On September 30, 2026, the Texas Comptroller signed an executive order directing his office to amend the sales tax data processing services regulation, 34 Tex. Admin. Code § 3.330. The proposed amendment would remove marketplace and platform fees from the definition of taxable data processing services. The amendment is only at the proposal phase and has not yet been adopted.
Background
The Comptroller’s executive order is in response to the previous leadership’s interpretation that marketplace and platform fees are taxable data processing services. Under this interpretation, fees that businesses pay to platforms to reach customers online became taxable as data processing services. Because such fees are subject to sales tax, one transaction can face double taxation: once on the underlying purchase and once on the marketplace and platform fees. Examples of this double taxation problem include seller fees on online marketplace platforms, fees imposed by food delivery platforms, and short-term rental listing fees.
What the Executive Order Does
The executive order directs the Comptroller’s office to publish a proposed amendment to Rule 3.330 removing marketplace and platform fees from the definition of taxable data processing services.
Fee Categories Covered by the Proposed Amendment:
- Sellers on third-party marketplace platforms
- Prepared food and grocery delivery
- Short-term lodging
- Ride-hailing and other transportation services
- Vehicle rental or sharing
- Pet care and pet-sitting
- Household, personal, and errand-running services
Procedural Next Steps
The proposed amendment will follow the standard Texas rulemaking process:
- The proposed amendment will be filed with the Texas Secretary of State.
- The proposal will be published in the Texas Register.
- A 30-day public comment period will follow, during which interested parties may submit comments to the Comptroller’s office.
Practical Takeaways
Marketplace platforms, sellers, restaurants, short-term rental hosts, gig workers, and other service providers affected by the 2025 interpretation should consider the following steps:
- Monitor the Texas Register for publication of the proposed amendment and note the comment period dates.
- Consider submitting comments during the 30-day public comment period to express support for or concerns about the proposed rule change.
- Review current sales tax collection and remittance practices for marketplace and platform fees, as well as any contractual provisions addressing tax obligations.
- Evaluate potential refund claims for taxes paid under the 2025 interpretation. The Comptroller’s announcement does not address retroactivity or refund procedures, so taxpayers should consult their tax advisors before taking any refund positions.
- Continue complying with current rules until the proposed amendment is formally adopted. The executive order does not change existing legal obligations during the rulemaking process.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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