New Mexico vs Texas LLC: fees, taxes, and which to pick
Data last updated: Apr 21, 2026New Mexico charges $50 to form an LLC; Texas charges $300. Day-one sticker price is only part of the story, since most of the real cost comes from the annual obligations that stack up each year you keep the LLC open.
Over a rolling three-year window, New Mexico runs about $250 less in total state fees than Texas. Whether that gap matters depends on whether you actually operate in one of these states or are weighing a non-resident filing.
On speed, New Mexico typically clears standard online filings faster than Texas. Both states offer expedited tiers at an additional cost for filers on tight timelines.
For most small operators the choice is not really between these two states at all. It is between forming where the business actually operates and trying to route through a non-resident filing. The data below shows what each option actually costs.
Key differences at a glance
- New Mexico costs $250 less to form ($50 vs $300).
- Texas has no state individual income tax; pass-through LLC income flows to members without a state layer. The other state does tax at the member level.
- Texas imposes an entity-level franchise or LLC tax that applies to pass-through LLCs. New Mexico does not.
- New Mexico has no annual report filing at all. Texas requires an annual (or biennial) report every reporting period.
Where each state fits
For most filers, forming in the state you actually operate from is the right call. The side-by-side below shows where the two states meaningfully diverge.
What each state offers that the other does not
Only New Mexico
- No entity-level franchise or LLC tax
- No annual report
Only Texas
- Paid expedited tier
- No state income tax
Both states
- Online filing
- No publication requirement
- Operating agreement not statutorily required
Three-year cost, side by side
Rough estimate of the state-facing cost to form and keep an LLC through three years. Both totals include a $100 per year registered-agent estimate.
Running total includes the one-time filing fee and annual ongoing costs (report fee or franchise tax plus a $100/year registered agent estimate).
What it costs under your specific situation
The table below runs the same LLC through four common scenarios. "Non-resident" rows assume a typical home-state foreign LLC registration adds about $200 per year of stacked cost; the real number depends on which state you live in and ranges from $50 to over $800 depending on jurisdiction.
| Scenario | Year 1 | Each year after | 3-year total |
|---|---|---|---|
| You live in New Mexico, business operates there No foreign LLC registration needed. You pay New Mexico fees only. | $150 | $100 | $350 |
| You live in Texas, business operates there No foreign LLC registration needed. You pay Texas fees only. | $400 | $100 | $600 |
| Non-resident forming in New Mexico with operations elsewhere You pay New Mexico's fees plus a typical home-state foreign LLC registration of about $200 per year. | $350 | $300 | $950 |
| Non-resident forming in Texas with operations elsewhere You pay Texas's fees plus a typical home-state foreign LLC registration of about $200 per year. | $600 | $300 | $1,200 |
New Mexico vs Texas: full comparison
| Dimension | New Mexico | Texas |
|---|---|---|
| Online filing Can you file the formation document online? | Yes | Yes |
| Online approval time Standard, non-expedited | 3 business days | 13 business days |
| Expedited option Paid fast-track filing | Not offered | $25 |
| Annual report Required in addition to tax | None | Required, $0 |
| State-imposed annual tax Franchise, privilege, or LLC tax minimum | None | None |
| State income tax On pass-through LLC income at member level | Yes | No |
| Publication requirement Newspaper publication after formation | No | No |
| Operating agreement Required by state statute | Recommended, not required | Recommended, not required |
| Foreign LLC fee Cost to register as a foreign LLC in this state | $100 | $750 |
| State sales tax General statewide rate | 4.9% | 6.3% |
Taxes in New Mexico and Texas
How each state handles entity-level tax on LLCs. Pass-through classification means member-level income tax also applies at each member's residence state.
New Mexico tax
No entity-level franchise tax on LLCs. State income tax applies to member-level pass-through income. Corporate rate 5.9%.
Texas tax
No entity-level franchise tax on LLCs. No state income tax.
Ongoing compliance
The recurring filings each state requires after formation.
New Mexico
No annual state filing. Registered agent required in New Mexico.
Texas
Annual report $0, due 05/15 each year. Registered agent required in Texas.
Formation process, side by side
What actually happens from the moment you start filing to the moment you're in good standing. Use this as a checklist.
