Texas Comptroller Don Huffines signed an executive order to reverse a tax interpretation that charged businesses for fees paid to online platforms like Amazon, DoorDash, and Uber Eats.
In 2025, the state had applied a data processing tax to marketplace fees — the costs sellers, restaurants, and service providers pay to reach customers through digital platforms. This resulted in the same transaction being taxed twice: once on the platform fee and again on the sale itself.
The tax affected diverse businesses: sellers on Amazon, eBay, and Etsy; restaurants using food delivery apps; short-term rental hosts; ride-share and vehicle rental services; and pet care and household service providers.
"For the past year, small business owners across this state have been getting hit by a hidden tax nobody voted for," Huffines said, noting that the data processing tax was originally created in 1987 for an era of mainframes and manual data entry. "That's not tax policy. That's tax invention."
The comptroller's office said small business owners reported the tax put them at a disadvantage against out-of-state competitors who do not pay it and made restaurants less financially stable. The executive order directs the Tax Commission to publish a proposed amendment to Rule 3.330 removing marketplace and platform fees from the definition of taxable data processing services. The proposal will be published for a 30-day public comment period.