:

Item	Cost	Notes
Certificate of Formation	$300	One-time, Form 205 — required
Online card fee	~2.7% (~$8)	SOSDirect credit-card convenience fee
Registered agent	$0–$125/yr	$0 if you act as your own; ~$125/yr for a service
Expedited filing	From ~$50	Texas Express tiers (next-day/same-day cost more)
Name reservation	$40	Optional — holds a name 120 days
EIN	$0	Always free at IRS.gov
Annual report	$0	Texas has none — only the franchise tax/PIR
Foreign LLC registration	$750	For LLCs formed outside Texas registering to do business in TX

Compare these against every other state in our LLC filing fees by state and annual fees by state guides.

Texas Franchise Tax: The One Thing Owners Forget

Texas has no annual report in the usual sense, but it does have an annual franchise tax report, and missing it is the most common Texas LLC mistake. The good news: most small LLCs owe nothing.

For the 2026 report year, the no-tax-due threshold is $2.65 million in annualized total revenue (up from $2.47M in 2025). If your LLC is at or below that, you owe $0 in franchise tax — but you must still file a Public Information Report (PIR) by May 15.

Filing and paying are separate obligations. Skipping the report — even when you owe nothing — triggers a $50 late penalty and can put your LLC out of good standing. Your first report is due May 15 of the year after you form. The full mechanics live on our Texas franchise tax & PIR step page.

A single-member LLC still filesEven if your LLC is a disregarded entity reporting income on your personal Schedule C, it's still a taxable entity for the Texas franchise tax. The $0-owed rule applies, but the PIR filing requirement does not go away.

Should You Form Your LLC in Texas?

Form in Texas if you live or do business there — that's the rule for nearly everyone. The no-income-tax, no-annual-report combination makes it genuinely attractive for residents and Texas-based operations.

What you should not do is form a Texas LLC just to chase the "no income tax" headline if you live elsewhere. If you operate from another state, you'd have to register your Texas LLC as a foreign LLC back home — paying two sets of fees and gaining nothing. Our best state to form an LLC guide explains why your home state almost always wins.

Ahmad Adil's Take: If you're a Texas resident, this is an easy yes — $300 once, no income tax, no annual fee, and the franchise tax is $0 for the vast majority of small businesses. File it yourself through SOSDirect, act as your own registered agent if privacy isn't a concern, and your real all-in cost is about $308. The only thing I'd pay extra for is a registered agent if you don't want your home address on the public record.

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Frequently Asked Questions

Texas LLC — FAQ

How much does it cost to start a Texas LLC?

The required cost is $300 — the Certificate of Formation (Form 205) filing fee paid to the Texas Secretary of State. Filing online by card adds a ~2.7% convenience fee (about $8), bringing the typical all-in total to roughly $308. Everything else — registered agent service, expedited processing, name reservation — is optional. Qualifying veteran-owned businesses may have the $300 fee waived.

How long does it take to get a Texas LLC?

Online filings through SOSDirect are typically approved within a few business days, though times fluctuate with the Secretary of State's volume. Mail filings take roughly 7–10 business days plus postal transit. If you have a hard deadline, expedited processing is available through the Texas Express program for an added fee. Online is always faster than mail.

Does a Texas LLC have to file an annual report?

Texas has no traditional annual report or annual report fee. Instead, every LLC files an annual franchise tax report with the Texas Comptroller by May 15, which includes a Public Information Report (PIR). Most small LLCs owe $0 in franchise tax because their revenue is under the no-tax-due threshold ($2.65M for 2026), but the report must still be filed — skipping it triggers a $50 penalty.

Do Texas LLCs pay state income tax?

No. Texas has no personal state income tax, which is one of its biggest draws. You'll still owe federal income tax and self-employment tax on your LLC's profit, and the entity may owe Texas franchise tax if revenue exceeds $2.65M — but there's no Texas income tax on you or the business.

What is a Certificate of Formation in Texas?

The Certificate of Formation (Form 205) is the document that legally creates your Texas LLC — it's Texas's version of what other states call "Articles of Organization." You file it with the Texas Secretary of State with your LLC name, registered agent, management structure, and organizer's signature, plus the $300 fee. Don't search for "Articles of Organization" for Texas; that term can lead you to paid third-party sites.

Do I need a registered agent for my Texas LLC?

Yes. Every Texas LLC must continuously maintain a registered agent with a physical Texas street address (no P.O. boxes) to receive legal documents and state notices. You can be your own agent for free if you have a Texas address and don't mind it being public, or hire a service (about $125/year) to keep your address private and ensure you never miss service of process.

Can I form a Texas LLC if I don't live in Texas?

You can, but for most out-of-state owners it's not worth it. If you operate from another state, you'd have to register the Texas LLC as a foreign LLC in your home state too — paying double fees and maintaining two registered agents. Form in your home state instead. Non-US residents with no home state are a different case and often choose Wyoming. See our best state to form an LLC guide.

About the Author

Ahmad Adil

Ahmad Adil is the founder and CEO of LLC School. The figures on this page were verified against the Texas Secretary of State Form 205 instructions and fee schedule and the Texas Comptroller's 2026 franchise tax guidance, including the updated $2.65M no-tax-due threshold. LLC School updates its Texas guides whenever the state changes its process or fees.

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How to Start a Texas LLC (2026 Step-by-Step Guide)