📅 2026 Update: Key Tax Changes in Texas

Since the original article was published, several significant changes have occurred in Texas tax laws. These updates may affect how residents and businesses handle their taxes. The earlier article continues further down this page for additional context.

🏢 Franchise Tax Changes

Effective January 1, 2026, Texas updated its franchise tax depreciation rules to align with federal guidelines. This change allows businesses to take advantage of bonus depreciation as authorized by the federal One Big Beautiful Bill Act of 2025. This can provide relief to many businesses by letting them deduct a larger portion of their depreciation costs upfront.

🍽️ Abolition of Hidden Double Tax

On September 30, 2026, Texas Comptroller Don Huffines signed an executive order to eliminate a hidden tax that affected Texans when ordering food, booking rides, or shopping online. This tax had been in place since 2025, and its repeal aims to provide financial relief to consumers across the state.

🏡 Property Tax Relief Act

The Property Tax Relief Act, known as Senate Bill 2, took effect on January 1, 2025. This legislation introduced changes to property tax assessments and exemptions in Texas. These changes aim to reduce the property tax burden on homeowners and provide additional exemptions to certain groups.

🚗 Vehicle Inspection Changes

Beginning January 1, 2025, House Bill 3297 removed the requirement for annual vehicle safety inspections for non-commercial drivers during the registration process. This change simplifies the registration procedure and may help reduce costs for drivers.

📌 Key Takeaways

  • 🏢 Franchise tax rules now align with federal regulations.
  • 🍽️ A hidden tax on food and rides was abolished.
  • 🏡 Property tax assessments have been updated for relief.
  • 🚗 Annual vehicle inspections for non-commercial drivers are no longer required.
  • 📅 Stay informed on tax deadlines and changes to avoid penalties.

💡 Tips for Navigating Texas Taxes

Reviewing your situation with an attorney can help clarify your tax responsibilities and options.

📈 Understand Franchise Tax Rates

Familiarize yourself with the current franchise tax rates for 2026 and 2027. The no tax due threshold is now $2,650,000. Businesses with total revenue below this threshold must still file an information report.

🏨 Know Hotel Tax Responsibilities

If you're renting a room, remember that a hotel occupancy tax of 6% applies to the price paid for your stay. This tax is collected by the hotel at the time of payment.

⏰ Keep Track of Filing Deadlines

Annual reports for the franchise tax are due on May 15. If this date falls on a weekend or holiday, the due date shifts to the next business day. Mark your calendar to avoid late penalties.

💻 Use Online Filing Resources

Both the franchise tax and hotel occupancy tax can be filed online. The Texas Comptroller's WebFile system allows for convenient and timely submissions.

📊 Check for Local Sales Tax Changes

Local sales and use tax rates can change quarterly. Regularly check for updates to ensure compliance with the latest rates in your area.

📞 Utilize Free Assistance Options

Many resources are available through the Texas Comptroller's Office and local governments. These can help with understanding tax obligations and the filing process.

❓ Frequently Asked Questions

🤔 What is the no tax due threshold for franchise tax?

The no tax due threshold for the franchise tax in Texas is $2,650,000 for 2026 and 2027. Businesses below this threshold must still file an information report.

🏨 How is the hotel occupancy tax calculated?

The hotel occupancy tax in Texas is calculated at a state rate of 6% on the price paid for a room. Local taxing authorities may also impose additional taxes.

🌐 Where can I find forms for franchise tax filing?

Franchise tax forms can be found on the Texas Comptroller's WebFile system. This online portal enables users to file their annual reports electronically.

📆 When are hotel occupancy tax returns due?

Hotel occupancy tax returns are typically due on the 20th day of the month following the reporting period. For example, January returns are due by February 20.

🕒 Are processing times for tax filings consistent?

Processing times for franchise tax filings can vary. It is advisable to file early to ensure timely processing and avoid penalties.

📞 Can I get help with my taxes for free?

Yes, the Texas Comptroller's Office offers free resources, guides, and assistance for taxpayers. Local governments also provide free workshops and seminars to assist with tax compliance.

⚖️ Recent Cases Related to Texas Tax Laws

Recent court rulings have addressed various aspects of Texas tax laws, which may impact taxpayers in the state. These rulings provide insights into how laws are applied and interpreted.

You can browse more rulings on the news page to stay updated on recent legal developments affecting Texas tax laws.

End of October 2026 Update





Texas is the second-largest state in the United States, with a diverse culture and a thriving economy. To maintain its position as one of the most desirable places to live and work in the nation, Texas has in place numerous laws that promote and protect the rights and the well-being of its residents.

In this article, we will dive deep into some of the most important Texas state laws that you should know as a resident or someone looking to move to the state.

Texas Penal Code

The Texas Penal Code outlines specific actions that are considered crimes in the state, as well as the punishments that accompany them. These criminal offenses are separated into four categories, each with its corresponding punishment range and fines. These categories include:

Class C Misdemeanors: the least severe criminal offenses in Texas, typically with no jail time as a possibility. Examples include traffic violations, minor drug possession, and disorderly conduct.

Class B Misdemeanors: carry up to 180 days in jail and a $2,000 fine. Examples include first-time drunk driving offenses, possession of marijuana, and minor theft.

