Texas LLC vs Illinois LLC (2026)
Compare Texas LLC vs Illinois 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: Texas wins for most businesses
For most Texas-based businesses, forming locally in Texas is the smarter choice. You avoid paying fees in two states and managing compliance in both. Illinois only makes sense if your business genuinely operates there, and even then the total costs deserve a hard look.
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| Factor | Texas | Illinois |
|---|---|---|
| Filing Fee | $300 | $150 |
| Processing Time | Not published by the state | Not published by the state |
| Annual Report Fee | $0 | $75 |
| Annual Report Due | May 15 | Before 1st of anniversary month |
| State Income Tax | No | Yes |
| Anonymous LLC | No | No |
| Publication Requirement | No | No |
| Foreign LLC Cost (if forming out-of-state) | N/A, you're in your home state | $750 + registered agent ~$150/yr |
Full fee breakdown for either state: Texas LLC cost and Illinois LLC cost.
Business Climate: Texas vs Illinois
| Factor | Texas | Illinois |
|---|---|---|
| 5-year business survival rate | 52.5% (#20 of 51) | 55.6% (#3 of 51) |
| Business application growth (2026 YTD (Jan to Jul) vs 2025 YTD (same months)) | +13.7% YoY (#3 of 51 by volume) | +7.7% YoY (#7 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: Texas vs Illinois
Texas
Illinois
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
Texas charges $300 to form an LLC, while Illinois charges $150. Illinois is $150 cheaper upfront. The cost that usually gets overlooked: if you form in Illinois but operate in Texas, you must also register as a foreign LLC in Texas (a $750 filing) and maintain a registered agent in Illinois (typically around $150 per year). That puts the realistic first-year cost of the Illinois route at roughly $1,050, versus $300 for simply forming in Texas. Speed isn't a basis for choosing between them: neither Texas nor Illinois publishes a standard processing time, so any figure comparing the two is guesswork.
Taxes: Texas vs Illinois
Texas has no personal income tax, while Illinois taxes individual income. Since pass-through LLC profits are taxed where you live and operate, a Texas-based owner keeps Texas's no-income-tax benefit either way. Forming in Illinois adds no tax advantage. 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 Texas nor Illinois offers anonymous LLC formation: both states require owner or manager information on public filings. Illinois doesn't permit anonymous LLC formation; management is disclosed on public filings. 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
Texas LLCs file a free annual report (due May 15), and Illinois LLCs file an annual report ($75, due in the anniversary month). If you form in Illinois while operating in Texas, you maintain filings in both states, Illinois's report plus Texas's equivalent for your foreign registration, and pay an Illinois registered agent roughly $150 per year. That brings ongoing costs of the Illinois route to roughly $225 per year, versus about $0 to keep a domestic Texas 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 Illinois Actually Makes Sense
Forming in Illinois makes sense in a few specific situations: your business genuinely operates in Illinois, with a real office, employees, or property there, or you're relocating to Illinois in the near future and accept taking on Illinois's personal income tax, which Texas doesn't levy. For a typical small business based in Texas, none of these usually apply. Registering an Illinois LLC to do business back home means $750 in Texas foreign-registration fees, on top of Illinois's $150 formation fee, while Texas's own annual report stays free to file and is due May 15. When in doubt, form where you actually do business.
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<iframe src="https://www.mystatellc.com/tools/compare-states?embed=1&stateA=TX&stateB=IL" width="100%" height="720" frameborder="0" style="border:0;max-width:900px;display:block;margin:0 auto;" title="Texas vs Illinois 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/texas-llc-vs-illinois-llc">MyStateLLC, Texas vs Illinois LLC Comparison</a></p>