LLC and Franchise Tax

If your SMLLC is organized in Texas but doesn't operate in Texas, is it still obligated to pay franchise tax?

Answer

Unfortunately, yes. Failure to pay the franchise tax will result in your LLC being administratively dissolved.

For more information on the Texas Franchise Tax, take a look at this FAQ.

One question, however: why are you forming your single member limited liability company in Texas if you do not live/operate your business in Texas?

Generally, you should form your LLC in the same state in which the company operates. There are exceptions to this rule, however, you should be able to articulate a precise reason why you are doing so.