New Mexico
- Check business-name availability on the New Mexico entity search.
- Appoint a registered agent with a physical New Mexico street address.
- File Articles of Organization for a Domestic Limited Liability Company for $50.
- Wait for approval. Online typically 3 business days. No paid expedite offered.
- Adopt an operating agreement (recommended, not required by New Mexico statute).
- Apply for a federal EIN (free from the IRS).
- Open a business bank account to separate personal and business finances.
- No annual state filing required in New Mexico.
Texas
- Check business-name availability on the Texas entity search.
- Appoint a registered agent with a physical Texas street address.
- File Certificate of Formation: Limited Liability Company (Form 205) for $300.
- Wait for approval. Online typically 13 business days. Paid expedite from $25.
- Adopt an operating agreement (recommended, not required by Texas statute).
- Apply for a federal EIN (free from the IRS).
- Open a business bank account to separate personal and business finances.
- File your first annual report and pay $0 when it comes due.
Before you pick either state
A few things that apply no matter which state you choose. These trip up enough first-time filers that they're worth stating explicitly.
Registered agent is non-negotiable. Both New Mexico and Texas (and every other US state) require every LLC to designate a registered agent with a physical street address in the state of formation. You can serve as your own agent if you live in the state; otherwise a commercial agent runs $50 to $125 per year. Using your own home address makes it part of the public record.
Forming elsewhere does not escape your home state's tax. If you live and operate a business from your home state, forming the LLC in New Mexico or Texas does not avoid your home state's income tax. The moment you transact business at home, your home state requires a foreign LLC registration, and state tax liability follows your residence regardless of where the entity sits on paper.
EIN applications are free. The IRS issues Employer Identification Numbers directly at no cost. Any service charging you to "get your EIN" is reselling a free form submission. Single-member LLCs with no employees technically don't need one for federal tax, but nearly every bank requires an EIN to open a business account.
Operating agreement matters more than the state you pick. A well-drafted operating agreement governs member ownership, management, profit splits, buy-sell terms, and dissolution. Without one, your LLC runs on the state's default rules, which are rarely what you want. California, Maine, Missouri, and New York require a written one by statute; every other state treats it as strongly recommended.
Agency contacts
New Mexico Secretary of State - Business Services Division
- Website
- www.sos.nm.gov/business-services
- Phone
- (505) 827-3600
- Business.Services@sos.nm.gov
- New Mexico Capitol Annex North, 325 Don Gaspar, Suite 300, Santa Fe, NM 87501
- Hours
- 8:00 AM to 5:00 PM Mountain, Monday to Friday (walk-in Business Services closed Fridays; phone and online available)
Texas Secretary of State, Business & Commercial Section
- Website
- www.sos.state.tx.us/corp/index.shtml
- Phone
- (512) 463-5555
- corpinfo@sos.texas.gov
- P.O. Box 13697, Austin, TX 78711-3697
- Office
- James Earl Rudder Office Building, 1019 Brazos Street, Austin, TX 78701
- Hours
- 8:00 AM to 5:00 PM Central, Monday to Friday
New Mexico Taxation and Revenue Department
- Website
- www.tax.newmexico.gov
- Phone
- (866) 285-2996
- New Mexico Taxation and Revenue Department, P.O. Box 630, Santa Fe, NM 87504-0630
- Office
- 1200 South St. Francis Drive, Santa Fe, NM 87504
- Hours
- 8:00 AM to 5:00 PM Mountain, Monday to Friday
Texas Comptroller of Public Accounts
- Website
- comptroller.texas.gov
- Phone
- (800) 252-1381
- P.O. Box 13528, Capitol Station, Austin, TX 78711-3528
- Office
- Lyndon B. Johnson State Office Building, 111 East 17th Street, Austin, TX 78774
- Hours
- 8:00 AM to 5:00 PM Central, Monday to Friday
Frequently Asked Questions
-
Is it cheaper to form an LLC in New Mexico or Texas?
New Mexico is cheaper at formation ($50) than Texas ($300). Ongoing costs are also different: $100 vs $100 per year. Total over three years: $350 vs $600.
-
Can I form an LLC in New Mexico if I live in Texas?
