Delaware LLC vs Texas LLC (2026)

Business Climate: Delaware vs Texas

Sources: U.S. Bureau of Labor Statistics, Business Employment Dynamics · U.S. Census Bureau, Business Formation Statistics (BFS)

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Compare LLC Costs: Delaware vs Texas

Filing Fees & Formation Costs

Delaware charges $90 to form an LLC, while Texas charges $300. Delaware is $210 cheaper upfront. The cost that usually gets overlooked: if you form in Texas but operate in Delaware, you must also register as a foreign LLC in Delaware — a $200 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 $650, versus $90 for simply forming in Delaware. Timing differs more than cost here: Texas approves standard online filings in about 3 business days, while Delaware takes about 7 business days.

Taxes: Delaware vs Texas

Texas has no personal income tax while Delaware does — but forming your LLC in Texas will not change that. LLC profits pass through to you and are taxed where you live and operate (in Delaware), not where the LLC is registered, so a Texas LLC offers no income-tax savings for a Delaware-based business. Delaware LLCs owe a flat $300 annual LLC tax (no report required). 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

Delaware — your home state — actually offers more formation privacy than Texas: Delaware allows anonymous LLC formation, while Texas requires 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. 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. From a privacy standpoint there is no reason for a Delaware-based business to form in Texas.

Annual Maintenance Costs

Delaware LLCs file an annual report ($300, due June 1), and Texas LLCs file a free annual report (due May 15). If you form in Texas while operating in Delaware, you maintain filings in both states — Texas's report plus Delaware's equivalent for your foreign registration — and pay a Texas registered agent roughly $150 per year. That brings ongoing costs of the Texas route to roughly $450 per year, versus about $300 to keep a domestic Delaware LLC in good standing. There are also recurring state taxes to weigh on each side. Delaware LLCs owe a flat $300 annual LLC tax (no report required). 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 are relocating to Texas in the near future. For a typical small business based in Delaware, none of these usually apply — and the extra formation, foreign-registration, and maintenance costs of the Texas route buy little in return. When in doubt, form where you actually do business.

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