On September 30, Comptroller Don Huffines continued the implementation of his Taxpayer First Project with the signing of an executive order1 aimed at a tax Texans never voted for: sales tax on the fee a seller, a restaurant, or a gig worker pays a platform, stacked on top of the sales tax already charged on the purchase itself.
Essentially a hidden, double tax on marketplace and platform fees.
The order directs the agency to publish a proposed amendment to Rule 3.330, the data-processing rule, removing marketplace and platform fees from the definition of a taxable data-processing service. That proposal still has to be filed with the Secretary of State, printed in the Texas Register, and go through a 30-day comment period.
The tax got here not in the way you would expect: by interpretation, not by statute. The Legislature created the data-processing tax in 1987 for mainframes and clerks keying paper invoices into a database. A prior comptroller’s office then expanded the tax by rule. Amendments2 adopted in 2025, effective October 1, 2025, said marketplace services can be taxable data.
Under that reading, the state taxed the fee a seller pays Amazon, eBay, or Etsy; the fee a restaurant pays DoorDash, Grubhub, or Uber Eats; and the fee a family pays to list a spare bedroom. The same net caught ride-hail drivers, pet sitters, vehicle-sharing, and people running errands through an app.
Huffines commented in the announcement on the rule change, saying, “For the past year, small business owners across this state have been getting hit by a hidden tax nobody voted for. Groceries cost more. Rent costs more. Texans are tightening their belts, and the last thing they need is their own government quietly driving up prices.” He called the 2025 rule change an invention: “A Comptroller doesn’t get to invent new taxes by rulemaking any more than a judge gets to invent new crimes that aren’t on the books.”3
“Ending the hidden double tax on marketplace fees isn’t a cost to government. You can’t lose what was never yours. It’s money going back to the Texans who earned it. That’s how you make Texas affordable again” He added on X the afternoon of the announcement.4
But taxpayers and business owners need to keep making their voice heard.
First, taxpayers have to show up for the comment period. Watch the Texas Register, found HERE,5 and the Comptroller’s proposed-rule page, found HERE.6 Once the amendment is published, comments go to the Comptroller’s office for 30 days.
Second, a rule is not a statute. The next Comptroller can widen the net again. The durable fix is for the Legislature to say, in Tax Code, that a marketplace fee is not data processing.
If the amendment is adopted as described, the tax would come off marketplace fees and reduce the overall tax burden on Texans, resulting in a huge benefit to the economy and taxpayers, and help get Texas back on track to the path to prosperity.
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- https://comptroller.texas.gov/about/media-center/news/20260930-comptroller-don-huffines-ends-hidden-double-tax-on-texas-families-and-small-businesses-1790708719803 ↩︎
- https://www.sos.state.tx.us/texreg/archive/March282025/Adopted%20Rules/34.PUBLIC%20FINANCE.html) ↩︎
- https://comptroller.texas.gov/about/media-center/news/20260930-comptroller-don-huffines-ends-hidden-double-tax-on-texas-families-and-small-businesses-1790708719803 ↩︎
- https://x.com/DonHuffines/status/2105327316004163858 ↩︎
- https://www.sos.state.tx.us/texreg/index.shtml ↩︎
- https://comptroller.texas.gov/about/policies/rules.php ↩︎
