Texas vs Georgia LLC Comparison (2026)
Texas vs Georgia LLC Formation: Costs, Taxes & Compliance 2026
Introduction: Quick Verdict and Key Differentiator
Texas wins on formation cost and tax structure; Georgia wins on ongoing compliance simplicity.
Texas charges $300 to file your LLC's Certificate of Formation (Tex. Bus. Org. Code § 3.005), while Georgia charges $110 for Articles of Organization (O.C.G.A. § 14-11-204). However, Texas has no state income tax—you pay only a 0.75% franchise tax on taxable margin if revenue exceeds $2,650,000 (Tex. Tax Code Ch. 171). Georgia imposes a flat 5.19% state income tax on all LLC pass-through income (O.C.G.A. Title 48, Chapter 7), making it significantly more expensive long-term for profitable businesses. Texas's annual reporting is free; Georgia charges $60 annually. For cost-conscious founders prioritizing tax efficiency, Texas dominates. For those prioritizing low upfront filing fees, Georgia edges ahead—but the income tax burden reverses that advantage immediately upon profitability.
| Metric | Texas | Georgia |
|---|---|---|
| LLC Formation Fee | $300.00 (Tex. Bus. Org. Code § 3.005) | $110.00 (O.C.G.A. § 14-11-204) |
| State Income Tax | 0% (no income tax) | 5.19% flat rate (O.C.G.A. Title 48, Ch. 7) |
| Franchise Tax | 0.75% of taxable margin; $0 if revenue ≤ $2,650,000 (Tex. Tax Code Ch. 171) | None |
| Annual Report Fee | $0.00 | $60.00 (O.C.G.A. § 14-11-603) |
| Annual Report Due Date | May 15 (Tex. Tax Code § 171.0601) | January 1–April 1 (O.C.G.A. § 14-11-603) |
| Registered Agent Change Fee | $15.00 (Tex. Bus. Org. Code § 5.201) | $30.00 (O.C.G.A. § 14-11-209) |
| Name Reservation Fee | $40.00 | $35.00 |
| Name Reservation Duration | 120 days | 30 days |
Texas wins overall. You save $190 on formation, but Texas's zero income tax and franchise-tax exemption for businesses under $2.65M in revenue create massive long-term savings. A Georgia LLC earning $500,000 annually pays $25,950 in state income tax (5.19% × $500,000); a Texas LLC pays $0 in income tax and likely $0 in franchise tax (revenue under threshold). Even accounting for Georgia's $60 annual report fee versus Texas's $0, Texas's tax structure dominates for any profitable operation.
FAQ: Three Essential Questions for Texas vs Georgia LLC
1. Which state costs less to form and maintain annually?
Georgia offers significantly lower formation costs. You'll pay $110 to file Articles of Organization in Georgia versus $300 in Texas (Tex. Bus. Org. Code § 3.005; O.C.G.A. § 14-11-204). However, Texas's annual compliance is cheaper if your revenue stays under $2,650,000, since you pay $0 for the Public Information Report. Georgia charges $60 annually for Annual Registration (O.C.G.A. § 14-11-603). Over five years, Texas saves you $300 in annual fees if you qualify for the franchise tax exemption.
| Cost Category | Texas | Georgia | Winner |
|---|---|---|---|
| Formation Filing | $300 | $110 | Georgia (saves $190) |
| Name Reservation | $40 | $35 | Georgia (saves $5) |
| Annual Compliance Fee | $0 (if revenue ≤ $2.65M) | $60 | Texas (if under threshold) |
| Registered Agent Change | $15 | $30 | Texas (saves $15) |
| 5-Year Total (under revenue threshold) | $340 | $410 | Texas (saves $70) |
Winner: Texas — but only if your annualized revenue stays at or below $2,650,000 (the 2026 franchise tax exemption threshold). If you exceed that, Georgia becomes cheaper because Texas imposes 0.75% franchise tax on taxable margin while Georgia has no franchise tax (Tex. Tax Code Ch. 171; O.C.G.A. Title 48, Chapter 7).
