New York vs Texas: Side-by-Side Comparison
Here's a comprehensive comparison of the two states across all key factors for non-resident LLC formation:
| Feature | New York | Texas |
|---|---|---|
| Income Tax | 4%–10.9% | None |
| Corporate Tax | 6.5%–7.25% | None (margin tax >$2.47M) |
| Sales Tax | 4% (+ local) | 6.25% |
| Annual Fee | $9 biennial | $0 (most LLCs) |
| Formation Fee | $200 + $1K–2K publication | $300 |
| Privacy | Publication reveals entity | Member names public |
| Court System | Strong commercial courts | Standard state courts |
| Asset Protection | Moderate | Moderate |
| Best For | Finance, media, NYC-based operations | Low-cost US operations, tech (Austin) |
Tax Comparison
New York Taxes
- Personal Income Tax: 4%–10.9%
- Corporate Tax: 6.5%–7.25%
- Sales Tax: 4% (+ local)
Texas Taxes
- Personal Income Tax: None
- Corporate Tax: None (margin tax >$2.47M)
- Sales Tax: 6.25%
For non-resident entrepreneurs with single-member LLCs treated as disregarded entities, state income tax typically only applies if you have income sourced within that state. If you have no in-state operations, employees, or customers, state income tax may not apply regardless of which state you form in.
Formation & Annual Costs
| Cost | New York | Texas |
|---|---|---|
| Formation Fee | $200 + $1K–2K publication | $300 |
| Annual Fee | $9 biennial | $0 (most LLCs) |
| Registered Agent (est.) | $100–$300/year | $100–$300/year |
| Estimated Year 1 Total | $20171 (with RA) | $450 (with RA) |
Privacy & Asset Protection
New York
- Privacy: Publication reveals entity
- Asset Protection: Moderate
- Court System: Strong commercial courts
Texas
- Privacy: Member names public
- Asset Protection: Moderate
- Court System: Standard state courts
The Verdict: New York or Texas?
Texas has zero income tax, zero annual fees, and no publication requirement. New York has high income tax (up to 10.9%), expensive publication requirement ($1K–2K), and NYC adds local taxes. Texas is dramatically cheaper for non-residents. New York only makes sense if you specifically need a NYC presence for your industry (finance, media, fashion). The ongoing cost difference can be thousands of dollars per year.
Our Recommendation
Texas for virtually all non-resident entrepreneurs
Remember that regardless of which state you form your LLC in, your federal tax obligations remain the same. All foreign-owned single-member LLCs must file Form 5472 and a pro forma Form 1120 annually, with a $25,000 penalty for non-compliance.
Need Help Choosing the Right State?
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