5 New Texas Laws Taking Effect on January 1st

Here are five of the most impactful new laws taking effect in the Lone Star State this January.

1. The App Store Accountability Act (SB 2420)

In an effort to increase online safety for minors, Senate Bill 2420 mandates new requirements for digital marketplaces like the Apple App Store and Google Play.

• Age Verification: Starting January 1st, app store operators must verify the age of all Texas users when they create an account.
• Parental Controls: For any user identified as a minor (under 18), the store must obtain verifiable parental consent before allowing app downloads or in-app purchases.
• Ratings Transparency: The law also requires that apps display clear age ratings and explain how those ratings were determined.

2. Texas Responsible AI Governance Act (HB 149)

Texas is establishing one of the nation's most comprehensive frameworks for the use of Artificial Intelligence. This law primarily focuses on how state agencies use technology and sets ethical standards for the private sector.

• Ethics Council: The law establishes the Texas Artificial Intelligence Council to oversee the implementation of AI and ensure it is used without "unlawful discrimination."
• Public Disclosure: Government agencies are now required to disclose whenever a consumer is interacting with an AI system rather than a human representative.
• The "Sandbox": It also creates a regulatory "sandbox" where companies can test innovative AI products under state supervision to ensure they meet safety and privacy standards.

3. $125,000 Business Inventory Tax Exemption (HB 9)

Following a constitutional amendment approved by voters, House Bill 9 provides a massive property tax break for Texas business owners.

• The Change: Previously, business inventory (personal property used to produce income) was only exempt if valued under $2,500. Starting January 1st, that exemption jumps to $125,000.
• Broad Impact: This change will eliminate the "inventory tax" entirely for thousands of small and mid-sized businesses across the state, specifically benefiting retailers, manufacturers, and wholesalers.

4. Mandatory ICE Cooperation for Sheriffs (SB 8)

Senate Bill 8 significantly expands the requirements for local law enforcement regarding federal immigration enforcement.

• The Mandate: All Texas sheriffs are now required to formally cooperate with U.S. Immigration and Customs Enforcement (ICE) through "287(g)" agreements.
• Enforcement: Under these agreements, local jailers are authorized to perform certain functions of federal immigration officers, such as questioning inmates about their legal status and serving federal administrative warrants within the jail facility.
• Scope: While a previous version of the bill focused on larger counties, the final law applies to all 254 counties in Texas.

5. Streamlined Squatter Eviction Process (SB 38)

Landlords and property owners gain new tools to deal with unauthorized occupants under Senate Bill 38. This law creates a fast-track adjudication process specifically for squatter cases.

• Faster Removal: The bill allows property owners to file a sworn complaint with local law enforcement to quickly remove a squatter, rather than waiting months through the traditional eviction court process.
• Adjudication: Civil courts must now prioritize these cases, aiming to resolve ownership and occupancy disputes in a fraction of the time previously required.

Additional 2026 Updates

Beyond these five laws, Texas is also extending its Franchise Tax Credit for Research and Development (R&D). Under Senate Bill 2206, the credit for qualified research expenses increases from 5% to 8.722%, providing a permanent incentive for tech and manufacturing companies to keep their research facilities within the state.