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ARTICLE · 13 OCTOBER 2026

Texas Comptroller Limits Application Of Controversial Data Processing Tax On Electronic Commerce Fees

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The Texas Comptroller has issued an executive order that fundamentally changes how data processing taxes apply to electronic commerce transactions, specifically targeting marketplace and platform fees that have been subject to controversial taxation. This policy shift addresses a longstanding issue where businesses faced potential double taxation on marketplace transactions, with both the platform fee and the underlying sale being taxed separately.

United StatesTax
Jay Adams
Jay Adams

The Texas Comptroller has signed an executive order adopting a narrower interpretation of the controversial data processing tax than previously applied by prior administrations to certain electronic commerce items, such as marketplace and platform fees. Under Comptroller Huffines' interpretation, taxes on marketplace fees, such as those paid for selling products on online platforms, app-driven food delivery services, and short-term rentals, will no longer be swept up in the over-broad net of “data processing.” The Comptroller's Office is directed by the Order to amend Rule 3.330 to reflect this change in policy. Although this is a positive step, all interested parties should review the proposed amendments to the Rule, and comment as appropriate.

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