Texas LLC vs Tennessee LLC (2026)
Written for owners based in Texas.
Verdict: for most owners, form where the business is based
Texas is the cheaper state on both counts here, which is not the usual pattern: $300 for year one against Tennessee's $700, and $400 a year in recurring charges Texas does not levy. Tennessee's Annual Report alone starts at $300, which is $50 per member subject to a $300 floor and a $3,000 ceiling, so a seven-member LLC pays $350. Its Franchise and Excise Tax carries a $100 minimum. Texas charges no filing fee for the Public Information Report, with franchise tax owed above the threshold. Tennessee has to be where you operate.
Based in Tennessee? Read Tennessee LLC vs Texas LLC →
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: September 23, 2026
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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. Owner privacy options for either state: Texas anonymous LLC guide and Tennessee anonymous LLC guide.
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
A figure shown as "from" is the least the state can charge, not a price. Tennessee's report is $300 for up to six members and $50 for each member above six, its franchise tax is the greater of $100 or 0.25% of Tennessee net worth, Wyoming's report is the greater of $60 or $.0002 per dollar of in-state assets, Kentucky's entity tax is $175 up to $3 million of gross receipts and graduated above it, and New York's annual filing fee is graduated on New York source gross income. A total that contains one of those is shown as "from" for the same reason. 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 the state publishes a rate for it, and any one-time registration charge a state requires before the LLC may trade. Two exclusions follow from that wording. Arizona and Nebraska require publication and publish no rate, so no newspaper cost is carried for either and their totals are not the whole cost. Alaska's $50 annual state business licence is a separate charge from the Secretary of State fees and is not carried here either. 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. 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 at least $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 least $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 (at least $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. Counting report fees, the agent and any entity-level tax, that brings the Tennessee route to roughly $550 a year, versus about $0 to keep a domestic Texas LLC in good standing. The taxes inside those totals: 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 minimum 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.
Frequently Asked Questions
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Sources
Each entry below is a document recorded in our verified sources, and each entry says what the document is. Some statutory text is read from an accurate mirror rather than from the state's own host, and those say so.
- sos.state.tx.us/corp/index.shtmlTexas Secretary of State: business entity filings
- direct.sos.state.tx.us/help/help-corp.asp?pg=feeTexas LLC filing fees
- sos.tn.gov/businessesTennessee Secretary of State: business entity filings
- sos.tn.gov/businesses/services/business-forms-feesTennessee LLC filing fees
Edmond Hui · Founder, MyStateLLC
Edmond Hui is a software engineer and serial entrepreneur based in New York who has founded multiple online businesses across e-commerce, media, and information publishing. Before transitioning into tech, he spent years as a commercial real estate professional closing deals totaling over 100,000 square feet, giving him firsthand experience with business formation and entity structuring. He built MyStateLLC to provide the free, state-specific LLC guidance he wished existed when forming his own companies.