Texas Comptroller Don Huffines signed an executive order on September 30, 2026, to eliminate what he called a “hidden tax” on fees charged by food delivery services, ride-hailing platforms, and online marketplaces. Huffines said the tax doubles up on costs for small businesses and consumers amid broader cost-of-living pressures. He announced the order at the Texas Comptroller of Public Accounts’ annual briefing, attended by industry representatives, tax professionals, associations, and consultants.
Current Rule and Proposed Change
Under the current Texas sales and use tax framework, marketplace and digital platform fees are treated as taxable data processing services. As a result, sales tax can apply both to the customer’s purchase and to the fees a platform charges third-party suppliers for facilitating the transaction.
In practice, third-party sellers on platforms such as Amazon, eBay, and Etsy may pay sales tax on marketplace fees, while customers pay sales tax on the goods they purchase. Similarly, Uber drivers may be taxed on platform fees for ride facilitation, and restaurants may pay sales tax on fees charged by food delivery platforms such as Uber Eats and DoorDash.
Huffines has proposed amendments that would eliminate tax on fees that e-commerce marketplaces and digital platforms charge third-party providers, including commissions, booking fees, and similar charges. The proposed changes cover marketplace sellers on platforms such as Amazon, eBay, and Etsy, as well as fees associated with food and grocery delivery, short-term accommodation rentals, ride-hailing, vehicle rentals and sharing, pet care, and household, personal, and errand-running services.
Conclusion
Comptroller Huffines presented the initiative as part of his Taxpayer First Project, which aims to improve fairness, transparency, and consistency in tax administration. More specifically, the aim is to remove sales tax on platform fees while leaving the tax treatment of the underlying transactions subject to the applicable rules.
The executive order directs the Texas Comptroller’s office to propose an amendment to Rule 3.330 of the Texas Administrative Code, excluding marketplace and digital platform fees from the definition of taxable data processing services. The proposed amendment will be filed with the Texas Secretary of State and published in the Texas Register, initiating a 30-day public consultation period during which the public can submit comments.
