New Texas Laws Affecting Business Owners in 2025

As we step into 2025, Texas business owners must stay informed about the latest legislative changes that could impact their operations. The new Texas laws introduced this year cover a wide range of areas, including taxes, employment regulations, business licensing, and data privacy. Understanding these changes is crucial for compliance and maintaining a competitive edge.

In this comprehensive guide, we’ll break down the most significant new Texas law in 2025, its implications for businesses, and actionable steps to adapt smoothly.

1. Changes in Texas Business Tax Laws

Revised Franchise Tax Thresholds

One of the most notable new Texas laws affecting businesses is the adjustment to the franchise tax threshold. Previously, businesses with revenues below $1.23millionwereexempt.In2025,thisthresholdhasbeenraisedto\ast \ast$1.5 million**, providing relief to small businesses.

Key Takeaway:

• If your business revenue falls below $1.5 million, you may no longer owe franchise tax.
• Ensure accurate financial reporting to avoid penalties.

New E-Commerce Sales Tax Rules

With the rise of online businesses, Texas has updated its sales tax laws to include stricter regulations for e-commerce sellers. The new Texas laws now require:

• Marketplace facilitators (like Amazon, eBay) to collect and remit sales tax on behalf of third-party sellers.
• Out-of-state sellers exceeding $500,000 in Texas sales to comply with state tax laws.

Action Steps:

• Review your e-commerce tax obligations.
• Consult a tax professional to ensure compliance.

2. Employment Law Updates

Minimum Wage Adjustments

While Texas follows the federal minimum wage of $7.25/hour, several cities have enacted higher local rates. The new Texas laws in 2025 allow municipalities to set their own minimum wage, impacting businesses in:

• Austin ($15/hour)
• Dallas ($13.50/hour)
• Houston ($12/hour)

What Employers Should Do:

• Verify local wage requirements.
• Update payroll systems to reflect changes.

Paid Sick Leave Mandates

Another critical update under the new Texas laws is the expansion of paid sick leave. Businesses with 50+ employees must now provide:

• 40 hours of paid sick leave annually.
• Carryover of unused sick leave (up to 20 hours).

Compliance Tips:

• Update employee handbooks.
• Train HR teams on new policies.

Non-Compete Agreement Restrictions

Texas has modified its stance on non-compete clauses. Under the new Texas laws in 2025, non-compete agreements must:

• Be limited to 12 months (down from 24).
• Apply only to employees earning $75,000+ annually.

Impact on Businesses:

• Review existing employment contracts.
• Adjust non-compete terms to align with the law.

3. Data Privacy & Cybersecurity Regulations

Texas Data Privacy Act (TDPA) Expansions

Following the trend of states like California, Texas has strengthened its data privacy laws. The new Texas laws now require:

• Businesses collecting personal data from 50,000+ Texas residents to comply.
• Mandatory data breach notifications within 72 hours.
• Consumers’ right to opt out of data sales.

Steps for Compliance:

• Conduct a data audit to identify collected information.
• Implement clear privacy policies on your website.

Enhanced Cybersecurity Requirements

Certain industries (healthcare, finance) must now follow stricter cybersecurity protocols, including:

• Multi-factor authentication (MFA) for sensitive data access.
• Annual cybersecurity training for employees.

Best Practices:

• Invest in encryption tools.
• Schedule regular security audits.

4. Business Licensing & Permitting Changes

Streamlined Licensing Process

To encourage entrepreneurship, Texas has simplified business licensing under the new Texas laws in 2025:

• Single online portal for all state licenses.
• Reduced processing time (from 30 to 15 days).

How to Benefit:

• Apply for licenses early to avoid delays.
• Check the Texas Business Licensing Guide for updates.

New Zoning Laws for Home-Based Businesses

Home-based businesses now enjoy relaxed zoning restrictions, allowing:

• Up to 3 non-resident employees (previously 1).
• Limited customer visits without a permit.

Considerations:

• Verify local ordinances before expanding.
• Obtain necessary permits if scaling operations.

5. Environmental & Sustainability Regulations

Stricter Waste Disposal Rules

The new Texas law impose heavier penalties for improper waste disposal, affecting:

• Manufacturing firms
• Construction companies

Compliance Measures:

• Partner with certified waste management providers.
• Train staff on proper disposal practices.

Incentives for Green Energy Adoption

Texas is encouraging businesses to go green with:

• Tax credits for solar panel installations.
• Grants for energy-efficient upgrades.

Next Steps:

• Explore state energy programs.
• Consult an environmental compliance expert.

6. Changes in Contract & Liability Laws

Stronger Consumer Protection Laws

Businesses must now provide:

• Clearer contract terms (no hidden fees).
• 30-day cancellation notices for service contracts.

Risk Mitigation:

• Review all customer agreements.
• Ensure transparency in pricing.

Revised Liability for Gig Workers

With the gig economy growing, the new Texas law clarify:

• Independent contractors are not employees.
• Businesses must provide written agreements outlining responsibilities.

Protect Your Business:

• Draft clear contractor agreements.
• Avoid misclassification fines.

Final Thoughts: Preparing for 2025 Texas Business Laws

The new Texas laws in 2025 bring both challenges and opportunities for business owners. Staying proactive is key to seamless compliance and operational success.

Action Plan for Business Owners:

Review financials for tax law changes.
Update HR policies to reflect employment updates.
Enhance data security to meet privacy laws.
Check licensing requirements for smooth operations.
Consult legal experts for complex compliance issues.

By understanding these new Texas laws, you can position your business for growth while avoiding costly penalties. Stay informed, adapt quickly, and leverage new opportunities in the evolving Texas business landscape.