California LLC vs Texas LLC (2026)
Written for owners based in California.
Based in Texas? Read Texas LLC vs California LLC →
Compare California LLC vs Texas LLC on filing fees, taxes, privacy laws, and annual costs. Find out which state is actually better for your business.
Last updated: September 23, 2026
Verdict: for most owners, form where the business is based
Texas charges $300 to form, one of the highest flat fees anywhere, and then nothing recurring at the Secretary of State. The catch is that the annual filing moves to the Comptroller: a Public Information Report is due every May 15 even when total revenue is under the $2,650,000 no-tax-due threshold, and skipping it starts tax forfeiture. Texas levies no personal income tax. California's $70 filing fee is a fraction of that, but $880 in year one and $810 after come from the $800 tax. A Texas LLC used from California takes another $70 to register.
Using a formation service? We compare the 4 formation services that pay us a commission, on three-year service cost, BBB rating and Trustpilot score.
Compare LLC formation services →Ready to file? Our affiliate partner ZenBusiness files your LLC formation paperwork, from $0 + state fee.
Start your LLC with ZenBusiness →Affiliate link. We may earn a commission at no cost to you. IncACA is not a law firm and does not provide legal advice.
| Factor | California | Texas |
|---|---|---|
| Filing Fee | $70 | $300 |
| Processing Time | Live queue, not fixed | Not published by the state |
| Annual Report Fee | $20 (biennial) | $0 |
| Annual Report Due | Anniversary month | May 15 |
| State Income Tax | Yes | No |
| Anonymous LLC | No | No |
| Publication Requirement | No | No |
| Foreign LLC Cost (if forming out-of-state) | N/A, you're in your home state | $70 + registered agent ~$150/yr |
Full fee breakdown for either state: California LLC cost and Texas LLC cost.
Business Climate: California vs Texas
| Factor | California | Texas |
|---|---|---|
| 5-year business survival rate | 53.7% (#12 of 51) | 52.5% (#20 of 51) |
| Business application growth (2026 YTD (Jan to Jul) vs 2025 YTD (same months)) | +14.7% YoY (#2 of 51 by volume) | +13.7% YoY (#3 of 51 by volume) |
Sources: U.S. Bureau of Labor Statistics, Business Employment Dynamics · U.S. Census Bureau, Business Formation Statistics (BFS)
Compare LLC Costs: California vs Texas
California
Texas
A figure shown as "from" is the least the state can charge, not a price. Tennessee's report is $300 for up to six members and $50 for each member above six, its franchise tax is the greater of $100 or 0.25% of Tennessee net worth, Wyoming's report is the greater of $60 or $.0002 per dollar of in-state assets, Kentucky's entity tax is $175 up to $3 million of gross receipts and graduated above it, and New York's annual filing fee is graduated on New York source gross income. A total that contains one of those is shown as "from" for the same reason. Costs include every mandatory state charge: the filing fee, the report fee (annualised where a state files biennially), any state entity-level tax shown in its own row above, a one-time publication cost where the state publishes a rate for it, and any one-time registration charge a state requires before the LLC may trade. Two exclusions follow from that wording. Arizona and Nebraska require publication and publish no rate, so no newspaper cost is carried for either and their totals are not the whole cost. Alaska's $50 annual state business licence is a separate charge from the Secretary of State fees and is not carried here either. Annualising makes the 1, 3 and 5 year rows a cost of ownership rather than a payment schedule: a biennial state charges its whole report fee in the years it falls due and nothing in between. Entity-level taxes that only apply after a corporate election, or above an owner or income threshold, are excluded and flagged on the state's own cost page. New York's publication cost is carried at a $250 floor, roughly $200 of newspaper cost in a low-cost county plus the $50 Certificate of Publication fee. No county-clerk-designated New York City newspaper publishes a rate card, so the four-figure NYC estimates in wide circulation cannot be traced to a primary source and are not asserted here; budget for materially more than the floor if you file in a NYC county. Every fee was verified against the state's own fee schedule, statute, or revenue authority on 29 July 2026. Excludes registered agent and legal fees. For informational purposes only, not legal or tax advice.
