Texas Moves to End Sales Tax on Marketplace Seller Fees
Since October 1, 2025, Texas has treated the fees that online marketplaces charge sellers as a taxable "data processing service." On September 30, 2026, Texas Comptroller Don Huffines signed an executive order to reverse that. The catch: nothing changes until a formal rule amendment is adopted, so sellers who pay this tax should keep paying it for now. Here is what happened, the timeline, and what to do.
What changed in 2025
Texas has taxed data processing services since 1987. In 2025, under former Comptroller Glenn Hegar, the state amended its data processing rule (34 TAC Rule 3.330) to say that, effective October 1, 2025, "marketplace provider services may be included in taxable data processing services," according to Avalara (Oct 1, 2026). In practice, platforms began charging Texas sales tax on the fees they collect from sellers, such as commissions, listing and final value fees, and deducting it from seller payouts (Value Added Resource, Oct 10, 2026).
Critics called it a double tax: the shopper already pays sales tax on the item, and the seller then paid tax again on the marketplace's fee for the same sale.
What the new order does
- Directs a rule change. The September 30, 2026 order instructs the Comptroller's office to amend Rule 3.330 so that fees charged to sellers for listing, offering or facilitating sales are not taxable data processing (Value Added Resource; Foley & Lardner, Oct 5, 2026).
- Covers many platforms. Foley and Avalara list e-commerce marketplaces alongside food and grocery delivery, ride-hailing, short-term lodging, vehicle sharing, pet care and errand services. EcomCrew notes that for e-commerce sellers this includes seller fees on Amazon, eBay and Etsy.
- Is not a full repeal. According to EcomCrew (Oct 6, 2026), computer-based data storage, web hosting and website maintenance remain taxable.
- Comptroller's view. Huffines said: "The transaction fees charged by the marketplace providers are commissions, not data processing services."
Timeline
| Date | Step | Source |
|---|---|---|
| Oct 1, 2025 | Marketplace fees become taxable data processing under amended Rule 3.330 | Avalara |
| Sept 30, 2026 | Comptroller signs executive order to amend the rule | Foley, Avalara, Value Added Resource |
| Oct 16, 2026 (scheduled) | Proposed amendment published in the Texas Register | Value Added Resource |
| Nov 15, 2026 | 30-day public comment period ends | Value Added Resource |
| Not yet announced | Final adoption and effective date | — |
The Comptroller has cautioned that the final rule may differ from the proposal. None of the sources we reviewed say whether tax already paid will be refunded or whether the change will apply retroactively.
How much money is involved
Texas's state sales tax rate is 6.25%, and local jurisdictions can add up to 2%, for a maximum combined rate of 8.25%, according to the Texas Comptroller. Avalara notes that 20% of the charge for data processing services is exempt, so the tax applies to 80% of the fee. A worked example for a seller paying $10,000 in marketplace fees on Texas-taxable activity:
| Scenario | Taxable share of fees | Rate | Tax |
|---|---|---|---|
| State rate only | $8,000 | 6.25% | $500 |
| Maximum combined rate | $8,000 | 8.25% | $660 |
| If the amendment is adopted as proposed | — | — | $0 on marketplace fees |
Calculation: $10,000 × 80% × rate. Actual amounts depend on how each platform calculates and itemizes the tax and on your local rate; check your fee invoices and settlement reports.
What it means for sellers (our analysis)
Who is affected. Huffines framed the tax as putting Texas sellers at a "disadvantage against out-of-state competitors who don't pay it," so sellers based in Texas are the clearest group. If you are not sure whether platforms charge you this tax, look for Texas tax lines on your fee invoices or settlement reports.
Don't stop paying early. EcomCrew warns that a seller who stops accruing the tax based only on the announcement is exposed for the gap period. Platforms that collect it will keep doing so until the rule changes.
Keep records for a possible refund. Save invoices showing the tax charged since October 2025. If a refund route opens, you will need them.
Comment if it matters to you. Once the proposal is published, anyone can submit comments during the 30-day period.
The bigger lesson: state taxes can change how much you keep from a sale, even when the marketplace collects the sales tax for you. Our new US sales tax guide for marketplace and DTC sellers explains the basics.
How Atronia Innovations can help
We run Amazon, Walmart and TikTok Shop accounts and help clients read their fee and settlement reports, so changes like this don't go unnoticed. We work alongside your tax adviser rather than replacing one. Talk to our team.
Sources
- Avalara — Texas Comptroller ends data processing tax on marketplace fees (Oct 1, 2026)
- Foley & Lardner — Texas Comptroller's proposed amendment to eliminate double taxes on data processing services (Oct 5, 2026)
- EcomCrew — Texas is moving to kill the tax on your Amazon and eBay fees (updated Oct 6, 2026)
- Value Added Resource — Texas moves to reverse sales tax on marketplace seller fees (Oct 10, 2026)
- Texas Comptroller — Sales and use tax (accessed Oct 12, 2026)
