Compare taxes and see how much you save moving from Texas to New York
Texas versus New York is a clean, high-stakes comparison for business owners — and one of the most financially significant relocation decisions available in the United States. Texas levies no personal income tax and no corporate income tax. New York State levies income tax up to 10.9%; New York City adds up to 3.876%. A business owner in New York City earning $300,000 in pass-through income pays approximately $42,000–$46,000 in combined state and city income tax annually. The same business owner in Austin or Dallas pays zero. Over a decade, the difference is $420,000–$460,000 before investment returns. Texas's franchise tax (0.75% of margin above $2.47M) barely affects small and mid-size businesses. For a service business with $500,000 in revenue and $150,000 in margin, the franchise tax is approximately $1,125/year — trivial compared to New York's income tax. Texas also has no entity formation fees based on revenue, no LLC publication requirement, and no minimum franchise tax on small businesses. New York's advantage is concentrated entirely in access: finance, media, law, insurance, and corporate headquarters are overwhelmingly located in New York City. For businesses that must be in New York to compete, the tax cost is a necessary expense. For businesses that can operate remotely or from a Texas base, the tax saving is one of the most compelling financial decisions available.
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 revenue; no entity minimum fees
State + NYC Income Tax
NY state income tax up to 10.9%; NYC adds up to 3.876%; combined NYC rate up to 14.776% on business owner income
At $300,000 business profit income:
Texas saves approximately $35,000–$46,000/year vs NYC at $300K pass-through business profit (combined NY state + NYC income tax). Vs New York State only (non-NYC): approximately $27,000/year saving at $300K. Texas franchise tax applies above $2.47M revenue at 0.75% of margin.
| Income | TX Tax | NY Tax | Savings | 10-Year |
|---|---|---|---|---|
| $100,000 net profit | $0 | ~$10,350 NY state / ~$14,100 NYC total | TX saves ~$10,350–$14,100/yr | $103,500–$141,000 |
| $200,000 net profit | $0 | ~$22,100 NY state / ~$29,800 NYC total | TX saves ~$22,100–$29,800/yr | $221,000–$298,000 |
| $300,000 net profit | $0 | ~$32,000 NY state / ~$43,500 NYC total | TX saves ~$32,000–$43,500/yr | $320,000–$435,000 |
| $500,000 net profit | $0 | ~$52,150 NY state / ~$71,500 NYC total | TX saves ~$52,150–$71,500/yr | $521,500–$715,000 |
| $1,000,000 net profit | $0 (if under franchise threshold) | ~$108,100 NY state / ~$147,600 NYC total | TX saves ~$108,100–$147,600/yr | $1,081,000–$1,476,000 |
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Relocating from New York to Texas as a business owner requires careful handling of New York domicile, nexus analysis, and part-year returns. Taxhub matches you with a CPA experienced in New York-to-Texas moves for business owners. 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 →In Texas, a single-member LLC (taxed as a sole proprietorship) owes no Texas income tax on income. If the LLC's total revenue is under $2.47M, it also owes no Texas franchise tax. Annual Texas LLC filing cost: $300 formation fee, $0 annual income tax. In New York, a single-member LLC owes New York state income tax (up to 10.9%) plus NYC income tax (if the owner lives in NYC, up to 3.876%) on all profits. New York also charges an annual LLC filing fee ($25 minimum), and newly formed LLCs must comply with the publication requirement ($1,000–$2,000 in NYC). Total first-year cost difference for a typical NYC LLC vs Texas LLC: $10,000–$20,000+ depending on income.
If you genuinely establish Texas domicile and your business has no New York nexus (no employees, offices, or New York-based property), you owe no New York income tax on Texas-sourced income. However, if you work while physically in New York even temporarily, New York may assert the right to tax that income. New York's 'convenience of the employer' rule can tax remote workers of New York employers. For business owners with direct NYC clients but no physical NYC presence, the analysis is fact-specific — a CPA experienced in New York nexus rules is essential.
Yes. Financial services (hedge funds, private equity, investment banking), law (Wall Street firms), advertising and media, Broadway and entertainment, and luxury fashion/retail all have compelling network advantages in New York that may justify the tax cost. For a hedge fund manager raising institutional capital, the New York ecosystem may generate deal flow that exceeds the $50,000–$100,000/year in state income taxes. For a software developer building a remote SaaS business, the New York network advantage is minimal and the tax cost is a pure loss.
Both are strong. Dallas-Fort Worth is more commonly compared to New York in finance, professional services, and tech — with no income tax, strong corporate HQ presence (AT&T, Toyota USA, American Airlines), and growing venture capital. Houston is better for energy, logistics, and healthcare-related businesses. Austin has become the dominant tech hub, attracting Oracle, Tesla, Apple, and Meta offices. Miami (Florida, not Texas) has gained significant finance and crypto business from New York since 2020. The choice depends on industry, talent needs, and personal preference — all three Texas metros have zero state income tax.
No. Texas does not impose a corporate income tax on C-corporations. Instead, it levies the franchise tax (margin tax) on businesses above $2.47M in total revenue. The franchise tax rate is 0.75% of taxable margin (total revenue minus the greater of COGS, compensation paid, or 30% of revenue). Most C-corporations in Texas with moderate revenue and real business expenses end up with an effective franchise tax rate well below 0.75% of revenue. This compares favourably to New York's 6.5–7.25% corporate franchise tax, which is applied to net income.