Texas Comptroller Acts to Reverse a Year-Old Seller Fee Tax
Texas Comptroller Don Huffines signed an executive order on September 30, 2026 directing his office to amend Rule 3.330, which has classified certain online marketplace services as taxable data processing since 2025. The proposed change would remove that classification entirely and clarify that fees charged to sellers for listing, offering, or facilitating sales are not taxable data processing or information services. If finalized, the repeal would eliminate a cost that has quietly reduced net payouts for Etsy, eBay, Amazon, and Poshmark sellers in Texas for roughly a year.
Texas has taxed data processing services since 1987, but former Comptroller Glenn Hegar's administration expanded Rule 3.330 in 2025 to explicitly cover activities performed by online marketplaces. Hegar defended the move as an application of existing law to modern platforms, arguing that a retail purchase and the marketplace services provided to the seller were two separate taxable transactions. He also pointed out that lawmakers declined to pass legislation exempting marketplace fees in 2023. Huffines now argues the prior administration went beyond what the Legislature intended, calling the tax "a hidden tax on small businesses that should never have been imposed."
Source: Value Added Resource
How Etsy, eBay, and Poshmark Handled the 2025 Rule
When the expanded rule took effect in October 2025, platforms responded unevenly. Poshmark notified Texas sellers in advance that it would begin deducting sales tax on its commissions starting October 1, 2025, making clear the charge was separate from the sales tax buyers paid on purchases. Etsy similarly warned sellers it would begin collecting Texas sales tax on certain fees in October, likely covering transaction and listing fees, though the company initially said it was still working with the state to determine exactly which charges applied. Etsy later updated its Payments Policy in December 2025 to add broader language allowing sales tax collection on seller fees where applicable and requiring sellers to keep location information current.
eBay took a different approach, providing no specific advance announcement to Texas sellers. Some discovered the additional tax only after it appeared in their transaction records. eBay subsequently updated its help documentation to clarify which seller fees were taxable in Texas, including Store subscriptions, insertion fees, and Final Value Fees. The uneven rollout left many small sellers without clear bookkeeping guidance at the moment costs changed, a recurring friction point when platform policy shifts faster than seller accounting software catches up.
What the Proposed Rule Change Would and Would Not Do
The executive order took effect immediately on September 30, but it only directs the agency to begin the formal rulemaking process. The order explicitly states that changes will not carry legal force until that process is complete, meaning marketplaces must continue following the existing rule for now. The Comptroller has scheduled publication of the proposed amendment in the Texas Register for October 16, with public comments accepted through November 15. The agency cautions that the final rule may differ from the proposal, and no final adoption date has been announced.
Critically, the order does not address whether sellers can recover amounts already collected, nor does it clarify whether the change will apply retroactively. Even if the state eventually allows refunds, the practical path is unclear for marketplace sellers whose taxes were deducted from earnings and remitted directly by the platforms. Huffines has stated that "ending this tax isn't a cost to government because this money never belonged to the government," but that framing does not resolve the mechanics of repayment.
The proposed amendment would also extend beyond e-commerce, affecting platform fees charged by food delivery, ride-sharing, short-term rental, and other app-based services.
What Sellers Should Watch For Now
For Etsy and eBay sellers doing ecommerce bookkeeping, the immediate practical reality is unchanged: Texas sales tax on seller fees continues until a final rule is published and adopted. Sellers who have been tracking these deductions in accounting software should continue doing so. The November 15 public comment deadline is the next concrete milestone, and the final rule language, which may differ from the current proposal, will determine the actual scope and effective date of any relief.
Final Thought: Texas sellers on Etsy, eBay, and Poshmark have paid sales tax on platform fees since October 2025, and while the Comptroller's September 30 order signals a clear intent to reverse that policy, the tax remains in effect until a final rule clears the formal rulemaking process, with no confirmed timeline or retroactive refund mechanism yet announced.