Compare taxes and see how much you save moving from Texas to Florida
Texas and Florida are the two most popular destinations for business owners leaving high-tax states, and they are frequently compared against each other. For pass-through business structures — sole proprietors, single-member LLCs, S-corporations, and partnerships — Texas and Florida are essentially equivalent: both states have no personal income tax, so business owners in both states pay $0 in state income tax on business profits. The meaningful difference is corporate income tax. Texas does not have a corporate income tax. Florida does — at 5.5% on C-corporation net income above $50,000. For a C-corporation with $500,000 in net income: Florida corporate income tax ≈ $24,750 (after the $50K exemption); Texas ≈ $0. For C-corps, Texas wins clearly. Texas does have a franchise tax (0.75% of taxable margin above $2.47M revenue) — but this is a very different calculation from Florida's 5.5% on net income, and most small businesses owe nothing. The choice between Texas and Florida for small businesses ultimately comes down to non-tax factors: industry ecosystem (Texas for energy, tech, logistics; Florida for finance, real estate, tourism), cost of living (Texas generally lower for urban markets), climate (both warm, Florida more humid), and personal preference. On pure tax cost, both states are excellent — but for C-corp structures, Texas has a clear advantage.
No Income Tax, Franchise Tax on Revenue >$2.47M
Zero personal and corporate income tax; franchise tax 0.75% of taxable margin above $2.47M; no minimum entity fees
No Personal Income Tax, 5.5% C-corp
Zero personal income tax; 5.5% corporate income tax on C-corporation net income (first $50K exempt); no franchise tax; no entity revenue fees
At $500,000 net profit income:
For pass-through businesses (sole proprietors, LLCs, S-corps): Texas and Florida are equal — both $0 state income tax. For C-corporations: Texas saves approximately $24,750/year vs Florida at $500K net income (Florida 5.5% after $50K exemption; Texas has no corporate income tax). Texas franchise tax may apply above $2.47M revenue.
| Income | TX Tax | FL Tax | Savings | 10-Year |
|---|---|---|---|---|
| $100,000 net profit (pass-through) | $0 | $0 | Equal for pass-through entities | $0 |
| $100,000 net profit (C-corp) | $0 | $2,750 (5.5% on $50K taxable) | TX saves $2,750/yr for C-corps | $27,500 |
| $300,000 net profit (C-corp) | $0 | $13,750 (5.5% on $250K taxable) | TX saves $13,750/yr for C-corps | $137,500 |
| $500,000 net profit (C-corp) | $0 | $24,750 (5.5% on $450K taxable) | TX saves $24,750/yr for C-corps | $247,500 |
| $1,000,000 net profit (C-corp) | $0 | $52,250 (5.5% on $950K taxable) | TX saves $52,250/yr for C-corps | $522,500 |
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Choosing between Texas and Florida for your business? The right answer depends on your entity structure, revenue level, and growth plans. Taxhub matches you with a CPA who can model both scenarios for your specific numbers. Virtual meetings, fixed pricing.
⚠ Not for simple single-state returns. Free filing is fine for straightforward W-2 situations.
Get Matched With a Small Business Tax CPA →For a single-member or multi-member LLC taxed as a pass-through (disregarded entity or partnership): Texas and Florida are equivalent on state income tax — both $0. The tie-breakers are: property tax (Florida ~0.86% lower than Texas ~1.6%), property insurance (Florida significantly higher than Texas in most markets), business ecosystem, and personal preference. For LLCs with large commercial real estate holdings, Florida's lower property tax is valuable. For LLCs with employees and no real estate, the states are nearly equal and the decision should be driven by where you want to live and work.
Texas's franchise tax applies to businesses with annual total revenue above $2.47 million. The rate is 0.75% of 'taxable margin' (not gross revenue — margin is calculated after deductions). For retail and wholesale businesses the rate is 0.331%. Most small businesses and startups never reach the threshold. A services firm with $3M in revenue and $1M in margin (after COGS and compensation deductions) would owe approximately $7,500/year in franchise tax — much less than Florida's 5.5% corporate income tax would be on equivalent C-corp profit. For pass-through entities above $2.47M revenue, franchise tax is the only Texas state tax and is structured to minimise impact on businesses with real operating costs.
Texas. Florida charges 5.5% on C-corporation net income above $50,000; Texas charges zero corporate income tax. For a C-corp with $500,000 in net income, Florida corporate tax is approximately $24,750/year; Texas is $0. Texas's franchise tax only applies if the C-corp's revenue exceeds $2.47M, and the 0.75% margin calculation typically results in a much lower effective rate than Florida's 5.5% net income tax. For any business considering a C-corp structure — particularly before a liquidity event or institutional fundraising — Texas's tax position is clearly superior.
Both states have grown significantly as startup ecosystems since 2020. Austin leads Texas with the most active VC and startup community, followed by Dallas/Fort Worth for Series B+ companies. Miami is Florida's dominant tech hub, with growing seed and early-stage activity. Neither Texas nor Florida has Silicon Valley's scale of institutional VC. For tax purposes: both states are equally good for pass-through startups; Texas is better for C-corps. The practical choice is often lifestyle-driven — Austin's culture attracts a different founder profile than Miami's.
For real estate investment businesses (rental income, flips, development): Florida's lower property tax (~0.86% vs Texas ~1.6%) is a significant advantage on property values. A $2M commercial property in Texas generates ~$32,000/year in property tax; in Florida ~$17,200/year. However, Florida's property insurance is dramatically more expensive ($4,000–$15,000+ on commercial property depending on location and coverage). Net result varies by property location, value, and insurance requirements. Texas has stronger corporate income tax protection for C-corp property holding structures; Florida's property tax advantage favours long-term income property holds.