LLC Cost in Texas – How Much to Pay for an LLC

Perhaps you are hoping to form an LLC in Texas. People assume that starting an LLC is difficult and costly. However, it’s generally not difficult, and the cost would vary across states. We have all the info you need to know about the cost of forming an LLC, particularly the LLC cost in Texas.

Texas LLC Cost of Filing

Here are the costs involved in forming an LLC in Texas.

Cost of Filing Formation Certificates

The Texas Certificate of Formation is responsible for the majority of the cost, which could also vary depending on whether you’re forming a domestic LLC or a foreign LLC. Still, you can file both at the Texas Secretary of State.

Texas Domestic LLC

• Online Filing costs $300.
• Annual Report filing is free
• Name Reservation fee costs $25
• By Mail: Fill out the application form, and send it to Secretary of State P.O. Box 13697 Austin, TX 78711. Costs $300.

Texas Foreign LLC

• Online Filing costs $750.
• Annual Report filing is free
• Name Reservation fee costs $25
• By Mail: Fill out the application form, and send it to Secretary of State P.O. Box 13697 Austin, TX 78711. Costs $750.

Note that filing online is ideal, not only because you need to go to the Secretary of State office, but also it would be faster. You won’t have to wait in a queue in doing so.

Texas LLC Formation Service or Registered Agent Fee

You need a registered agent to form an LLC in Texas, hence, added costs for service fees. Here are three of the best LLC services on our list that will provide you with registered agents to ease your worries.

Business Permits and Licenses

The business licenses depend on your business’s activity and location and are renewed yearly. As such, the cost will vary. Check the Texas Department of Revenue for regulatory boards or agencies requiring licensing.

Taxes Payable to Texas Comptroller sales and Franchise

At the stage of its formation, an LLC has to pay certain taxes to the Federal & State Governments. This article lists all such important taxes that are to be paid by LLCs in Texas. The state taxes are to be paid to the Texas Comptroller sales and franchise. The main state and federal taxes that an LLC has to pay are:

State Income Tax

The state of Texas is among the nine states in the USA, which do not levy any state income tax.

State Sales & Use Tax

If your LLC is a seller of physical goods or a service provider providing services, it has to collect sales & use taxes & then pay them to the Texas Comptroller sales and franchise. The Sales & Use Tax varies in different regions, counties, & cities. The current state sales & use tax rate on LLC in Texas is 6.25%

State Franchise Tax

The state of Texas levies this essential tax on LLC called the State Franchise tax. This tax is for enabling the LLC to be legally valid & to be able to do business in the State. The STate Franchise Tax is also called a transaction tax or a privilege tax.

Federal Self-Employment Tax

Federal Self Employment Tax is to be paid by all the LLC Business members or managers. This kind of tax applies to all the earnings you withdraw from your business.

The Federal self-employment tax rate in Texas is 15.3 percent.

Federal Income Tax

The Federal Income Tax is levied on the Income & the amount of the Federal Income Tax depends upon your earnings, the income tax bracket your LLC falls, the deductions, & the manner/ mode of filing.

You pay Federal Income Tax on all the profits your LLC makes after calculating the deductions & allowances such as Healthcare or Retirement Plans.

Employee & Employer Taxes

An LLC with several employees drawing monthly salaries will have to bear some added Employee-Employer taxes. These tax implications vary, depending on various factors, e.g., the amount, number of employees, etc.

Cost Comparison between states

Texas is surrounded by many states, namely Louisiana, New Mexico, Oklahoma, Arkansas, etc. Each of these states has a different rate of taxes levied on LLCs. Let us take a look at this comparative chart.

States	Filing Fee	Annual/Biennial Fee	Sales Tax
Texas	$300	Free	6.25%
Louisiana	$100	$30	4.45%
New Mexico	$50	Free	5.125%
Oklahoma	$100	$25	4.5%
Arkansas	$50	$150	6.5%

Based on the kind of industry you LLC operated in, your LLC will be liable to some other taxes & duties. For Example, if your LLC is in the sector of import & export, you have to pay the import-export duty. You should consult with a professional to verify the tax rates or business costs of registering an LLC in Texas.

Other Costs

• Texas Name Reservation: $40 for fillings by mail
• Doing Business As (DBA): $25 for online filling or if filing by mail
• Certified Document Copies: $30
• Certified of Good Standing: $15
• Business Domain Name and Website: depend on your preference, but domain name could be as low as $2.99/yr at NameCheap, and web hosting is at least $30/mo at Kinsta.
• Online workspace: at least $4.20/mo for GSuite.
• Business Insurance: would vary depending on insurance type–whether general liability insurance or professional liability insurance–and coverage.
• Dissolution of Texas LLC: $40

F.A.Qs

How Much Does It Cost to Maintain an LLC in Texas

To maintain an LLC in Texas you do not need to pay an annual fee. However, sales & use tax at 6.25%, state franchise tax and federal taxes are levied.

One of the key costs associated with maintaining an LLC in Texas is the initial formation fee. When establishing an LLC, there are fees that must be paid to the state in order to register the business entity. In Texas, the filing fee for forming an LLC is a one-time expense that should be taken into account when starting a new business. This fee can vary depending on the type of LLC being formed and whether the company is being registered online or by mail.

Aside from the initial filing fee, business owners should also be aware of the annual report and franchise tax fees that come with maintaining an LLC in Texas. Each year, LLCs in Texas are required to file an annual report with the state, which includes basic information about the business such as its address and registered agent. There is typically a filing fee associated with this annual report that must be paid to the state.

Additionally, the State of Texas imposes a franchise tax on LLCs, which is based on the LLC’s net taxable margin. This tax is in addition to any federal income taxes that the LLC may owe. Business owners should be aware of this tax and plan accordingly to ensure they meet their tax obligations in a timely manner.

In addition to these state-imposed fees, there are other costs associated with maintaining an LLC in Texas that business owners should consider. For example, business owners may need to budget for attorney fees for legal assistance with drafting and reviewing contracts, resolving disputes, or handling other legal matters related to their LLC.

There are also other expenses associated with running a business in Texas, such as office rent, utilities, insurance, and employee wages. Business owners should consider these costs when creating a budget for their LLC in order to ensure that their business can operate smoothly and efficiently.

Overall, the costs associated with maintaining an LLC in Texas are important to consider for business owners looking to establish and run a successful business entity in the state. By understanding and planning for these costs, business owners can ensure that they are able to effectively manage their finances and meet their legal obligations as an LLC in Texas.

In Conclusion

The cost of Texas is much lower compared to other forms of business. Apart from the state filing fees and annual taxes, you might bear the cost of the registered agent. Compare the price of professional LLC services and choose the most affordable one.