Texas Moves to Drop Sales Tax on Marketplace Fees

Texas Comptroller Don Huffines signed an executive order on September 30 directing his agency to stop taxing marketplace seller fees as data processing services.

If you run a high-ticket Shopify store and also list products on Amazon, eBay, Etsy or Walmart, those platforms have been adding Texas sales tax on top of your commissions, listing fees and ad charges since October 1, 2025. The change is proposed, not final, but it decides whether a line item on every marketplace statement keeps eating your margin.

At Ecommerce Paradise I cover this from the store-owner side: what Texas actually changed, how it got here, what it is worth to a seller, and the five things I would do before the rule is final. If you are new to the model, start with my guide to high-ticket dropshipping. Everything below is reported information plus my opinion. I am not a CPA or a lawyer, so run any filing decision past one.

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Texas Comptroller Orders End to Tax on Marketplace Fees

Huffines told his agency to amend Rule 3.330 so that marketplace and platform fees no longer count as taxable data processing, according to the Texas Comptroller’s September 30 announcement. His line in the release was blunt: “That’s not tax policy. That’s tax invention.” The office describes the current treatment as a “hidden double tax,” because the platform’s fee is taxed and the customer also pays sales tax on the product itself.

The carve-out is not limited to retail. Per the announcement, it covers seller commissions on Amazon, eBay and Etsy, plus food delivery, short-term rental listings, ride-sharing, vehicle rentals, pet care and household services. For a seller, the fee types at stake are referrals, listings, storage, advertising, fulfillment and transaction processing.

The order itself changes nothing yet. Inside SALT reported that the executive order does not amend the rule. The comptroller’s office must file a proposed amendment with the Texas Secretary of State, publish it in the Texas Register, and then take comments for 30 days. No comment deadline or effective date has been set.

Here is the baseline. Under the rule that took effect October 1, 2025, marketplace provider services count as data processing. Per Grant Thornton’s April 2025 alert, 20% of the amount charged for data processing services is exempt, so about 80% of the fee is taxable. Writing on September 9, 2025, TaxCloud put the rate at 6.25% state plus local tax, up to roughly 8.25% combined, and noted that marketplaces collect and remit it while sellers bear the cost.

Huffines was sworn in on August 1, 2026, per State and Local Tax coverage of the reversal. The same report says marketplace providers that paid tax on these fees may be able to pursue refund claims within four years of payment. It also flags what the announcement leaves open: whether the comptroller will change its treatment of other tech-enabled services or drop the “ancillary test” it adopted in 2025.

How Texas Came to Tax Amazon, eBay and Etsy Fees

The rule traces back to a 1987 definition of data processing. Huffines’s office says that language was written for mainframe computing, not app-based platforms. Inside SALT reports the prior comptroller’s office began asserting from 2023 that marketplace commissions fit the definition anyway.

In April 2025 the agency finalized amendments, effective April 2, that replaced the old “essence of the transaction” standard with an ancillary test, per Grant Thornton. Data processing bundled into another service escapes tax if it lacks independent value and stays secondary. When data processing is the main event, the whole bundled charge is taxable. The amended rule named payroll processing, website maintenance and data migration as taxable examples, and it set October 1, 2025 as the start date for the marketplace provider provisions.

The counterpoint is the state’s own logic. The 2025 reading rested on the idea that marketplaces compute, store and manipulate seller data, which fits the statutory definition on its face. Huffines’s view is that this stretched an old rule over a new business model. None of the sources I read put a dollar figure on the revenue Texas would give up, so I cannot tell you how hard the state will defend the old position during the comment period.

States are not moving in one direction. On October 1 I covered Pennsylvania enforcing local sales tax on remote sellers, which adds compliance work, while Texas is trying to remove a layer. Refund fights are also a pattern this year. I wrote about one in the May 31 Paradise Report, when CBP would not refund tariffs.

What the Texas Fee Tax Means for High-Ticket Stores

My read is that this is a margin story, not a headline story. Most high-ticket operators I teach run the Shopify store as the main business and treat marketplaces as a second sales channel. That second channel is where this tax bites, and it bites on the fee, not the product.

Run hypothetical numbers. Say a seller pays $20,000 a month in marketplace fees that Texas treats as taxable. At 80% taxable and an 8.25% combined rate, the extra tax is $20,000 x 0.80 x 0.0825, or $1,320 a month. At a 7% to 10% net margin, which is the range I see on high-ticket stores, that tax equals the entire net profit on roughly $13,000 to $19,000 of monthly revenue. That is an invented example, not a reported figure, and your fee mix and local rate will differ.

Scale it down and the answer changes. At $3,000 a month in taxable fees, the same math is about $198 a month. My rule of thumb: below roughly $2,000 a month in Texas-taxed fees, do not spend a CPA’s hours chasing it. Above $5,000, which works out to about $330 a month or $3,960 over the twelve months since the rule started, a review pays for itself.

Notice the time limit on any refund. The tax only began October 1, 2025, so even a four-year window covers about one year of actual charges. Whether a seller, rather than the marketplace, can claim anything depends on how your accountant reads the refund rules. Treat it as an open question until a professional says otherwise.

The bigger lesson is channel dependency. Your own Shopify store has no marketplace commission to tax, and nothing in the reports I read says Shopify’s subscription falls under this change. Marketplaces rent you traffic and can reprice the rent through fees, policy and, here, state tax. My launch guide for high-ticket dropshipping in 2026 assumes the store is the asset and marketplaces are a supplement.

