Texas Small Businesses Celebrate the End of Tax on Online Marketplace Fees
AUSTIN (Sept. 30, 2026) — Texas small business owners today applauded Comptroller Don Huffines for ending the state’s taxes on marketplace fees tied to sellers offering products on platforms like Amazon, eBay, and Etsy. Comptroller Huffines signed an executive order directing the Comptroller’s office to amend Rule 3.330 and remove marketplace and platform fees from the definition of taxable data processing services.
Comptroller Huffines announced the change on Wednesday during the Texas Comptroller of Public Accounts Annual Briefing. “For the past year, small business owners across this state have been getting hit by a hidden tax nobody voted for,” Huffines said in his press release. “Groceries cost more. Rent costs more. Texans are tightening their belts, and the last thing they need is their own government quietly driving up prices.”
Online marketplaces like Amazon and Etsy charge third-party sellers commissions and other fees associated with selling through their platforms. Under the previous Comptroller’s interpretation of the Texas law, certain marketplace services were treated as taxable data processing services. That interpretation meant Texas sellers could face sales tax on 80% of qualifying marketplace charges. At the maximum combined state and local sales tax rate, a seller paying $10,000 per month in qualifying marketplace fees could face nearly $8,000 in additional tax each year.
“Comptroller Huffines’ decision will save my business thousands of dollars and lift a huge weight off my shoulders,” said Mohamad Sam, owner of Purifyou, a sustainable-products business based in Houston. “The tax really hurt our ability to compete with sellers from other states. I want to thank Comptroller Huffines for addressing these serious concerns and revising Rule 3.330.”
Texas small-business leaders have spent nearly 2 years raising concerns about the rule interpretation. Earlier this month, the Connected Commerce Council (3C) brought small business owners from across the state to Austin for a private roundtable with Comptroller Huffines, where they detailed how the tax was affecting their margins, hiring, and ability to compete. Following that meeting, the Comptroller said that his office would take a fresh look at the issue.
“Taxing marketplace fees gave me an impossible decision: pass the tax on to consumers and offer less competitive prices, or absorb the tax and invest less in my business. Either option hurts our bottom line,” said Robert Strong, owner of Austin-based Pretty Thai, a specialty sauces and spices brand. “Comptroller Huffines’ decision is a win for Texas small businesses, giving us the confidence to compete with out-of-state businesses and continue offering competitive prices for consumers.”
“This is exactly why small business voices need to be part of policy decisions,” said 3C Executive Director Rob Retzlaff. “Texas sellers came to Austin with real numbers showing what this tax would mean for their businesses. Comptroller Huffines listened, his team took the issue seriously, and today’s action delivers meaningful relief for businesses across the state.”
