Self-employed in Houston, TX: taxes and retirement for 2026

What consultants, freelancers, content creators, entrepreneurs, gig workers, tipped workers and tradespeople in Houston, TX need to know this year: local taxes, Texas income and estimated tax rules, and how to save for retirement without an employer plan.

Guides for Houston

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Houston local rules

Local income tax: No city income tax in Houston.
Business personal property tax (Texas local property tax): Business personal property such as equipment and inventory is subject to local property tax in Texas, but Texas voters approved a constitutional amendment in November 2025 that raised the business personal property tax exemption to $125,000, up from $2,500.
City business license: The City of Houston does not issue a general business license; only specific regulated activities need city permits or licenses.
Also worth knowing: Texas has no state income tax (https://comptroller.texas.gov/economy/fiscal-notes/industry/2025/small-biz-info), and Texas is not among the states with city- or county-level income taxes per the Tax Foundation's 2026 list (secondary source; no official Texas page stating this was found). A sole proprietor operating under a name other than their own files a DBA (assumed name) certificate with the county (https://www.houstontx.gov/obo/solutionscenter/four_main_business_requirements.html).

Texas rules that apply in Houston

State income tax (2026): Texas has no state income tax on wages or self-employment income. Texas has no personal income tax. Its constitution bans a tax on individuals' net income, including their share of partnership income (Art. VIII, Sec. 24-a), and a 2025 amendment also bans taxing individuals' capital gains (Sec. 24-b).
Texas franchise (margin) tax: Applies to LLCs, including a single-member LLC that files federally as a sole proprietor; a sole proprietorship with no liability protection is not covered. For 2026 and 2027 reports, an entity with total revenue at or below $2.65 million owes no tax and files only a Public Information Report or Ownership Information Report. Above that, rates are 0.75% (0.375% for retail and wholesale, or 0.331% with the EZ computation).
Minimum wage (2026): $7.25 an hour; tipped cash wage $2.13 an hour. Texas adopts the federal minimum wage of $7.25 (Texas Workforce Commission, https://www.twc.texas.gov/programs/texas-minimum-wage-law). Tipped employees (more than $20 a month in tips) can be paid a $2.13 cash wage if tips bring them to $7.25 (U.S. DOL table, last updated July 1, 2026).
Rideshare (TNC) driver independent contractor statute (Occupations Code 2402.114): A rideshare driver is an independent contractor for all purposes if the company does not set the hours the driver must be logged in, does not limit use of other rideshare apps or the driver's territory, does not restrict other work, and both sides agree in writing that the driver is a contractor. Enacted by H.B. 100 in 2017.
TWC marketplace platform rule (40 TAC 815.134(b)): Since April 29, 2019, a Texas Workforce Commission rule treats people who get work through a marketplace platform as not employed for state unemployment tax purposes if nine conditions are met. These include setting their own hours, being free to use other platforms, paying their own expenses and providing their own tools.

Questions

Is there a local income tax in Houston?

No city income tax applies in Houston. Texas has no state income tax on wages or self-employment income.

What local business taxes apply to self-employed self-employed people in Houston?

Business personal property tax (Texas local property tax): Business personal property such as equipment and inventory is subject to local property tax in Texas, but Texas voters approved a constitutional amendment in November 2025 that raised the business personal property tax exemption to $125,000, up from $2,500.

Do I need a business license to freelance from home in Houston?

The City of Houston does not issue a general business license; only specific regulated activities need city permits or licenses.

Do self-employed people in Texas pay state income tax?

Texas has no state income tax on wages or self-employment income. Texas has no personal income tax. Its constitution bans a tax on individuals' net income, including their share of partnership income (Art. VIII, Sec. 24-a), and a 2025 amendment also bans taxing individuals' capital gains (Sec. 24-b).

Are there other Texas taxes for self-employed self-employed people?

Texas franchise (margin) tax: Applies to LLCs, including a single-member LLC that files federally as a sole proprietor; a sole proprietorship with no liability protection is not covered. For 2026 and 2027 reports, an entity with total revenue at or below $2.65 million owes no tax and files only a Public Information Report or Ownership Information Report. Above that, rates are 0.75% (0.375% for retail and wholesale, or 0.331% with the EZ computation).

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Sources

Facts researched from official sources and independently re-checked; last verified October 2026, next scheduled review 2027-01-02. Educational information for 2026, not tax, legal or investment advice. Rules change; check the official sources listed and a tax professional for your situation. Gigaverse AI, Inc. is a financial technology company, not a bank, and not itself a registered investment adviser or broker-dealer.