Yes, but your Texas business will almost certainly need to register as a foreign LLC in Texas too, which means paying Texas's foreign registration fee and any ongoing Texas obligations on top of the New Mexico ones. The "form elsewhere to save" math usually doesn't work for operating businesses; it only works when you have no physical operations tied to any specific state.
-
How long does it take to form an LLC in New Mexico vs Texas?
New Mexico online: 3 business days; Texas online: 13 business days. New Mexico does not offer paid expedite. Texas offers paid expedite from $25.
-
Which state has lower taxes for an LLC, New Mexico or Texas?
New Mexico: state income tax applies to member-level pass-through income, no entity-level franchise or LLC tax. Texas: no state income tax, no entity-level franchise or LLC tax.
-
Do both states require a registered agent?
Yes. Every US state (and DC) requires every LLC to maintain a registered agent with a physical street address in the state. New Mexico and Texas both have this requirement. You can serve as your own agent if you live in the state; most out-of-state filers use a commercial agent for $50 to $125 per year.
-
Which state should I pick if I run an online business from home?
Form in the state you actually live in. Your home state's Department of Revenue treats your residence as nexus regardless of where the LLC is filed, which means you owe state income tax there anyway. Forming in New Mexico or Texas to escape your home state's tax doesn't work; it adds paperwork. The non-resident filings make sense when you genuinely operate nowhere in particular: international founders, purely passive holding entities, or real-estate LLCs owning property in other states.
Full state guides
More New Mexico and Texas comparisons
More New Mexico vs ...
Sources
- Filing fee: law.justia.com/codes/new-mexico/chapter-53/article-19/section-53-19-63… · verified April 21, 2026
NMSA 1978 Section 53-19-63 (Filing, service and copying fees) sets the fee for filing original articles of organization and issuing a certificate of organization at fifty dollars ($50.00). Also referenced in 12.3.4.11 NMAC (Domestic Limited Liability Companies), which directs domestic LLCs to pay applicable fees required in Section 53-19-63. - Foreign LLC registration fee: law.justia.com/codes/new-mexico/chapter-53/article-19/section-53-19-63… · verified April 21, 2026
NMSA 1978 Section 53-19-63 sets the fee for issuing a certificate of registration to a foreign limited liability company at one hundred dollars ($100.00). Foreign LLCs must obtain a certificate of registration under NMSA 1978 Section 53-19-48 before transacting business in New Mexico. - Online filing portal: www.sos.nm.gov/business-services/ · verified April 21, 2026
All New Mexico business filings moved to online-only as of December 9, 2024. The Secretary of State no longer accepts paper filings for any business application. All LLC Articles of Organization must be filed through the SOS Enterprise portal at enterprise.sos.nm.gov. Typical processing time for online filings is 1-3 business days. - Operating agreement requirement: nmonesource.com/nmos/nmsa/en/item/4400/index.do · verified April 21, 2026
NMSA 1978 Chapter 53, Article 19 (the New Mexico Limited Liability Company Act) permits but does not require an LLC to adopt an operating agreement. Section 53-19-19 contemplates operating agreements that may be oral or written. No statutory requirement to adopt or file one exists. - Annual report: www.sos.nm.gov/business-services/ · verified April 21, 2026
The New Mexico LLC Act imposes no annual or biennial report requirement, and the Secretary of State's Business Services fee list contains no annual report line item for LLCs. This absence of annual filing is a long-standing feature of the New Mexico LLC Act and one of the main reasons anonymous-LLC strategies favor New Mexico. - Franchise tax: www.tax.newmexico.gov/businesses/corporate-income-franchise-tax-overvi… · verified April 21, 2026
New Mexico's $50 Corporate Franchise Tax applies to entities taxed as corporations for federal purposes, including LLCs that have elected C-corp or S-corp treatment. LLCs that default to pass-through partnership or disregarded-entity treatment do not owe the $50 franchise tax and file no corporate-level franchise return in New Mexico. For default-tax-classification LLCs (the overwhelming majority), no state-level franchise tax applies. - Corporate income tax rate: www.tax.newmexico.gov/all-nm-taxes/current-historic-tax-rates-overview… · verified April 21, 2026
