How Texas compares
Ranked against the other 49 states on the figures we hold. Rates that combine state and local components — sales tax, the minimum wage where it varies by region — are shown on this page but not ranked, because a single number would misstate them.
| Figure | TX | Nationally | In its region |
|---|---|---|---|
| PopulationUS Census Bureau, Vintage 2025 estimates, July 1, 2025 | 31,709,821 | 2nd highest of 50 | 1 of 4 |
| GDP ($bn)Bureau of Economic Analysis, 2025 | 2904 | 2nd highest of 50 | 1 of 4 |
| Median household incomeUS Census Bureau, ACS 2024 1-year, 2024 | $79,721 | 24th highest of 50 | 2 of 4 |
| Unemployment rateBureau of Labor Statistics, LAUS (seasonally adjusted, preliminary), September 2026 | 4.4% | tied 37th lowest of 50 | 2 of 4 |
| Foreign-born shareUS Census Bureau, ACS 2024 1-year, 2024 | 18.4% | 8th highest of 50 | 1 of 4 |
| Property tax ratechecked Nov 2026; confirm with the Texas legislature | 1.60% | 45th lowest of 50 | 4 of 4 |
| Deposit return window (days)checked Nov 2026; confirm with the Texas legislature | 30 | tied 15th lowest of 50 | 2 of 4 |
| Eviction notice (days)checked Nov 2026; confirm with the Texas legislature | 3 | tied 31st highest of 50 | 3 of 4 |
| Final pay deadline (days)checked Nov 2026; confirm with the Texas legislature | 6 | tied 21st lowest of the 29 states that set one | 3 of 4 |
- State income tax: no9 of 50 states answer the same way
- At-will employment: yesthe same in all 50 states — it does not set Texas apart
- Paid sick leave required: no30 of 50 states answer the same way
- Paid family leave: no38 of 50 states answer the same way
- Workers' comp required: no1 of 50 states answer the same way
- Rent control permitted: no46 of 50 states answer the same way
- Annual report required: no7 of 50 states answer the same way
Statistical figures: US Census Bureau, Vintage 2025 estimates (July 1, 2025) · US Census Bureau, ACS 2024 1-year (2024) · Bureau of Economic Analysis (2025) · Bureau of Labor Statistics, LAUS (seasonally adjusted, preliminary) (September 2026) · SBA Office of Advocacy, 2025 Small Business Profiles (2025). Tax, wage, business and tenancy figures are recorded from state sources and were last checked on 2026-11-05 — confirm anything you are about to act on with the Texas legislature.
What's changing in Texas
Enacted changes with a fixed effective date. Contracts, payroll and leases signed now may run past these dates.
Took effect in the last 12 months
- January 1, 2026Eviction procedure overhaul (SB 38)
Applies to eviction suits filed on or after January 1, 2026: new court rules, more ways to deliver a notice to vacate, faster removal of squatters.
Source ↗
Checked against official sources on 2026-11-05.
How long you have in Texas
The periods that decide whether something is on time. Days are calendar days unless the underlying rule says otherwise.
- Return a security deposit within
- 30 days
- Eviction notice before filing
- 3 days
- Final paycheck within
- 6 days
- LLC formation processed in
- 5—7 business days (online)
- Overtime starts after
- 40 hours/week (FLSA)
AI Legal Insights — Texas
AI-generated · Updated July 2026
Texas operates under a civil law influence but is primarily a common law jurisdiction with a robust judicial system including the Texas Supreme Court. The state is known for its business-friendly statutes and a legal environment that emphasizes freedom of contract and limited regulatory oversight.
Texas offers a highly competitive business climate characterized by no state income tax and a massive energy and technology sector. While the regulatory environment is generally light, businesses must navigate complex local sales tax structures and property tax assessments.
Texas is home to a significant foreign-born population, making up 17.2% of the state, which drives diverse economic activity. While the state has implemented several strict border-related enforcement laws, it remains a major hub for international trade and immigrant entrepreneurship.
- ›Ensure all real estate contracts comply with the Texas Estates Code and include specific disclosures required by state law.
- ›Include a clear choice-of-law clause specifying Texas law to avoid jurisdictional uncertainty in litigation.
- ›Be mindful of the Texas Deceptive Trade Practices Act (DTPA) when drafting consumer-facing agreements to avoid statutory damages.
AI-generated insights · Verify with a licensed attorney before relying on this information.
🔍 What documents do you need in Texas?
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Employment Laws
Texas labor regulations
Texas is an at-will employment state that follows federal FLSA standards. The minimum wage is the federal $7.25/hr, unchanged since July 2009. Texas does not require paid sick leave or paid family leave, and state law prevents cities from imposing their own sick leave mandates on private employers. Texas is also the only state where private employers may choose not to carry workers' compensation insurance.
| Law | TX Rule | Federal Floor |
|---|---|---|
| Minimum Wage | $7.25/hr (same as federal) | $7.25/hr |
| Tipped Minimum Wage | $2.13/hr cash wage if tips bring pay to at least $7.25/hr | $2.13/hr cash wage |
| Overtime | After 40 hrs/week (follows FLSA) | FLSA: after 40 hrs/week |
| Paid Sick Leave | None; state law preempts city sick leave ordinances | None (federal) |
| Paid Family Leave | None | FMLA: 12 weeks unpaid |
| Workers Comp | Optional for most private employers; non-subscribers must notify employees and the state | Federal employees: yes |
| At-Will Employment | Yes | Default nationwide |
| Final Paycheck | Within 6 calendar days if fired; next regular payday if the employee quits | Next regular payday |
| Meal Breaks | No state requirement for adult employees | No federal requirement |
- The Texas Commission on Human Rights Act prohibits employment discrimination based on race, color, religion, sex, national origin, disability, and age (40+).
