Texas Comptroller to Rescind Tax on Marketplace Fees
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On September 30, 2026, Texas Comptroller Don Huffines, signed an executive order that instructed his agency to draft an amendment to 34 Tex. Admin. Code § 3.330 (“Rule 3.330”) to remove marketplace and platform fees from the definition of taxable data processing services. This action will reverse a 2025 interpretation that expanded the definition of taxable data processing services to include marketplace and platform fees.
How Rule 3.330 Started Taxing Marketplace Fees
Effective October 1, 2025, under the previous leadership of Comptroller Glenn Hegar, the Texas Comptroller’s Office amended Rule 3.330 by expanding the definition of taxable data processing services to include fees charged by marketplace platforms to marketplace sellers. This amendment ultimately resulted in taxing the same fee twice: first, as part of a taxable retail sale the marketplace platform makes to the customer, and second, as part of the data processing fee charged by the marketplace platform to the seller.
In protest of this change, the Texas Taxpayers and Research Association and other business groups argued that the agency had expanded the tax base beyond what the Legislature authorized back in 1987, when the data processing tax was written for mainframe data entry, not digital marketplaces.
What’s Changing for Amazon, DoorDash, and Other Platforms
Comptroller Huffines has referred to the 2025 interpretation as “tax invention” rather than tax policy. As a result, he issued an executive order directing the agency to publish a proposed amendment to Rule 3.330 to remove marketplace and platform fees from the definition of taxable data processing services.
According to the Comptroller’s office, the proposed change would end the tax on platform fees tied to:
- Online marketplace sellers (Amazon, eBay, Etsy)
- Food and grocery delivery apps (DoorDash, Grubhub, Uber Eats)
- Short-term lodging platforms
- Ride-hailing and transportation
- Vehicle rental or sharing
- Pet care and pet-sitting apps
- Household, personal, and errand-running services
When Will the Rule 3.330 Amendment Take Effect?
The proposed amendment will be filed with the Texas Secretary of State and published in the Texas Register, followed by a 30-day public comment period. Impacted businesses should pay close attention to the developments and consider commenting during the public comment period.
The current version of Rule 3.330 — including the 2025 marketplace-fee interpretation — remains in effect until a final amendment is officially adopted. Businesses should continue collecting and remitting tax under the current rule until a final amendment is adopted.
It is important to emphasize that this amendment only covers marketplace and platform fees. However, Comptroller Huffines has indicated that his office will continue to review how taxable data processing services are interpreted and may propose additional changes in the future.
KBF will continue to monitor the rulemaking process and will share further updates as they are released. For additional information on how these changes or other state and local tax laws may affect your business, please contact KBF’s state and local tax team.