2. What's the real tax difference between these states?
Texas has no state income tax but charges franchise tax on revenue above $2,650,000. Georgia imposes a flat 5.19% state income tax on all LLC pass-through income but no franchise tax. For a single-member LLC taxed as a disregarded entity, you report income on Schedule C either way. The critical difference: Texas franchise tax applies only to business revenue, while Georgia income tax applies to your personal share of LLC profits.
| Tax Type | Texas | Georgia | Impact |
|---|---|---|---|
| State Income Tax | $0 | 5.19% flat rate (O.C.G.A. Title 48, Ch. 7) | Georgia costs more |
| Franchise Tax | 0.75% standard or 0.375% retail/wholesale on taxable margin; $0 if revenue ≤ $2.65M (Tex. Tax Code Ch. 171) | $0 | Texas costs more above threshold |
| Sales Tax | 6.25% state + up to 2% local (max 8.25%) | 4% state + local varies | Texas higher |
| Self-Employment Tax | Yes (federal only) | Yes (federal only) | Equal |
Winner: Texas — if your LLC generates less than $2,650,000 in annual revenue. You pay zero franchise tax and zero state income tax. Winner: Georgia — if your LLC generates significant profits that exceed the Texas franchise tax threshold and you want to avoid the 5.19% income tax. Run the math: Does 0.75% of your taxable margin exceed 5.19% of your net income? For most service businesses, Texas wins. For high-margin retail, Georgia may win (Tex. Tax Code Ch. 171; O.C.G.A. Title 48, Chapter 7).
3. Which state has faster formation and easier compliance?
Georgia processes online LLC filings in about 7 business days for $110, while Texas takes 5–7 business days for $300. Both allow online filing and single-member LLCs. Georgia's annual deadline (January 1 to April 1) gives you a 3-month window; Texas's deadline (May 15) is fixed. If you miss Georgia's deadline, you face a $25 penalty and potential administrative dissolution after 60 days. If you miss Texas's deadline, you pay a $50 penalty and risk forfeiture after 30 days.
| Compliance Factor | Texas | Georgia | Winner |
|---|---|---|---|
| Standard Processing Time | 5–7 business days (online) | ~7 business days (online) | Tie |
| Formation Cost | $300 | $110 | Georgia |
| Annual Filing Deadline | May 15 (fixed) | Jan 1–Apr 1 (3-month window) | Georgia |
| Late Penalty | $50 per report | $25 per report | Georgia |
| Grace Period Before Dissolution | 0 days (forfeiture risk after 30 days) | 60 days after notice | Georgia |
| Reinstatement Fee | $75 | $260 + delinquent fees | Texas |
Winner: Georgia — for compliance flexibility. You get a 3-month filing window instead of a single deadline, a lower late penalty ($25 vs. $50), and a 60-day grace period before administrative dissolution. If you do miss the deadline, Georgia's reinstatement process is more predictable: you pay $260 plus delinquent fees, not a variable amount. However, Texas wins on formation cost if you need to form quickly and don't mind paying $300 upfront (Tex. Bus. Org. Code § 3.005; O.C.G.A. § 14-11-603).
Master Comparison Table: All Dimensions — Texas vs Georgia LLC
Formation Filing Fees
Texas charges $300 to file your Certificate of Formation, while Georgia charges $110 for Articles of Organization. Texas's fee is 173% higher. Both states process online filings within 7–15 business days at standard rates. If you need faster processing, Texas offers next-day service for $500 or same-day for $750, while Georgia charges $120 for two-business-day service or $275 for same-business-day processing.
| Dimension | Texas | Georgia | Winner |
|---|---|---|---|
| Standard Filing Fee | $300.00 (Tex. Bus. Org. Code § 101.051) | $110.00 (O.C.G.A. § 14-11-204) | Georgia |
| Expedited Fee (2-day) | $50.00 | $120.00 | Texas |
| Expedited Fee (Same-day) | $750.00 | $275.00 | Georgia |
| Standard Processing Time | 5–7 business days (online) | ~7 business days (online) | Tie |
| Online Filing Available | Yes | Yes | Tie |
Winner: Georgia. Georgia's base filing fee ($110) undercuts Texas ($300) by $190, making