Texas SB 140 text message compliance for Small Businesses
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Starting September 1, 2025, a new Texas law called SB 140 is changing the rules for any business that sends marketing text messages to Texas residents. If you use SMS or MMS to promote your products or services, you need to pay attention. This law comes with serious penalties, but understanding the basics can help you stay compliant.
Here’s a plain-English guide for small business owners to help with text messaging compliance.
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What’s the Big Deal?
Many business owners don’t realize that Texas has long had strict telemarketing restrictions, with serious financial penalties for violations. Until now, those rules mainly applied to phone calls. In short, Texas now treats marketing text messages the same way it treats telemarketing phone calls. That means new rules and, for many businesses, a new requirement to register with the state.
Do I Need to Register My Business to Send Texts?
This is the most important question. You likely need to register with the Texas Secretary of State if you send promotional texts (like sales announcements, coupon codes, or new product alerts) to people in Texas unless you qualify for a specific exemption.
The registration process isn’t trivial. It requires:
- Filling out a detailed form (Form 3401)
- Paying a $200 annual fee
- Posting a $10,000 security deposit (via surety bond, letter of credit, or certificate of deposit)
- Disclosing corporate documents, financial institutions, personal information of company leaders, and even your marketing scripts
For small businesses, this can feel like a major burden. But the consequences of skipping it are worse.
What Are the Main Exemptions for Small Businesses?
The law has several exemptions, but two are most relevant:
- The “Current or Former Customer” Exemption
You might be exempt if you only text people who have actually purchased something from you before and your business has operated under the same name for at least two years.
Warning: The law doesn’t define “customer.” That means relying on someone signing up for a newsletter or abandoning a cart is risky. - The “Retail Store” Exemption
You might be exempt if you have a physical, brick-and-mortar store that’s been open at least two years and more than half of your sales happen in-person, not online.
If you’re not 100% certain you qualify, the safest bet is to register.
What Kind of Texts Does This Law Apply To?
SB 140 applies to marketing messages—texts meant to encourage someone to buy something.
It generally does not apply to purely transactional messages, such as:
- Appointment reminders
- Shipping and delivery notifications
- Order confirmations
- Password resets
Be careful with messages that do both. For example, a shipping update that also includes a coupon could be treated as marketing.
(Not sure about your reminders? Check our guide on transactional messages.)
What Happens If I Don’t Comply?
The risks are significant. Consumers can now sue businesses directly. Penalties include:
- Fines up to $5,000 per text message
- Treble damages (triple damages for intentional violations)
- Mandatory attorney’s fees (you could end up paying their lawyer)
Example of the Cost: Sending 500 promotional texts to old leads could expose you to $2.5 million in fines plus legal fees. For a small business, that’s devastating.
Even if you use a marketing agency or SaaS provider, you’re still responsible if they aren’t compliant. Liability cannot be delegated. P.S. 10DLC compliance is not enough.
The Bottom Line for Your Business
- Review Your Texts: Identify if you’re sending marketing texts to people in Texas.
- Check for Exemptions: Only rely on them if you clearly qualify.
- Register if Necessary: Don’t risk it—registration is far cheaper than a lawsuit.
- Get Help: This law is complicated. Don’t go it alone.
Want a deeper dive into the nuances? See our comprehensive SB 140 guide.
Affordable text message Compliance for Your Small Business
As a small business owner, you wear many hats. Let us take the compliance hat off your head. For a limited time, we’re offering a flat-fee Texas SB 140 Compliance Review for $1,500. We’ll check your processes and give you a clear, actionable plan.
Need ongoing support? Our Momentum Membership is perfect for small businesses. Get unlimited business and legal questions answered by email for just $95/month.
Book a free appointment today to protect your business before the law takes effect.
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