Texans who sell on platforms like eBay, Poshmark and Etsy will have to start paying a little extra to the state.
Starting today, Texas will collect sales tax on the fees online marketplaces charge sellers. Buyers already pay sales tax on their purchases. This new levy falls on listing fees, commissions and other platform charges. On eBay, those fees can total 15% or more of the combined sale and shipping costs.
The policy change stems from a reinterpretation of state tax law by former Texas Comptroller Glenn Hegar. Last year, his office reclassified online marketplaces as "data processing services," which are subject to sales tax of up to 8.25%. Texas law only taxes 80% of data processing charges, so sellers get a 20% exemption.
"When the Legislature imposed the sales tax on data processing services in 1987, the internet as we know it didn’t even exist," Hegar argued last September in an op-ed in the Austin American-Statesman. "Current tax law applies to online marketplaces just as it does to the traditional businesses within our communities, and my job is to collect taxes fairly."
Hegar said he delayed enacting until Oct. 1 the provision requiring marketplaces to charge sales tax on fees so the Texas Legislature would have "time to consider addressing the issue." But no laws were passed.
Hegar left the comptroller's office in July to become chancellor of the Texas A&M University System. Kelly Hancock, a former Republican state senator from the Dallas-Fort Worth area, is serving as interim comptroller. He's expected to run for the job in 2026 and to face what could be a competitive Republican primary.
KUT News reached out to the comptroller's office to ask questions including: How much revenue is the new tax expected to generate? A spokesman said he was working on providing a response.
When the rule was proposed in 2024, it drew opposition from industry lobby groups and small businesses.
Asha Kangralkar, the Dallas-area founder of a cookware company called Avacraft, told the comptroller at a hearing in December that the tax would harm small businesses like hers that try to sell their products through online marketplaces.
Business groups including the Texas Taxpayers and Research Association (TTARA) argued the comptroller was expanding the tax base in a way that could hit more than just resellers on eBay. They warned it could creep into a range of professional services redefined as "data processing" if any data is handled by a computer.
"TTARA is concerned that the new rule expands the sales tax base without a mandate from the legislature," the group's president, Jennifer Rabb, told KUT News.
The Texas Association of Broadcasters, of which KUT News is a member, also objected. TAB argued that search engine optimization and social media marketing were listed as taxable "data processing" without justification. The comptroller later agreed to remove those terms from the rule but said they would still be reviewed case by case.
Across the state, the tax has also frustrated people who resell thrifted clothes, flip collectibles or sell handmade goods online. As Poshmark and Etsy notified sellers about the change, irritation and confusion spread across Reddit threads and other social media about yet another fee hitting home-based businesses.
EBay has not sent an official notice to sellers. The company did not respond to a request for comment.
"Whether you're doing it clear out your closet ... or whether you're doing it as a full-time job, it definitely can feel like there's fees coming at you from all directions," Justin Glow told KUT News. Glow grew up in San Antonio and now lives in St. Louis, Missouri, where he runs a popular YouTube channel about reselling items on eBay.
"Having one other thing tacked on top of this just feels like death by a thousand cuts," Glow said. In a recent video about the Texas rule change, Glow calculated that if the Texas rule had applied to him last year, he would have owned an extra $450 on about $60,000 worth of sales.
"When you think it in perspective, it's not that big of a deal," Glow said. "But it's enough to notice, especially when it's for such a bizarre reason."
