A series of new Texas laws that affects businesses, property owners, local jails, app stores and artificial intelligence will take effect statewide on Jan. 1, 2026, following passage during the Legislature’s most recent regular and special sessions.
The measures, which lawmakers approved in 2025, will become law as scheduled even as some other high‑profile issues, including congressional redistricting, remain under court review. The changes range from property tax exemptions for inventory to new requirements for immigration cooperation and digital age checks.
Below is a breakdown of key laws taking effect and how they are designed to work.
Business tax relief on inventory
House Bill 9
House Bill 9 creates a new property tax exemption for business inventory. Beginning Jan. 1, Texas businesses may exclude up to $125,000 of inventory value from property taxes imposed by cities, counties and school districts.
The provision applies to qualifying inventory holdings and is intended to reduce taxable value on local property tax rolls. State fiscal analyses prepared during the legislative session projected that the exemption would mainly affect small and midsize firms that carry inventory for manufacturing, wholesale and retail operations.
The exemption will first apply to the 2026 tax year, meaning local appraisal districts and tax offices will begin incorporating the change into notices and bills issued later in the year.
Mandatory immigration cooperation for most county jails
Senate Bill 8
Senate Bill 8 requires most Texas counties that operate jails to participate in immigration enforcement cooperation with U.S. Immigration and Customs Enforcement (ICE) under the federal 287(g) program.
Under 287(g) agreements, local jail or law enforcement personnel can perform certain immigration-related functions under ICE supervision, such as checking immigration status and issuing detainers on people in custody. SB 8 directs counties with jails that meet the law’s criteria to enter or maintain such agreements, formalizing cooperation that had previously varied by jurisdiction.
The law also creates a state grant program to help counties cover costs tied to 287(g) participation, including training and staffing. The Texas Department of Public Safety and related agencies are responsible for administering the funding and oversight.
Faster eviction process for squatters
Senate Bill 38
Additional sections of Senate Bill 38, which revises Texas’ anti‑squatting framework, will take effect Jan. 1. Earlier provisions became effective in the fall, but the remaining parts now complete the law’s rollout.
SB 38 modifies procedures for removing unauthorized occupants from residential and commercial property. It clarifies how property owners can initiate removal of squatters who lack a valid lease or ownership claim and sets timelines and documentation standards for law enforcement and courts.
The law aims to streamline the eviction process in cases where individuals occupy a property without the owner’s consent, including situations involving fraudulent leases or false claims of tenancy. County courts and constables will apply the updated rules to new filings that arise after the effective date.
New digital age‑verification rules for app stores
Senate Bill 2420
Senate Bill 2420 establishes statewide age‑verification and parental‑consent requirements for app stores and app developers that serve Texas users.
Under the law:
- App store operators must verify the age of every user.
- For minors, app stores must obtain parental consent before a child can download apps, make in‑app purchases or otherwise access software via the store.
- App developers must comply with age‑rating and transparency standards, including disclosures about content and data practices.
Violations are enforceable as deceptive trade practices under Texas law, giving the Office of the Attorney General authority to investigate and bring civil actions.
SB 2420 is currently being challenged in federal court by industry and civil liberties groups that argue the measure infringes on First Amendment protections and privacy rights. As of Jan. 1, the law is scheduled to take effect unless a court issues an order blocking or delaying its enforcement.
Statewide framework for artificial intelligence
House Bill 149
House Bill 149, known as the Texas Responsible Artificial Intelligence Governance Act, creates a statewide regulatory framework for AI systems used in both public and private sectors.
Key components include:
- A prohibition on harmful or discriminatory uses of AI, particularly in areas such as employment, housing, credit and essential services.
- Privacy protections for individuals whose data is used to train or operate AI systems.
- A statewide AI council to study emerging technologies, recommend standards and coordinate with agencies.
- A regulatory “sandbox” that allows companies and researchers to test AI tools under defined guardrails while the state evaluates potential risks and benefits.
- Preemption of local AI ordinances, meaning cities and counties may not adopt conflicting AI rules.
HB 149 also bans AI systems that are designed to create or distribute illegal deep‑fake content, including nonconsensual sexually explicit images or videos. Existing criminal and civil statutes will apply to such violations, and state regulators can pursue additional enforcement where applicable.
State agencies are preparing guidance and rulemaking to implement HB 149, including definitions of covered AI systems, documentation requirements and compliance timelines.