Wyoming 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 | Wyoming | Texas |
|---|---|---|
| Income Tax | None | None |
| Corporate Tax | None | None (margin tax >$2.47M) |
| Sales Tax | 4% | 6.25% |
| Annual Fee | $60 | $0 (most LLCs) |
| Formation Fee | $100 | $300 |
| Privacy | No member/manager disclosure | Manager/member names public |
| Court System | Standard state courts | Standard state courts |
| Asset Protection | Strongest | Moderate |
| Best For | Non-resident LLCs, asset protection | US-operating businesses, large enterprises |
Tax Comparison
Wyoming Taxes
- Personal Income Tax: None
- Corporate Tax: None
- Sales Tax: 4%
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 | Wyoming | Texas |
|---|---|---|
| Formation Fee | $100 | $300 |
| Annual Fee | $60 | $0 (most LLCs) |
| Registered Agent (est.) | $100–$300/year | $100–$300/year |
| Estimated Year 1 Total | $310 (with RA) | $450 (with RA) |
Privacy & Asset Protection
Wyoming
- Privacy: No member/manager disclosure
- Asset Protection: Strongest
- Court System: Standard state courts
Texas
- Privacy: Manager/member names public
- Asset Protection: Moderate
- Court System: Standard state courts
The Verdict: Wyoming or Texas?
Both have no income tax and no corporate tax. Texas has zero annual fees for most LLCs but a $300 formation fee and less privacy (member names are public). Wyoming has a $60 annual fee but better privacy and the strongest LLC protections. For non-residents who don't operate in Texas, Wyoming is superior. Texas makes sense if you have actual Texas operations.
Our Recommendation
Wyoming for non-residents; Texas for businesses with Texas operations
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.
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