As Texas continues to grow and evolve, small businesses in the state are facing new challenges and opportunities following the conclusion of the 2025 legislative session. The Texas Legislature, which convened earlier this year, passed a range of laws affecting small business owners, from changes to tax policy to labor laws. These legislative decisions have already begun to shape the business landscape in the state, and business owners are working hard to adapt to these changes.
Key Legislative Changes
Among the most impactful pieces of legislation passed during the 2025 session is a set of new rules that impact the state’s growing gig economy. The legislature has introduced stricter regulations for gig workers, including drivers for companies like Uber and Lyft, and freelance workers in industries such as technology, marketing, and content creation. Under the new laws, gig workers are now entitled to certain benefits, including access to health insurance and paid leave. This move was widely praised by workers’ rights advocates but has also raised concerns among small business owners, particularly in the service industry, about the increased financial burden these changes could bring.
Additionally, there were significant changes made to Texas’ sales tax laws. The legislature passed a bill that expands sales tax exemptions for a number of industries, including manufacturing and research and development, while also offering some relief to small businesses in the retail sector. The new tax structure aims to provide an economic boost to businesses that have faced rising costs in recent years, such as those involved in manufacturing or construction.
Another important law that passed in the 2025 session relates to property taxes, which are often a significant expense for Texas business owners. A new measure introduces a cap on annual property tax increases for businesses with commercial properties in certain areas, protecting owners from sudden and unpredictable hikes that can disrupt cash flow. For small business owners who rely on their physical storefronts, this legislation provides much-needed relief from escalating property costs.
Challenges and Opportunities for Small Business Owners
While many small business owners in Texas welcome the relief from tax burdens and increased protections for gig workers, there are some concerns about how these changes will be enforced and whether businesses can absorb the added costs.
The state’s small business community has expressed both optimism and trepidation. According to a report by the National Federation of Independent Business (NFIB) Texas chapter, while the new property tax caps are a positive step, some business owners are concerned about rising insurance premiums and ongoing supply chain disruptions, particularly for retailers and restaurants.
“It’s definitely a double-edged sword,” says David Mendoza, a small business owner in San Antonio who runs a popular local bakery. “On one hand, these changes could help, but on the other hand, we’re seeing higher costs for ingredients, utilities, and even wages due to inflation. The tax breaks help, but they don’t cover everything.”
However, many businesses are also finding new opportunities in the changing regulatory environment. For instance, the newly enacted laws related to workplace safety have prompted companies to invest more in training programs, safety equipment, and employee well-being. This not only improves the quality of the workforce but also attracts new talent to Texas businesses.
Some of the small business advocacy groups, like the Texas Association of Business (TAB), are working to ensure that the needs of their members are heard in future legislative sessions. They are particularly concerned with ensuring that regulations are not so burdensome that they stifle the growth of new businesses. At the same time, they are optimistic about the long-term prospects of Texas businesses if the legislative changes can be implemented effectively.
Texas’ Growing Role in National Business
Texas has long been recognized as a business-friendly state due to its low taxes, relatively light regulatory environment, and robust economy. In 2025, these new legislative changes further cement the state’s role as a leader in fostering business growth. Texas has become one of the most attractive states for entrepreneurs and business owners, especially those in tech, manufacturing, and retail. Its population is growing rapidly, and with it, the demand for goods and services across the state.
As Texas moves forward, the business community is carefully watching the impact of the recent legislative changes. The state’s ability to adapt to shifting economic conditions, while maintaining a pro-business environment, will likely determine how small businesses fare in the coming years.