Filing Fees & Formation Costs
California charges $70 to form an LLC, while Texas charges $300. California is $230 cheaper upfront. The cost that usually gets overlooked: if you form in Texas but operate in California, you must also register as a foreign LLC in California (a $70 filing) and maintain a registered agent in Texas (typically around $150 per year). That puts the realistic first-year cost of the Texas route at roughly $520, versus $70 for simply forming in California. Speed isn't a basis for choosing between them: neither California nor Texas publishes a standard processing time, so any figure comparing the two is guesswork.
Taxes: California vs Texas
Texas has no personal income tax while California does, but forming your LLC in Texas won't change that. LLC profits pass through to you and are taxed where you live and operate (in California), not where the LLC is registered, so a Texas LLC offers no income-tax savings for a California-based business. California LLCs owe an $800 minimum annual franchise tax to the Franchise Tax Board, plus an LLC gross-receipts fee above $250,000 of California income. Texas imposes a franchise tax; LLCs under the no-tax-due threshold ($2,650,000 total revenue for 2026-27 reports) owe $0 but must still file an annual Public Information Report.
Privacy & Asset Protection
Neither California nor Texas offers anonymous LLC formation: both states require owner or manager information on public filings. The Certificate of Formation (Form 205) must name at least one governing person (member or manager), a public record; the annual Public Information Report also discloses management. Business owners who prioritize privacy typically form a holding company in a state like Wyoming or New Mexico instead. Both states provide charging-order protection for LLC members, and for most small businesses the practical difference in asset protection between the two is minimal.
Annual Maintenance Costs
California LLCs file a biennial report ($20, due in the anniversary month, every two years), and Texas LLCs file a free annual report (due May 15). If you form in Texas while operating in California, you maintain filings in both states, Texas's report plus California's equivalent for your foreign registration, and pay a Texas registered agent roughly $150 per year. Counting report fees, the agent and any entity-level tax, that brings the Texas route to roughly $170 a year, versus about $820 to keep a domestic California LLC in good standing. The taxes inside those totals: California LLCs owe an $800 minimum annual franchise tax to the Franchise Tax Board, plus an LLC gross-receipts fee above $250,000 of California income. Texas imposes a franchise tax; LLCs under the no-tax-due threshold ($2,650,000 total revenue for 2026-27 reports) owe $0 but must still file an annual Public Information Report.
When Texas Actually Makes Sense
Forming in Texas makes sense in a few specific situations: your business genuinely operates in Texas, with a real office, employees, or property there, or you're relocating to Texas in the near future, which would also move you out of California's personal income tax. For a typical small business based in California, none of these usually apply. Registering a Texas LLC to do business back home means $70 in California foreign-registration fees, on top of Texas's $300 formation fee, while California's own biennial report runs $20 and is due in the anniversary month, every two years. When in doubt, form where you actually do business.
Frequently Asked Questions
Ready to form your LLC?
Using a formation service? We compare the 4 formation services that pay us a commission, on three-year service cost, BBB rating and Trustpilot score.
Compare LLC formation services →Our affiliate partner ZenBusiness files your LLC formation paperwork, from $0 + state fee.
Start your LLC with ZenBusiness →Affiliate link. We may earn a commission at no cost to you. IncACA is not a law firm and does not provide legal advice.
More State Comparisons
Embed this comparison, free
Add the California vs Texas cost calculator to any page. Works in WordPress, Squarespace, Webflow, and any HTML site.
<iframe src="https://www.incaca.com/tools/compare-states?embed=1&stateA=CA&stateB=TX" width="100%" height="720" frameborder="0" style="border:0;max-width:900px;display:block;margin:0 auto;" title="California vs Texas LLC Cost Comparison" loading="lazy"></iframe> <p style="text-align:center;font-size:.8125rem;color:#6b7280">Source: <a href="https://www.incaca.com/llc/compare/california-llc-vs-texas-llc">IncACA, California vs Texas LLC Comparison</a></p>