Texas

The Problem

“In 2025, the Texas state legislature introduced HB 1681 and SB 265 regarding taxable data processing services. These bills would have protected Texas’s small businesses from a harmful new tax on the fees they pay online marketplaces. Without this protection, small businesses could face several serious consequences, including:

• Higher Costs: Marketplace sellers will be hit with a new tax on the fees they pay to online marketplaces like Amazon, eBay, Etsy, and Shopify. 
• Competitive Disadvantage: Sellers with a Texas billing address will face higher costs compared to out-of-state competitors selling to Texas consumers, who won’t need to pay the second tax.
• Online Business Penalty: Unlike brick-and-mortar stores that pay sales tax once, online sellers will be unfairly penalized for embracing digital tools that expand their reach.

Unfortunately, neither HB 1681 nor SB 265 advanced out of committee this session.”

What Happens Now? 

While this isn’t the outcome we hoped for, collective advocacy efforts from Texas small business leaders over the past few months sent a clear message: Small businesses are paying attention and are ready to speak up about policies that impact their success. 

We’re evaluating next steps and investigating whether the new tax will actually take effect, given that the governor is preparing to appoint a new comptroller at the end of the month. If this issue resurfaces under new leadership, we’ll be sure to notify you and share opportunities to re-engage.

SB 265 Sponsor: Senator Charles Perry

HB 1681 Sponsor: Representative Angie Button