Bulky-goods sellers should pay attention, because that is where marketplaces keep investing. Walmart is building a $300M Ohio hub for furniture and TVs. Amazon is adding LTL labels for bulky sellers. More big-ticket volume on those platforms means more fee exposure per order, so the tax treatment matters more as you scale there.

If you are planning around Prime Big Deal Days on October 6, budget the fee tax into your promo pricing now. If you hold MAP pricing from a supplier, you cannot simply raise the shelf price to absorb it, which means the tax comes straight out of your margin. Dropship tools such as Inventory Source make it easy to push supplier catalogs to several channels, and that ease is exactly why you should price each channel on its own numbers.

Think in three scenarios. In the first, the rule is amended as announced, fees stop being taxed, and your margin on Texas-sourced marketplace orders improves by the amount of the old tax. In the second, the comment period drags or the final text is narrower than the announcement, so you keep paying and your pricing should assume the tax stays. In the third, a later comptroller or legislature revives the old reading, which is why I would not rebuild your whole channel mix around a one-time reprieve. Plan for the second scenario and treat the first as upside.

There is a bookkeeping angle too. If your books lump the tax into “marketplace fees,” you cannot tell what you paid, and you cannot support a claim later. My piece on why your payout is not your profit covers the same problem from the cash side.

Last, a caution I would give any seller. Do not assume your software stack is outside this rule. Grant Thornton lists website maintenance as taxable under the 2025 amendments, and the announcement does not say whether the ancillary test will survive. Ask your CPA about your subscriptions before you assume anything. If juggling channels, tax lines and suppliers is what keeps your store from growing, my team can build and run the store for you through the turnkey done-for-you service.

Not sure which channels are actually making you money after fees and tax? Walk through your numbers with me one on one. Get the coaching details →

Texas Marketplace Fee Tax: 5 Steps to Take This Month

Here are the five steps I would take before the proposed rule is published.

Pull twelve months of statements from every marketplace you sell on and find the Texas sales tax charged on fees since October 2025. Use A2X to split marketplace settlements into clean accounting entries.
Keep the tax on its own line in your books. Synder can sync marketplace data into accounting software. Your accountant may already use QuickBooks, which handles the split fine.
Keep paying and remitting exactly as you do today. Sources I read say to treat the order as a signal, not a change in the law, until the amended rule takes effect.
Watch for the proposed rule on the Texas Comptroller’s news page and in the Texas Register, then mark the 30-day comment window on your calendar. Book a refund-eligibility conversation with your CPA, and if you want a second pair of eyes on your channel mix, grab a slot at my discovery call page.
Rebuild your per-channel margin with the tax included, then reprice or pull SKUs that no longer clear your target. Finaloop gives ecommerce owners profit by channel. Hold any tax reserve or future refund in a separate Mercury account so it never blends into operating cash.

If your accounting tool choice is still open, my comparison of the best accounting software for ecommerce in 2026 lays out the options. For invoicing and basic books, FreshBooks is another route.

Frequently Asked Questions

Is Texas still taxing marketplace fees today?
Yes. The executive order directs a rule change but does not amend Rule 3.330, per Inside SALT, so the 2025 treatment stays in place until a final amended rule takes effect.

How much of a marketplace fee is taxed in Texas right now?
About 80%, because 20% of data processing charges is exempt per Grant Thornton. Add the state rate of 6.25% plus local tax, up to roughly 8.25% combined per TaxCloud, and a $1,000 fee carries about $66 of tax, a hypothetical example.

Does this change affect my Shopify store?
The reports I read name marketplaces, not Shopify subscriptions. Ask your CPA how your software subscriptions are treated, because the comptroller has not said what happens to the ancillary test. If you want a store you control, start with my high-ticket niches list. The free niches lead magnet is the quickest way in.

Can I get a refund of tax already paid on fees?
State and Local Tax coverage says marketplace providers that paid may be able to claim refunds within four years. Whether a seller can recover anything depends on the facts and the rules, so ask a tax professional before you file anything.

When will the new rule take effect?
Nobody has said. The comptroller must file a proposal, publish it in the Texas Register and run a 30-day comment period first, per the announcement coverage.

Should this change which payment tools I use?
Not directly, but a single processor failure hurts more when margins are thin. I wrote about building a backup payment plan. Disputes are the other margin leak, so read my guide to stopping chargebacks on high-ticket orders.

Where should I keep a tax reserve or a possible refund?
In its own business account, separate from operating cash. My Mercury application walkthrough shows the setup. Need a clean business address for the account? Read how to get a business address without renting an office.

Already have a store that works and want my team to scale it past marketplace fees? See the scaling service →

That is the Texas story as it stands. Subscribe to the YouTube channel for daily breakdowns. More breaking news coming through the day.

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Trevor Fenner

Trevor Fenner is an ecommerce entrepreneur and the founder of Ecommerce Paradise, a platform focused on helping entrepreneurs build and scale profitable high-ticket ecommerce and dropshipping businesses. With over a decade of hands-on experience, Trevor specializes in high-ticket dropshipping strategy, niche and product selection, supplier recruiting and onboarding, Google & Bing Shopping ads, ecommerce SEO, and systems-driven automation and scaling. Through Ecommerce Paradise, he provides free education via in-depth guides like How to Start High-Ticket Dropshipping, advanced training through the High-Ticket Dropshipping Masterclass, and fully done-for-you turnkey ecommerce services for entrepreneurs who want a faster, more hands-off path to growth. Trevor is known for emphasizing sustainable, real-world ecommerce models over hype-driven tactics, helping store owners build scalable, sellable, and location-independent brands.