Texas LLC vs Montana LLC (2026)
Compare Texas LLC vs Montana 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. Montana 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 | Montana |
|---|---|---|
| Filing Fee | $300 | $35 |
| Processing Time | Not published by the state | Not published by the state |
| Annual Report Fee | $0 | $20 |
| Annual Report Due | May 15 | April 15 |
| 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 Montana LLC cost.
Business Climate: Texas vs Montana
| Factor | Texas | Montana |
|---|---|---|
| 5-year business survival rate | 52.5% (#20 of 51) | 53% (#16 of 51) |
| Business application growth (2026 YTD (Jan to Jul) vs 2025 YTD (same months)) | +13.7% YoY (#3 of 51 by volume) | +13.4% YoY (#40 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 Montana
Texas
Montana
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 Montana charges $35. Montana is $265 cheaper upfront. The cost that usually gets overlooked: if you form in Montana but operate in Texas, you must also register as a foreign LLC in Texas (a $750 filing) and maintain a registered agent in Montana (typically around $150 per year). That puts the realistic first-year cost of the Montana route at roughly $935, versus $300 for simply forming in Texas. Speed isn't a basis for choosing between them: neither Texas nor Montana publishes a standard processing time, so any figure comparing the two is guesswork.
Taxes: Texas vs Montana
Texas has no personal income tax, while Montana 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 Montana adds no tax advantage. Montana levies a two-bracket individual income tax; per HB 337 (2025) the top rate drops from 5.9% to 5.65% effective January 1, 2026, with the 4.7% lower rate applying up to $47,500 single/$95,000 joint (Montana Department of Revenue). 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. No franchise or privilege tax on LLCs; the Secretary of State currently waives the annual report fee for reports filed by April 15 ($35 if filed late).
Privacy & Asset Protection
Neither Texas nor Montana offers anonymous LLC formation: both states require owner or manager information on public filings. MCA 35-8-208 requires the LLC's annual report to state the names and business mailing addresses of the managers (if manager-managed) or of the members (if member-managed), and these reports are public. 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 Montana LLCs file an annual report ($20, due April 15). If you form in Montana while operating in Texas, you maintain filings in both states (Montana's report plus Texas's equivalent for your foreign registration) and pay a Montana registered agent roughly $150 per year. That brings ongoing costs of the Montana route to roughly $170 per year, versus about $0 to keep a domestic Texas LLC in good standing. There are also recurring state taxes to weigh on each side. 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. No franchise or privilege tax on LLCs; the Secretary of State currently waives the annual report fee for reports filed by April 15 ($35 if filed late).
When Montana Actually Makes Sense
Forming in Montana makes sense in a few specific situations: your business genuinely operates in Montana, with a real office, employees, or property there, or you're relocating to Montana in the near future and accept taking on Montana's personal income tax, which Texas doesn't levy. For a typical small business based in Texas, none of these usually apply. Registering a Montana LLC to do business back home means $750 in Texas foreign-registration fees, on top of Montana's $35 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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