Illinois LLC vs Texas LLC (2026)
Compare Illinois LLC vs Texas LLC on filing fees, taxes, privacy laws, and annual costs. Find out which state is actually better for your business.
By Edmond Hui · Last updated: August 13, 2026
Verdict: Illinois wins for most businesses
For most Illinois-based businesses, forming locally in Illinois is the smarter choice. You avoid paying fees in two states and managing compliance in both. Texas only makes sense if your business genuinely operates there, and even then the total costs deserve a hard look.
Ready to file? Our affiliate partner ZenBusiness files your Illinois LLC formation paperwork, from $0 + state fee.
Start your Illinois LLC with ZenBusiness →Affiliate link. We may earn a commission at no cost to you · compare all formation services. MyStateLLC is not a law firm and does not provide legal advice.
| Factor | Illinois | Texas |
|---|---|---|
| Filing Fee | $150 | $300 |
| Processing Time | Not published by the state | Not published by the state |
| Annual Report Fee | $75 | $0 |
| Annual Report Due | Before 1st of 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 | $150 + registered agent ~$150/yr |
Full fee breakdown for either state: Illinois LLC cost and Texas LLC cost.
Business Climate: Illinois vs Texas
| Factor | Illinois | Texas |
|---|---|---|
| 5-year business survival rate | 55.6% (#3 of 51) | 52.5% (#20 of 51) |
| Business application growth (2026 YTD (Jan to Jul) vs 2025 YTD (same months)) | +7.7% YoY (#7 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: Illinois vs Texas
Illinois
Texas
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 a state requires publication, and any one-time registration charge a state requires before the LLC may trade. 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. Montana's annual report is free when filed by April 15 and $35 after, a waiver the Secretary of State applies at its discretion. 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
Illinois charges $150 to form an LLC, while Texas charges $300. Illinois is $150 cheaper upfront. The cost that usually gets overlooked: if you form in Texas but operate in Illinois, you must also register as a foreign LLC in Illinois (a $150 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 $600, versus $150 for simply forming in Illinois. Speed isn't a basis for choosing between them: neither Illinois nor Texas publishes a standard processing time, so any figure comparing the two is guesswork.
Taxes: Illinois vs Texas
Texas has no personal income tax while Illinois 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 Illinois), not where the LLC is registered, so a Texas LLC offers no income-tax savings for an Illinois-based business. Illinois levies a flat 4.95% personal income tax. 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 Illinois 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
Illinois LLCs file an annual report ($75, due in the anniversary month), and Texas LLCs file a free annual report (due May 15). If you form in Texas while operating in Illinois, you maintain filings in both states, Texas's report plus Illinois'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 $225 per year, versus about $75 to keep a domestic Illinois LLC in good standing. One more recurring cost to budget for: 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 Illinois's personal income tax. For a typical small business based in Illinois, none of these usually apply. Registering a Texas LLC to do business back home means $150 in Illinois foreign-registration fees, on top of Texas's $300 formation fee, while Illinois's own annual report runs $75 a year and is due in the anniversary month. When in doubt, form where you actually do business.
Frequently Asked Questions
More State Comparisons
Embed this comparison, free
Add the Illinois vs Texas cost calculator to any page. Works in WordPress, Squarespace, Webflow, and any HTML site.
<iframe src="https://www.mystatellc.com/tools/compare-states?embed=1&stateA=IL&stateB=TX" width="100%" height="720" frameborder="0" style="border:0;max-width:900px;display:block;margin:0 auto;" title="Illinois vs Texas LLC Cost Comparison" loading="lazy"></iframe> <p style="text-align:center;font-size:.8125rem;color:#6b7280">Source: <a href="https://www.mystatellc.com/llc/compare/illinois-llc-vs-texas-llc">MyStateLLC, Illinois vs Texas LLC Comparison</a></p>