Dallas, December 30, 2025
As the new year approaches, several significant laws will take effect in Texas, impacting areas such as technology, taxation, and public safety. These legislative changes include the App Store Accountability Act, which aims to enhance child safety in digital environments, and the Responsible Artificial Intelligence Governance Act, which establishes ethical guidelines for AI development. Additionally, House Bill 9 significantly increases the property tax exemption for business inventory, providing relief for small businesses. Residents are encouraged to familiarize themselves with these changes to maximize potential benefits and ensure compliance.
Dallas, Texas – December 30, 2025
New Texas Laws Set to Take Effect on January 1, 2026
As the new year approaches, several significant laws in Texas are scheduled to take effect on January 1, 2026, impacting various aspects of daily life, including technology, taxation, and public safety. These legislative changes reflect Texas’s ongoing efforts to adapt to technological advancements, economic considerations, and public safety needs. Local entrepreneurs and small businesses are poised to benefit from several of these law adjustments, which aim to reduce regulatory burdens and foster economic growth.
App Store Accountability Act
The App Store Accountability Act mandates that app stores verify users’ ages and obtain parental consent before minors can download or purchase apps. This law aims to enhance child safety in digital environments. However, operators of major app stores, such as Google and Apple, have expressed concerns regarding potential privacy implications stemming from these requirements.
Responsible Artificial Intelligence Governance Act
The Responsible Artificial Intelligence Governance Act establishes ethical guidelines for AI development, focusing on prohibiting harmful applications and unauthorized use of biometric data. This act also introduces a “regulatory sandbox,” designed to foster innovation while ensuring compliance with ethical standards. The penalties for violations range from $10,000 to $200,000.
Property Tax Exemption for Business Inventory
House Bill 9 increases the property tax exemption for business inventory from $2,500 to $125,000. This change aims to provide significant relief to businesses by lowering their taxable inventory value. While this law is expected to bolster small businesses, local governments could face a substantial reduction in revenue, estimated at $442 million in fiscal year 2027, unless they recalibrate tax rates accordingly.
Replacement of STAAR Test
House Bill 8 replaces the State of Texas Assessment of Academic Readiness (STAAR) test with three shorter assessments administered throughout the school year. This change is intended to give educators and parents a more comprehensive evaluation of student progress while reducing the high-pressure environment associated with a single high-stakes test.
Eviction Process Reforms
Senate Bill 38 reforms Texas’s eviction process by clarifying court procedures during appeals and strengthening landlord protections regarding government rental assistance. It requires tenants appealing eviction judgments to pay their rent into the court registry to maintain possession. This law seeks to balance the rights of both landlords and tenants in an increasingly complex rental environment.
Elimination of Mandatory Vehicle Safety Inspections
Effective January 1, 2026, non-commercial vehicles will no longer require annual safety inspections. Instead, drivers will pay a $7.50 “inspection program replacement fee” as part of their vehicle registration. This regulatory change is aimed at simplifying the registration process and reducing costs for vehicle owners, although emissions testing may still apply in certain counties including Dallas.
New Immigration Enforcement Law
Senate Bill 8 mandates that county sheriffs who operate jails, or contract private providers, actively participate in the federal 287(g) program. This law is intended to enhance cooperation with U.S. Immigration and Customs Enforcement (ICE), signaling Texas’s commitment to stronger immigration enforcement.
New Research and Development Tax Credit
Senate Bill 2206 replaces the existing research and development (R&D) franchise tax credit with a new structure that aligns more closely with federal R&D calculations. The updated credit allows qualified expenses to be eligible for up to 8.722% reimbursement. This tax incentive is positioned to attract more private investment into Texas’s innovative sectors.
Newborn Enrollment Extension
Senate Bill 896 extends the automatic coverage period for newborns, giving parents an additional 60 days to request continuation of their coverage under a Texas medical plan. This measure enhances health security for new families facing early-life medical needs.
Intangible Personal Property Tax Exemption
House Bill 22 removes intangible personal property from taxation, impacting business goodwill and other non-physical assets. This law aims to standardize tax treatment for intangible properties, contributing to a more favorable business climate across Texas.
Stock-Exchange Activity Franchise Tax Exemption
Senate Bill 1058 exempts specific stock exchange activities from the Texas franchise tax, highlighting an effort to position the state as a competitive hub for financial services and trading. This exemption encourages financial innovation and could potentially stimulate economic growth in Dallas.
School District Disaster Tax Rate Restrictions
Senate Bill 1502 restricts the ability of school districts to raise tax rates under disaster provisions without voter approval. This initiative reinforces taxpayer protections and emphasizes local control, allowing community members to have more oversight over educational funding and taxation.
