California vs Texas: $800+ vs $0 and the Migration Math

Cost to form and keep

Before registered-agent fees and before any tax on profit. Operating in a state means paying it no matter where the entity was formed.

California: what else to know

• The $800 is owed every year the entity exists, including an LLC’s first year for 2024+ formations; corporations are exempt in their first year only.
• LLCs add the § 17942 fee on California receipts of $250,000 or more: $900, $2,500, $6,000, or $11,790.
• C-corps pay 8.84% of California net income when that exceeds $800; S-corps pay 1.5%.
• Out-of-state entities doing business here pay the same amounts after registering ($70 LLC, $100 corporation).

Full rules: Start a California LLC.

Texas: what else to know

• No franchise tax at or below $2.65M of annualized revenue (2026–2027 reports), but the Public Information Report is still due every May 15.
• Above the threshold: 0.75% of margin (0.375% retail/wholesale) or 0.331% of revenue on the EZ Computation.
• Out-of-state entities registering in Texas pay a $750 registration fee.

Full rules: Texas no-tax-due & PIR.

Verdict

Pure relocation with no CA footprint: Texas costs far less. Keeping CA staff or customers: you pay both, so model the dual cost first.

Test where you actually owe tax with the nexus checker before choosing a home state.