Class A Misdemeanors: carry up to one year in jail and a $4,000 fine. Examples include theft of something valued from $1,500 to $20,000, criminal mischief for damage between $1,500 and $20,000, and stalking.

Felony Offenses: The most severe criminal offenses in Texas. Felony charges range from state jail felonies, third-degree felonies, second-degree felonies, first-degree felonies, and capital murder. Capital murder carries a maximum sentence of life imprisonment without parole or the death penalty.

Texas Family Law

Family law deals with issues related to marriage and relationships, including divorce, child custody, adoption, and child support. The Texas Family Code governs this area of the law in the state.

In Texas, if you want to get married, you will need to obtain a marriage license from the county clerk’s office. You must be at least 18 years old and not already married or related to one another, either through blood or adoption. Some counties require a blood test before issuing a marriage license.

If a marriage breaks down and ends in divorce, the Texas Family Code divides property and assets between the parties. Texas is a community property state, meaning property obtained during the marriage is typically split equally between the spouses.

Child custody can be a complex issue in Texas, and the courts consider factors such as the child's best interests, each parent's ability to provide care, and the child's wishes. Custody can be joint, with both parents sharing time and responsibility for the child, or sole custody, in which one parent is responsible for the child's care and decision-making.

📝 See Also

Texas Labor Laws

Employment laws in Texas are designed to protect employees from discrimination, harassment, and workplace injuries. The Texas Workforce Commission (TWC) handles issues related to employment laws, including investigation and resolution of disputes.

One key employment law in Texas is the minimum wage requirement. As of January 1, 2022, the minimum wage is $7.25 an hour, the same as the federal minimum wage. However, many Texas cities have a higher minimum wage requirement; for example, the minimum wage in Austin is $15 per hour for most employers.

Another crucial employment law in Texas is the right to work. This means that Texas employees cannot be forced to join a union or pay union dues as a condition of employment. This law also protects employees who choose to refrain from union membership.

Texas Property Law

Property law covers the rights associated with owning and using real and personal property. This area of law in Texas is primarily regulated by the Texas Property Code.

Texas follows the common law system of property, where property rights are determined by rules of ownership and possession, typically based on who owns the property or who has possession of it.

Texas also has unique laws regarding homestead protection, which allows homeowners to protect their homes from creditors. The Texas Constitution prevents creditors from taking someone's primary residence, also referred to as a homestead, to satisfy certain debts, including credit card debt.

Texas Gun Laws

Texas is a gun-friendly state, and the Second Amendment of the United States Constitution clearly outlines citizens’ rights to bear arms in the state. Still, the state has implemented specific laws regulating firearms ownership, use, and transportation.

In Texas, you must be at least 18 years old to purchase a long gun (rifle or shotgun) and at least 21 years old to purchase a handgun. You must also be a resident of Texas and not be prohibited from owning firearms due to criminal convictions or mental health issues.

Texas allows the open carry of firearms, but you must have a permit to do so. You can obtain a concealed carry license by completing a training course and passing a background check. Texas is also a stand-your-ground state, meaning individuals can use deadly force if they believe that someone poses an imminent threat to their safety.

Texas Health Laws

The Texas Department of Health oversees health laws in the state, which regulate everything from food safety to vaccinations to medical marijuana.

Texas requires school-age children to be vaccinated against numerous diseases before attending school. Medical exemptions are allowed for some vaccinations, but religious and philosophical exemptions are not permitted.

Texas does have a medical marijuana program, but it is only available to individuals with certain qualifying medical conditions, including epilepsy, multiple sclerosis, and Parkinson's disease. The medical marijuana program does not allow for the smoking of marijuana; instead, only oral or topical administration is permitted.

Final Thoughts

Texas is a state with unique laws and regulations that its residents and those looking to move to the state should know. Understanding the Texas Penal Code, Texas Family Law, Texas Labor Laws, Texas Property Law, Texas Gun Laws, and Texas Health Laws is crucial to living in and navigating the state effectively.

This article is not exhaustive; there are numerous other laws in Texas that individuals must be aware of. Nonetheless, this comprehensive overview of Texas state laws emphasizes the essential areas that every Texan or potential Texan should take the time to understand.

The new laws in Texas, that were passed in 2010, focus on tanning, tobacco, and taxes. In addition to these areas, changes in Texas state laws also refer to a home owner's liability in regards to a legislator's ability to rebuild damaged homes caused by hurricanes or natural disasters. The following provisions are considered the newest Texas State laws:

Nobody under the age of 16.5 can use or operate a tanning bed. Those between the ages of 16.5 and 18 must have a parent or guardian's permission to access a tanning bed.

New Texas state laws require every retailer (who sells cigarettes) to sell fire-safe cigarettes; those who still sell non-fire safe cigarettes will be fined up to $100 a pack.

State laws in Texas require that property appraisers must consider foreclosures and properties which have decreased in value when appraising property taxes.
All owners of rental properties must install fire alarms for hearing impaired tenants upon request.

All college students must provide a doctor's note providing proof of receiving a vaccination for bacterial meningitis at least 10 days before attending school.