Texas vs Florida: Side-by-Side Comparison
Here's a comprehensive comparison of the two states across all key factors for non-resident LLC formation:
| Feature | Texas | Florida |
|---|---|---|
| Income Tax | None | None |
| Corporate Tax | None (margin tax >$2.47M) | 5.5% |
| Sales Tax | 6.25% | 6% |
| Annual Fee | $0 (most LLCs) | $138.75 |
| Formation Fee | $300 | $125 |
| Privacy | Member names public | Member names public |
| Court System | Standard state courts | Standard state courts |
| Asset Protection | Moderate | Strong |
| Best For | US operations, no annual cost entities | US-based entrepreneurs, Latin American market |
Tax Comparison
Texas Taxes
- Personal Income Tax: None
- Corporate Tax: None (margin tax >$2.47M)
- Sales Tax: 6.25%
Florida Taxes
- Personal Income Tax: None
- Corporate Tax: 5.5%
- Sales Tax: 6%
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 | Texas | Florida |
|---|---|---|
| Formation Fee | $300 | $125 |
| Annual Fee | $0 (most LLCs) | $138.75 |
| Registered Agent (est.) | $100–$300/year | $100–$300/year |
| Estimated Year 1 Total | $450 (with RA) | $14150 (with RA) |
Privacy & Asset Protection
Texas
- Privacy: Member names public
- Asset Protection: Moderate
- Court System: Standard state courts
Florida
- Privacy: Member names public
- Asset Protection: Strong
- Court System: Standard state courts
The Verdict: Texas or Florida?
Both are no-income-tax states with large economies. Texas has no annual fees for most LLCs and no corporate tax, making it cheaper for ongoing operations. Florida has lower formation costs ($125 vs $300) but an annual report fee ($138.75) and corporate income tax (5.5%). Texas is better for pure cost savings. Florida is better for physical location, Latin American market access, and lifestyle. Both require member names in public records.
Our Recommendation
Texas for lowest ongoing costs; Florida for lifestyle and location
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?
Our experts can help you determine the best state for your LLC based on your specific situation, business type, and goals.
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