Texas LLC vs Tennessee LLC (2026)
Compare Texas LLC vs Tennessee 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. Tennessee 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 | Tennessee |
|---|---|---|
| Filing Fee | $300 | $300 |
| Processing Time | Not published by the state | Not published by the state |
| Annual Report Fee | $0 | $300 |
| Annual Report Due | May 15 | April 1 |
| State Income Tax | No | 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 | $750 + registered agent ~$150/yr |
Full fee breakdown for either state: Texas LLC cost and Tennessee LLC cost.
Business Climate: Texas vs Tennessee
| Factor | Texas | Tennessee |
|---|---|---|
| 5-year business survival rate | 52.5% (#20 of 51) | 46.4% (#45 of 51) |
| Business application growth (2026 YTD (Jan to Jul) vs 2025 YTD (same months)) | +13.7% YoY (#3 of 51 by volume) | +19.9% YoY (#16 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 Tennessee
Texas
Tennessee
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 Tennessee charges $300. The upfront filing fees are identical. The cost that usually gets overlooked: if you form in Tennessee but operate in Texas, you must also register as a foreign LLC in Texas (a $750 filing) and maintain a registered agent in Tennessee (typically around $150 per year). That puts the realistic first-year cost of the Tennessee route at roughly $1,200, versus $300 for simply forming in Texas. Speed isn't a basis for choosing between them: neither Texas nor Tennessee publishes a standard processing time, so any figure comparing the two is guesswork.
Taxes: Texas vs Tennessee
Neither Texas nor Tennessee levies a personal income tax, so there's no income-tax advantage to forming in either state. 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. Tennessee imposes a franchise & excise tax on LLCs: $100 minimum franchise tax plus 6.5% excise tax on net earnings.
Privacy & Asset Protection
Neither Texas nor Tennessee offers anonymous LLC formation: both states require owner or manager information on public filings. Tennessee's annual report (a per-member filing) discloses the LLC's members/managers. 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 Tennessee LLCs file an annual report ($300, due April 1). If you form in Tennessee while operating in Texas, you maintain filings in both states, Tennessee's report plus Texas's equivalent for your foreign registration, and pay a Tennessee registered agent roughly $150 per year. That brings ongoing costs of the Tennessee route to roughly $450 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. Tennessee imposes a franchise & excise tax on LLCs: $100 minimum franchise tax plus 6.5% excise tax on net earnings.
When Tennessee Actually Makes Sense
Forming in Tennessee makes sense in a few specific situations: your business genuinely operates in Tennessee, with a real office, employees, or property there, or you're relocating to Tennessee in the near future. For a typical small business based in Texas, none of these usually apply. Registering a Tennessee LLC to do business back home means $750 in Texas foreign-registration fees, on top of Tennessee's $300 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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