Which state is cheaper for an LLC: California or Texas?

Over 5 years, Texas is cheaper with an estimated total cost of $495, compared to $3,525 for California, saving you approximately $3,030.

Can I register in Texas if I live and work in California?

You can form an entity in Texas, but if your principal residence or business operations are in California, statutory nexus rules require you to register as a Foreign LLC in California. In California, the foreign filing fee is $70 plus annual foreign maintenance of $820/year.

2026 Head-to-Head Statutory Comparison

California vs Texas LLC

Texas has no personal state income tax and exempts businesses under $2.47M from franchise taxes. California taxes all income and levies an $800 minimum franchise fee.

5-Year Cost Verdict: Texas saves an estimated $3,030 over 5 years.

California Model →Texas Model →

Direct Side-by-Side Fee Matrix

Statutory 2026 Fee Schedules

Metric	California	Texas
Initial State Filing Fee	$70	$300
Annual Report Fee & Frequency	$20 (biennial)	$0 (none)
Annual Franchise Tax	$800/yr	$0 / None
5-Year Estimated True Cost	$3,525	$495
Public Member Anonymity	Public	Public
Foreign Qualification Fee	$70 upfront ($820/yr)	$750 upfront ($0/yr)

The Reality of Forming Out-of-State

Operating in California with a Texas LLC?

If you live or conduct physical business in California and form in Texas, you must register as a Foreign LLC in California. This means paying Texas's formation fee ($300) PLUS California's foreign filing fee ($70) and two annual registered agent fees.