New York vs Texas for LLC

Quick Answer

Texas generally offers better value for most LLC owners due to no state income tax, no annual fees for smaller businesses, and no publication requirement. However, New York may be preferable if you’re already based there or need access to its financial markets, despite higher formation costs and the expensive publication requirement.

Side-by-Side Comparison

Factor	New York	Texas
Formation Fee	$200	$300
Annual Fee	$9 (biennial statement)	$0 (unless revenue > $2.47M)
Processing Time	7-10 business days (24 hours expedited +$25)	5-7 business days (2-3 days expedited)
Publication Required	Yes ($200-$2,000+)	No
State Income Tax	Yes (4-10.9%)	No
Franchise Tax	No	Yes (only if revenue > $2.47M)
Registered Agent Required	Yes	Yes
Operating Agreement Required	Yes	No (but recommended)

Data as of April 13, 2026

Formation Costs

New York LLC Formation Costs:

• State filing fee: $200
• Expedited processing: $25 (optional, reduces time to 24 hours)
• Publication requirement: $200-$2,000+ depending on county
• Total estimated cost: $400-$2,225+

Texas LLC Formation Costs:

• State filing fee: $300
• Expedited processing: Available for 2-3 day processing
• No publication requirement
• Total estimated cost: $300

The publication requirement makes New York significantly more expensive upfront. New York LLCs must publish their formation in two newspapers for six consecutive weeks, with costs varying dramatically by county. Manhattan and other expensive counties can cost $2,000 or more, while rural counties may cost around $200.

Texas keeps it simple with a single $300 filing fee and no additional mandatory costs, making it $100-$1,925+ cheaper to form an LLC compared to New York.

Ongoing Costs

New York Annual Requirements:

• Biennial statement fee: $9 (due every two years)
• No franchise tax for LLCs
• Annual cost: $4.50 per year average

Texas Annual Requirements:

• No annual report fee for LLCs
• Franchise tax: $0 if annual revenue is under $2.47 million
• Franchise tax rate: 0.375% on gross receipts minus certain deductions (if over threshold)
• Annual cost: $0 for most small businesses

Texas wins decisively on ongoing costs. Most small to medium-sized LLCs pay nothing annually in Texas, while New York charges a modest $9 every two years. However, larger Texas businesses (over $2.47 million in revenue) face franchise tax obligations that can be substantial.

Tax Comparison

New York Taxes:

• State income tax: 4-10.9% on business income
• Sales tax: 4% base rate (local taxes additional)
• No franchise tax for LLCs

Texas Taxes:

• State income tax: None
• Sales tax: 6.25% base rate (local taxes additional)
• Franchise tax: 0.375% on gross receipts (only if revenue exceeds $2.47 million annually)

The tax advantage heavily favors Texas for most businesses. New York’s state income tax of up to 10.9% can significantly impact profitability, especially for pass-through entities like LLCs where business income flows to personal tax returns. Texas business owners save thousands to tens of thousands annually by avoiding state income tax.

The franchise tax threshold of $2.47 million in Texas means most small businesses operate tax-free at the state level, while New York taxes business income from dollar one.

Privacy Protections

Both states require similar disclosure levels for LLC formation:

New York Privacy:

• Must list organizer name and address on Articles of Organization
• Annual biennial statements require member/manager information
• Records maintained by Department of State are public

Texas Privacy:

• Must list organizer name and address on Certificate of Formation
• No ongoing member disclosure requirements for franchise tax filings under the threshold
• Records maintained by Secretary of State are public

Neither state offers exceptional privacy protections compared to states like Delaware or Nevada. Both require public disclosure of formation details, though Texas has slightly less ongoing disclosure requirements for smaller LLCs.

Legal Protections

New York Legal Framework:

• Established LLC law with extensive case precedents
• Strong charging order protections
• Courts experienced with business disputes
• Access to sophisticated legal and financial services

Texas Legal Framework:

• Modern LLC statute with favorable provisions
• Strong asset protection laws
• Business-friendly court system
• Large legal market with competitive rates

Both states offer solid legal protections for LLC members. New York benefits from its position as a financial center with extensive legal precedents, while Texas offers a more business-friendly regulatory environment with modern statutes designed to attract businesses.

Which State Should You Choose?

Choose Texas if:

• Your business operates primarily outside New York
• You want to minimize taxes and ongoing costs
• You prefer simpler compliance requirements
• Your revenue is under $2.47 million annually
• You value the business-friendly regulatory environment

Choose New York if:

• Your business is physically located in New York
• You need access to New York’s financial markets and networks
• You’re willing to pay higher costs for the prestige and business opportunities
• You can afford the publication requirement and ongoing tax burden

Revenue Considerations:

• Under $100K annually: Texas saves $4,000-$10,000+ in taxes
• $100K-$500K annually: Texas saves $4,000-$50,000+ in taxes
• Over $2.47M annually: Compare Texas franchise tax vs. New York income tax on a case-by-case basis

For most entrepreneurs, Texas offers compelling financial advantages that outweigh New York’s benefits unless you have specific reasons to be in New York.

Related Guides

• New York vs Texas for Corporation: 2026 Cost Comparison
• California vs New York for LLC: 2026 Cost & Speed Comparison
• Florida vs New York for LLC: 2026 Tax & Cost Comparison
• Nevada vs New York LLC: Which State is Better in 2026?
• New York vs California for LLC: 2026 Cost & Tax Comparison

FAQ

Which state is cheaper to form an LLC?

Texas has a higher formation fee ($300 vs $200), but New York’s mandatory publication requirement adds $200-$2,000+ to the total cost. Overall, Texas is typically $100-$1,925+ cheaper to form an LLC.

Do I have to pay annual fees in both states?

New York charges $9 every two years for a biennial statement. Texas charges no annual fees unless your LLC generates over $2.47 million in revenue, at which point franchise tax applies.

Which state has better tax advantages?

Texas has significant tax advantages with no state income tax, while New York taxes business income at rates up to 10.9%. For most LLCs, Texas saves thousands to tens of thousands in annual taxes.

Can I form an LLC in Texas if I live in New York?

Yes, you can form an LLC in any state regardless of where you live. However, you may need to register as a foreign LLC in New York if you conduct business there, which adds complexity and costs.

What is New York’s publication requirement?

New York LLCs must publish their formation notice in two newspapers for six consecutive weeks. Costs vary by county from around $200 in rural areas to $2,000+ in expensive markets like Manhattan.

Which state processes LLC formations faster?

Both states offer similar processing times. New York takes 7-10 business days standard (24 hours expedited for $25), while Texas takes 5-7 business days (2-3 days expedited). Texas has a slight edge in standard processing speed.

Do both states require a registered agent?

Yes, both New York and Texas require LLCs to maintain a registered agent with a physical address in the state of formation. This can be yourself if you have an address in the state, or you can hire a registered agent service.

Is an operating agreement required in both states?

New York requires LLCs to have an operating agreement, while Texas does not mandate one (though it’s highly recommended). Both states benefit from having a comprehensive operating agreement regardless of legal requirements.

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This article provides general information for educational purposes only. Consult with an attorney or accountant for advice specific to your business situation. Data current as of April 13, 2026.