Effective for tax year 2025 and later, New Mexico replaced its two-bracket corporate income tax (4.8% on the first $500,000 and 5.9% above) with a single flat rate of 5.9% on all corporate taxable income. Confirmed by the Tax Foundation 2026 State Tax Competitiveness Index (Oct 2025) and the NM Taxation and Revenue Department. LLCs pay this rate only if they elect C-corp federal taxation; default pass-through LLCs do not. - Sales tax rate: www.tax.newmexico.gov/businesses/gross-receipts-overview/ · verified April 21, 2026
New Mexico's Gross Receipts Tax (GRT) functions as the state's sales tax. Effective July 1, 2025 the statewide GRT rate is 4.875%. The GRT is imposed on the seller's receipts rather than the buyer's purchase, so it applies more broadly than a typical sales tax (including to many services and business-to-business transactions). Counties and municipalities add layered local GRT rates, resulting in combined rates that typically range from 6.5% to 9%. Only the statewide 4.875% rate is recorded here. - Business name search: enterprise.sos.nm.gov/search · verified April 21, 2026
Current New Mexico Secretary of State business entity search, hosted on the SOS Enterprise portal. The legacy portal.sos.state.nm.us URL used in prior agency seed data no longer resolves after the December 2024 migration to enterprise.sos.nm.gov. - Filing fee: www.sos.state.tx.us/corp/forms/205_boc.pdf · verified April 21, 2026
Texas Secretary of State Form 205 Certificate of Formation for an LLC. $300 filing fee stated on form instructions. Authority: Texas Business Organizations Code §4.152 (formation fees). - Filing fee: www.sos.state.tx.us/corp/sosda/index.shtml · verified April 21, 2026
SOSDirect service charges a 2.7% convenience fee on credit-card transactions on top of the $300 state fee. The stated filingFee of $300 is the statutory fee exclusive of the payment-processing surcharge. - Expedited filing: www.sos.state.tx.us/corp/options.shtml · verified April 21, 2026
Texas Secretary of State expedite service: $25 per document for expedited processing (typically 2 business days). Applies to paper filings mailed or delivered to the SoS. SOSDirect online filings are normally processed within a few business days without a separate expedite fee. - Annual report fee: comptroller.texas.gov/taxes/franchise/ · verified April 21, 2026
Texas LLCs file an annual Franchise Tax Report and Public Information Report with the Comptroller by May 15. No separate filing fee for the PIR. Under SB 3 (88th Leg., 2nd C.S., effective for reports due in 2024 and later), entities with total revenue at or below the no-tax-due threshold no longer file a No Tax Due Report but still file the PIR. - Franchise tax: comptroller.texas.gov/taxes/franchise/ · verified April 21, 2026
Texas Tax Code Chapter 171 (Franchise Tax). No-tax-due threshold raised to $2.47 million for reports due 2024 forward (SB 3, 2023). Rates: 0.375% retail/wholesale margin; 0.75% other. EZ computation 0.331% on revenue up to $20M (no deductions). Confirm current threshold on Comptroller site each year. - Operating agreement requirement: statutes.capitol.texas.gov/Docs/BO/htm/BO.101.htm · verified April 21, 2026
Texas Business Organizations Code §101.052 authorizes a company agreement (Texas's term for an operating agreement). Not required to be in writing or filed; LLC may operate under default statutory rules. - Foreign LLC registration fee: www.sos.state.tx.us/corp/forms/304_boc.pdf · verified April 21, 2026
Texas Secretary of State Form 304 Application for Registration of a Foreign LLC. Filing fee $750. Authority: TBOC §9.001. - Publication requirement: statutes.capitol.texas.gov/Docs/BO/htm/BO.3.htm · verified April 21, 2026
Texas does not require newspaper publication for LLC formation. TBOC Chapter 3 governs formation filings without any publication requirement. - Business name search: mycpa.cpa.state.tx.us/coa/ · verified April 21, 2026
Texas Comptroller Taxable Entity Search (the broadly-used search for Texas business entities). SOSDirect also offers a paid name search for $1 per request. - Sales tax rate: comptroller.texas.gov/taxes/sales/ · verified April 21, 2026
Texas statewide sales and use tax rate is 6.25%. Local jurisdictions may add up to 2% for a maximum combined rate of 8.25%.