Texas Comptroller Don Huffines has signed an executive order directing his office to propose an amendment that would remove marketplace and platform fees from taxable data processing services.
The move marks a significant reversal of the comptroller’s previous approach, which had drawn widespread criticism from businesses operating across online platforms and gig economy sectors.
Under the prior interpretation, commissions charged by marketplace providers could themselves be classified as taxable data processing services, even where sales tax was already collected on the underlying transaction.
The practical consequence was a potential tax burden reaching as much as 130% of a marketplace sale, with tax applied to both the full value of the underlying sale and the platform’s commission.
The previous leadership of the comptroller’s office formalised that position in 2025 by amending Rule 3.330, providing that marketplace provider services may constitute taxable data processing services when involving computerised entry, retrieval, search, compilation, manipulation, or storage of data.
That reading meant a seller paying fees to platforms such as Amazon, eBay, or Etsy faced a separate tax on those fees, on top of any sales tax the customer paid on the purchase itself.
The same double taxation applied to restaurants paying commissions to DoorDash, Grubhub, or Uber Eats, as well as families listing spare bedrooms through short-term rental platforms.
The tax treatment also hit gig economy workers directly, affecting ride-share drivers, dog walkers, and workers providing errand, furniture assembly, and similar services through online platforms.
The Huffines executive order now directs the agency to publish a proposed amendment to Rule 3.330, formally removing marketplace and platform fees from the definition of taxable data processing services.
Once filed with the Texas Secretary of State and published in the Texas Register, the proposed amendment will enter a 30-day public comment period before any changes are finalised.
Huffines made the announcement at the Texas Comptroller of Public Accounts Annual Briefing, an event attended by industry members, associations, tax practitioners, and consultants.
The reform is expected to bring meaningful relief to businesses and workers across online retail, food delivery, ride-sharing, short-term rentals, pet care, and other platform-dependent sectors throughout Texas.