The Format Tax

Deploying large language models in production often requires constraining outputs to structured formats such as JSON or XML, and prior work treats the resulting accuracy loss as an inherent structure tax'. We re-examine this claim by evaluating a battery of models, datasets and schemas, measuring task accuracy, confidence calibration, and hidden-state geometry. The tax turns out to depend on schema design rather than on structure per se: reasoning-first field ordering matches or exceeds free-form accuracy, while answer-first ordering causes steep drops, particularly in smaller models. Format sensitivity scales inversely with a task's own structural constraints, and schemas that preserve reasoning order also improve calibration with CKA showing greater separability between correct and incorrect representations in middle transformer layers. Our findings indicate that properly designed structured formats can match or exceed free-form performance, reframing the critical question from whether to structure' to `how to structure' for optimal reasoning preservation.

Prior work treats structured output as a reasoning tax, but this framing is incomplete: the cost of formatting depends strongly on a model's spare capacity. Using information-matched prose controls and a four-level schema complexity gradient, we separate format-specific effects from prompt-length confounds across 4 models and 5 benchmarks with 0% parse failures on successfully generated responses. We find that structured formats are capacity-dependent. Models with sufficient headroom absorb JSON constraints without degradation (Sonnet: $88.7\pm4.0$% JSON vs. $89.3\pm1.7$% CoT on MATH-Hard). In contrast, formats severely degrade models operating near their limits through two distinct mechanisms. First, under standard token budgets, Haiku drops 36.2pp ($p < 0.0001$) largely due to truncation. Second, even with extended budgets eliminating truncation, GPT-4o-mini drops 28.0pp ($p < 0.001$), revealing pure capacity competition independent of token exhaustion. This format penalty scales with schema complexity (McNemar $p < 0.0001$) and cannot be explained by prompt length alone. Furthermore, these results qualify claims of frontier model immunity: on AIME competition math, Opus 4.7 drops from 96.2% to 91.0% under JSON ($-5.3$pp; the displayed percentages are independently rounded, exact difference is $7/133 = 5.26$pp $\approx 5.3$pp). A delayed-structure ablation -- reasoning freely before formatting -- recovers most of the lost accuracy (3-run mean: 80--87%), supporting the capacity competition mechanism. The practical implication is not to avoid structured output, but to match it to capacity: when a model is near its limits, think first, format later.

When a language model must choose one answer from a large space of equally valid options, a format clause -- "Reply with JSON only" -- changes which answer it chooses. We re-run the One-Word Census (arXiv:2607.12796): 31 wide-answer-space category prompts asked of 44 models, now with the reply requested in JSON -- no schema enforcement, no constrained decoding, only the request. Convergence deepens sharply: on the unconstrained "Pick a word" prompt the modal answer rises from 41% to 64% of the pool and distinct answers fall from 52 to 36; mean answer-choice surprisal drops from 1.80 to 1.58 bits. The tax is progressive: six of 44 models move individually (BH-FDR q=.10), all toward the mode, led by the most distinctive models, while the conformist floor is immobile. It is a sharpener, not a re-indexer -- the plain-chat modal answer survives in 28 of 31 categories. Defaults are register-indexed: a within-run re-sample (n=20) finds JSON shifts 53% of a model's stable chat defaults, mostly back to the crowd, and installs defaults absent from chat (Claude Fable 5 answers "cerulean" for colour 0% of the time in chat, 100% in JSON). Full-battery controls reveal a register gradient: compression is significant and specific to the answer-delivery formats models are trained to speak (JSON -0.22 bits, p=.0002; XML -0.19, p=.002), absent for YAML and CSV, and reversed for an arbitrary bracket wrapper (+0.13, p=.009) -- weighing the mechanism toward tool-use post-training. Enforcing the schema at the decoder (response_format) compresses no further than the request (-0.03 bits): the collapse lives in the model's response to the register, not the decoder. Structured output is how software consumes language models, and that surface is served by a measurably more homogeneous model than the chat surface on which models are evaluated, compared, and chosen.