AI Guardrails and Tax Rates After Disasters
House Bill 149 establishes the Texas Artificial Intelligence Council, responsible for monitoring AI usage in state government and ensuring ethical standards are upheld. Additionally, the bill mandates transparency regarding AI interactions in government services, aiming to protect citizen rights during an era of rapid technological expansion.
These new laws not only adapt Texas governance to modern challenges but also reflect a commitment to fostering a supportive environment for local businesses and entrepreneurs. Residents and businesses are encouraged to familiarize themselves with these changes to ensure compliance and take advantage of potential benefits.
Frequently Asked Questions (FAQ)
What is the App Store Accountability Act, and when does it take effect?
The App Store Accountability Act requires app stores to verify users’ ages and obtain parental consent before minors can download or purchase apps. This law aims to enhance child safety in digital environments. However, app store operators, including Google and Apple, have expressed concerns about privacy implications.
What does the Responsible Artificial Intelligence Governance Act entail?
The Responsible Artificial Intelligence Governance Act establishes ethical guidelines for AI development, prohibiting harmful applications and unauthorized use of biometric data. This act also introduces a “regulatory sandbox” for testing innovative AI systems. Penalties for violations range from $10,000 to $200,000.
How does House Bill 9 affect property tax exemptions for businesses?
House Bill 9 increases the property tax exemption for business inventory from $2,500 to $125,000. This change aims to provide relief to businesses by reducing their taxable inventory value. However, local governments may experience a reduction in revenue, estimated at $442 million in fiscal year 2027, unless they adjust tax rates accordingly.
What changes are being made to student assessments in Texas?
House Bill 8 replaces the State of Texas Assessment of Academic Readiness (STAAR) test with three shorter assessments administered throughout the school year. This change seeks to provide a more comprehensive evaluation of student progress and reduce the emphasis on a single high-stakes test.
What reforms are being implemented in the eviction process?
Senate Bill 38 reforms Texas’s eviction process by clarifying court procedures during appeals and strengthening landlord protections when government rental assistance is involved. The bill requires tenants appealing eviction judgments to pay rent into the court registry to retain possession and allows either party to contest the required amount if rent was partially paid by a government agency. The law applies to eviction suits filed on or after January 1, 2026.
How does the elimination of mandatory vehicle safety inspections impact vehicle owners?
Effective January 1, 2026, non-commercial vehicles will no longer require annual safety inspections. Instead, a $7.50 fee, termed the “inspection program replacement fee,” will be added to vehicle registration fees. This change is intended to streamline the registration process and reduce costs for vehicle owners. However, emissions testing may still be required in certain counties, including Dallas, due to local ordinances.
| Law | Description | Impact |
|---|---|---|
| App Store Accountability Act | Requires age verification and parental consent for app downloads by minors. | Enhances child safety, but raises privacy concerns. |
| Responsible Artificial Intelligence Governance Act | Sets ethical guidelines for AI development and establishes penalties. | Promotes responsible innovation in AI technologies. |
| Property Tax Exemption for Business Inventory | Increases exemption for inventory from $2,500 to $125,000. | Provides financial relief to small businesses. |
| Replacement of STAAR Test | Replaces STAAR with three shorter assessments throughout the year. | Reduces high-stakes testing pressure on students and educators. |
| Eviction Process Reforms | Clarifies appeals process and strengthens landlord protections. | Aims for balance between tenant rights and landlord interests. |
| Elimination of Vehicle Safety Inspections | Non-commercial vehicles no longer need annual safety inspections. | Streamlines vehicle registration and reduces costs for owners. |
| New Immigration Enforcement Law | Mandates county sheriffs to participate in the federal 287(g) program. | Strengthens local enforcement of immigration laws. |
| New R&D Tax Credit | Replaces the existing R&D franchise tax credit with a new structure. | Encourages investment in research and technology. |
| Newborn Enrollment Extension | Extends coverage period for newborns under Texas medical plans. | Enhances health security for new families. |
| Intangible Personal Property Tax Exemption | Exempts intangible assets like goodwill from taxation. | Simplifies tax framework for businesses. |
| Stock-Exchange Activity Franchise Tax Exemption | Exempts specific trading activities from franchise tax. | Encourages growth in the financial sector. |
| School District Disaster Tax Rate Restrictions | Limits tax increases without voter approval during disasters. | Protects taxpayers from unexpected financial burdens. |
| AI Guardrails and Tax Rates After Disasters | Creates an AI Council to monitor ethical use of AI in government. | Promotes transparency and ethical practices in AI usage. |
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