New York LLC vs Texas LLC (2026)

Business Climate: New York 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: New York vs Texas

Filing Fees & Formation Costs

New York charges $200 to form an LLC, while Texas charges $300. New York is $100 cheaper upfront. The cost that usually gets overlooked: if you form in Texas but operate in New York, you must also register as a foreign LLC in New York — a $250 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 $700, versus $200 for simply forming in New York. Timing differs more than cost here: Texas approves standard online filings in about 3 business days, while New York takes about 7 business days. Note that New York also requires newly formed LLCs to publish a newspaper notice (New York requires publication of the LLC's formation once a week for six weeks in two county-designated newspapers (LLC Law §206)), which adds to the true formation cost.

Taxes: New York vs Texas

Texas has no personal income tax while New York 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 New York), not where the LLC is registered, so a Texas LLC offers no income-tax savings for a New York-based business. New York LLCs treated as partnerships/with NY-source income owe an annual filing fee of $25-$4,500 based on NY gross 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 New York 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

New York LLCs file a biennial report ($9, 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 New York, you maintain filings in both states — Texas's report plus New York'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 $159 per year, versus about $9 to keep a domestic New York LLC in good standing. There are also recurring state taxes to weigh on each side. New York LLCs treated as partnerships/with NY-source income owe an annual filing fee of $25-$4,500 based on NY gross 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 are relocating to Texas in the near future. For a typical small business based in New York, 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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