- The Texas Whistleblower Act protects public employees who report violations of law in good faith; private-sector protection is narrower.
- Employers may not fire employees for serving on a jury or for taking time off to vote as allowed by law.
- USERRA protects service members returning from military duty, and state law adds protection for Texas military forces.
- Non-compete agreements are enforceable only if tied to an otherwise enforceable agreement and reasonable in time, geography, and scope; special limits apply to physicians and some other health care workers.
Sources: U.S. Department of Labor state minimum wage table · state labor agencies (checked Nov 2026)
Landlord-Tenant Laws
Texas rental regulations
Texas landlord-tenant law generally favors landlords. Rent control is prohibited by state law except in narrow emergency circumstances, and there is no statutory cap on security deposits, though deductions must be itemized. A notice to vacate is generally 3 days unless the lease says otherwise. Eviction suits filed on or after January 1, 2026 follow new court rules under SB 38, which also allows more ways to deliver notices and speeds up removal of squatters.
| Topic | TX Rule |
|---|---|
| Security Deposit | No statutory limit — the amount is set by the lease |
| Deposit Return | Within 30 days after the tenant surrenders the unit, with an itemized list of deductions; the landlord may require a forwarding address first |
| Rent Control | Prohibited by state law, with a narrow exception for declared housing emergencies |
| Eviction Notice (Non-Payment) | 3-day written notice to vacate unless the lease provides a different period |
| Eviction Process (SB 38) | Suits filed on or after Jan 1, 2026 follow new justice court rules, with more allowed delivery methods for notices and faster removal of squatters |
| Late Fees | Only if in a written lease and rent remains unpaid 2 full days after the due date; must be reasonable — presumed reasonable up to 12% of monthly rent (4 or fewer units) or 10% (larger buildings) |
| Repairs | Landlord must make a diligent effort to repair conditions that materially affect health or safety after notice; tenant remedies, including repair and deduct, apply only in limited cases and require proper notice |
| Security Devices | Landlord must provide working keyed deadbolts, door viewers, and window latches, and rekey locks within 7 days after a new tenant moves in |
| Retaliation Protection | Landlords may not retaliate against tenants for good-faith repair requests or complaints to a government agency |
Both landlords and tenants have enforceable rights under Texas law. Document all communications and keep copies of your lease agreement. Use AI review to spot risky clauses before signing.
Starting a Business
Texas LLC formation guide
Texas has no personal income tax and no corporate income tax. Instead, most businesses are subject to the franchise (margin) tax of 0.75% of taxable margin; for 2026 reports, no tax is due when annualized revenue is at or below $2.65 million. There is no Secretary of State annual report, but businesses file a franchise tax report and a Public Information Report each year by May 15. Forming an LLC costs $300. Texas has about 3.5 million small businesses, employing 44.4% of the private workforce.
Step-by-step LLC formation
- 1Choose a business name — must include "LLC" or "Limited Liability Company" (or an abbreviation); check availability with the Texas Secretary of State
- 2Designate a registered agent with a physical Texas address
- 3File a Certificate of Formation (Form 205) with the Texas Secretary of State online through SOSDirect or by mail
- 4Pay the $300 non-refundable filing fee (online processing typically takes 5–7 business days)
- 5Get an EIN from the IRS — free at irs.gov
- 6Set up your franchise tax account with the Texas Comptroller (comptroller.texas.gov) and apply for a sales and use tax permit if you sell taxable goods or services
- 7File the franchise tax report and Public Information Report by May 15 each year — no tax is due below the $2.65 million threshold for 2026 reports, but the information report is still required
- 8If you hire, register with the Texas Workforce Commission for unemployment tax and decide whether to carry workers' compensation insurance
- 9Open a business bank account — use your EIN and Certificate of Formation
Every LLC also needs a free EIN from the IRS (Form SS-4). Apply online at irs.gov — takes about 15 minutes and is required to open a business bank account.
Popular IRS Forms
Most-filed federal forms for Texas taxpayers
Fill these out online with plain-English guidance — every field explained, no accountant required. Download as a ready-to-file PDF when done.
The main annual federal income tax return every taxpayer files.
Fill out free →Give your SSN or EIN to a client before getting paid as a contractor.
Fill out free →Report $600+ paid to independent contractors during the year.
Fill out free →Tell your employer how much federal tax to withhold from pay.
Fill out free →Report income and expenses from a sole proprietorship or LLC.
Fill out free →Report payroll taxes withheld from employees each quarter.
Fill out free →Get an automatic 6-month extension to file your 1040.
Fill out free →The year-end wage statement employers issue to each employee.
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Federal Offices
United States government offices in Texas
Walk-in assistance by appointment only. Call (844) 545-5640 to schedule, or book online at irs.gov.
Immigration appointments via my.uscis.gov or call (800) 375-5283.
Free Legal Aid
Texas legal assistance organizations
These organizations provide free or reduced-cost civil legal services to qualifying Texas residents.
Free civil legal services for low-income Texans in 68 counties
Free civil legal help for 72 Texas counties
Statewide legal hotline and self-help tools
Pro bono legal services in Harris County
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Texas Cities
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