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, 2023 | 30,503,301 | 2nd highest of 50 | 1 of 4 |
| GDP ($bn)Bureau of Economic Analysis, 2023 | 2355 | 2nd highest of 50 | 1 of 4 |
| Median household incomeUS Census Bureau, 2023 | $67,321 | 29th highest of 50 | 2 of 4 |
| Unemployment rateBureau of Labor Statistics, 2025 | 4.0% | tied 39th lowest of 50 | 4 of 4 |
| Foreign-born shareUS Census Bureau, 2023 | 17.2% | 8th highest of 50 | 1 of 4 |
| Property tax rateconfirm with the Texas legislature | 1.60% | 45th lowest of 50 | 4 of 4 |
| Deposit return window (days)confirm with the Texas legislature | 30 | tied 16th lowest of 50 | 2 of 4 |
| Eviction notice (days)confirm with the Texas legislature | 3 | tied 29th highest of 50 | 3 of 4 |
| Final pay deadline (days)confirm with the Texas legislature | 6 | tied 21st lowest of the 30 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: no37 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: no4 of 50 states answer the same way
Statistical figures: US Census Bureau (2023) · Bureau of Economic Analysis (2023) · Bureau of Labor Statistics (2025) · Small Business Administration (2023). Tax, wage, business and tenancy figures are recorded from state sources without a per-figure date — confirm anything you are about to act on with the Texas legislature.
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.
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Employment Laws
Texas labor regulations
Texas is an at-will employment state following federal FLSA standards. The state minimum wage equals the federal $7.25/hr. Texas does not mandate paid sick leave or paid family leave at the state level, though some cities passed local ordinances that were later preempted by state law.
| Law | TX Rule | Federal Floor |
|---|---|---|
| Minimum Wage | $7.25/hr (federal) | $7.25/hr |
| Overtime | After 40 hrs/week | FLSA: after 40 hrs/week |
| Paid Sick Leave | None (state law preempts city ordinances) | None (federal) |
| Paid Family Leave | None | FMLA: 12 weeks unpaid |
| Workers Comp | Not mandatory for private employers | Federal employees: yes |
| At-Will Employment | Yes | Default nationwide |
| Final Paycheck | Within 6 days if fired; next payday if resigned | Next regular payday |
| Meal Breaks | No state requirement | No federal requirement |
- Texas Commission on Human Rights Act (TCHRA) prohibits discrimination based on race, color, religion, sex, national origin, disability, and age 40+.
- Texas Whistleblower Act protects government employees reporting legal violations.
- Employers may not terminate employees for jury duty or voting.
- USERRA protections apply for military service members returning from deployment.
- Non-compete agreements are enforceable if reasonable in scope, geography, and duration (Tex. Bus. & Com. Code §15.50).
Sources: U.S. Department of Labor · NCSL 2025 · State labor agency
Landlord-Tenant Laws
Texas rental regulations
Texas has strong landlord-friendly laws with no rent control (preempted statewide). No statutory security deposit limit exists, though landlords must itemize deductions. Eviction requires only 3-day notice for non-payment.
| Topic | TX Rule |
|---|---|
| Security Deposit | No statutory limit — any amount the landlord sets |
| Deposit Return | Within 30 days of move-out; itemized deductions required |
| Rent Control | Prohibited statewide (Tex. Property Code §214.902) |
| Eviction Notice (Non-Payment) | 3-day written notice to vacate |
| Late Fee Cap | No statutory cap (must be reasonable; often 10—12% of rent) |
| Repair & Deduct | Allowed after 7-day written notice if landlord fails to repair |
| Retaliation Protection | Yes — landlords cannot retaliate for lawful tenant complaints |
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 state income tax, making it one of the most business-friendly states. The franchise (margin) tax applies to businesses with revenue over $2.47M. LLC formation is $300 with no annual report required.
Step-by-step LLC formation
- 1Choose a business name — must include "LLC" or "Limited Liability Company"; check availability at sos.texas.gov
- 2File Certificate of Formation (Form 205) with the Texas Secretary of State online or by mail
- 3Pay the $300 non-refundable filing fee
- 4Designate a registered agent — must have a physical Texas address
- 5Get an EIN from the IRS — free at irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online
- 6Register for Texas Comptroller franchise tax at comptroller.texas.gov (required if revenue exceeds $2.47M)
- 7Open 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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