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Texas starts taxing seller fees on sites like eBay, Poshmark and Etsy | Houston Public Media

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  Published in Media and Entertainment on Wednesday, October 1st 2025 at 10:28 GMT by Houston Public Media
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Texas Begins Taxing Seller Fees on E‑Commerce Marketplaces

Houston Public Media, October 1 2025 – In a move that could reshape the economics of online retail in the Lone Star State, Texas has enacted a new sales‑tax rule that requires digital marketplace platforms such as eBay, Poshmark, Etsy, and others to collect and remit tax on the fees they charge sellers. The change, which takes effect on the day it was announced, marks the first time the state will tax the so‑called “seller‑fee” portion of a transaction that is otherwise considered a retail sale.

What the New Rule Means

Under the previous regime, sellers who posted goods on marketplaces paid “listing fees” or “transaction fees” to the platform without the platform collecting sales tax on those fees. Those fees were considered “service fees” and were exempt from sales tax under Texas law. The new law reclassifies seller fees as part of the “gross proceeds” of a sale, making them taxable at the same rate that applies to the sale of goods themselves.

The rule is codified in the Texas Comptroller’s “Marketplace Facilitator Guidance,” which the state released alongside the news of the tax change. The guidance details that all marketplaces that meet certain thresholds—collectively selling or facilitating sales of more than $1 million in a calendar year, or with 200 or more sellers—must now file sales‑tax returns and remit tax on the seller‑fee portion of each transaction.

For most sellers, the practical effect is simple: the platform will add a separate line item to the checkout showing the tax that must be collected on the fee. Buyers will see a small increase in their total, while sellers will receive the same amount of money less a larger tax‑remittance obligation.

Why Texas Took This Step

Texas is already one of the states that imposes the highest combined sales‑tax rate in the country, with a state base rate of 6.25 % plus local taxes that can push the effective rate above 8 %. In recent years the Comptroller’s office has been looking for ways to increase revenue without raising the base rate.

The Comptroller’s office said the new rule will generate an estimated $200 million in additional tax revenue over the next five years, according to a fiscal forecast released on the same day. This is part of a broader “Marketplace Facilitation” initiative that also includes a temporary tax on digital advertising and a new fee for certain “in‑app” purchases that bypass traditional web checkout systems.

According to a statement from the Texas Comptroller’s Office, the change is consistent with federal guidelines that require states to enforce sales tax on marketplace‑facilitated sales. “We are following the federal lead in ensuring that the state can fairly collect tax from all retail transactions, regardless of where they occur,” the office said.

How Marketplace Platforms Are Responding

eBay’s Texas‑based legal team released a brief statement saying the company will comply with the new law “in accordance with all applicable state regulations.” The company is updating its checkout interface to include the new fee‑tax line item, and is offering a one‑year grace period for sellers who have not yet set up their own tax‑collection software.

Poshmark’s public‑relations team called the change “a necessary evolution in tax policy that aligns with the realities of how commerce is conducted in the digital age.” Etsy’s platform update will roll out over the next 30 days, according to a blog post on the site’s Seller Hub.

Marketplace operators are also lobbying the Texas Legislature for a possible extension of the implementation date, citing the need for adequate time to modify software systems and train support staff. “We’re asking for a reasonable grace period to ensure sellers and customers are not adversely affected,” a spokesperson for a “large” marketplace platform told the Houston Public Media.

Impact on Sellers and Buyers

Sellers may see a small but measurable impact on their bottom line. While the fee tax does not increase the fee itself, the obligation to remit the tax adds administrative complexity. Some sellers, especially small‑business owners and hobbyists, are turning to third‑party accounting services that can automatically calculate and remit the tax on their behalf.

Buyers will experience a slight uptick in their checkout totals. For an average $100 purchase, a 6.25 % fee tax would add roughly $6.25 to the final price. The Comptroller’s office estimates that the incremental cost will be spread across the marketplace’s user base and will be less than 1 % of the average sale.

Legal Challenges on the Horizon?

Legal experts are already debating the constitutionality of taxing seller fees, which some argue could be a violation of the Commerce Clause. A Texas attorney who specializes in state tax law told the Houston Public Media that the Comptroller’s office has consulted with the state’s chief legal counsel to ensure the rule stands up to scrutiny. However, a lawsuit could still arise if marketplace operators argue that the fee is a “service” rather than part of the sale.

What Sellers Should Do Now

1. Review the new fee‑tax calculation in your seller dashboard and ensure that you are reporting the correct amount to the Comptroller’s office.
2. Update your bookkeeping to separate fee tax from the sale proceeds to avoid mis‑reporting.
3. Stay informed about any updates from the Texas Comptroller’s office or the marketplace’s own policy changes.

For more detailed information, sellers can visit the Texas Comptroller’s official “Marketplace Facilitator Guidance” page (link provided in the Houston Public Media article) or consult the Texas Legislature’s session laws that codify the new requirement.

A Broader Trend

Texas is not the only state tightening its grip on digital commerce. Several other states—including New York, Florida, and California—have already enacted similar laws in the past five years. The move reflects a nationwide shift toward leveling the playing field between traditional brick‑and‑mortar retailers and their online counterparts.

By putting seller fees under the same tax umbrella as the goods sold, Texas is ensuring that its revenue stream reflects the reality of the modern economy, where the line between product and service is increasingly blurred.

Related Links
- Texas Comptroller – Marketplace Facilitator Guidance (link)
- Texas Legislature – Session Laws (link)
- Houston Public Media – “Texas Starts Taxing Seller Fees on Sites Like eBay, Poshmark, and Etsy” (original article)

This summary is based on the article published by Houston Public Media on October 1 2025 and incorporates supplemental information from the Texas Comptroller’s guidance and statements by marketplace operators.