Texas Sales Tax Change: Online Marketplace Sellers Face New Fees on eBay, Poshmark, and Etsy
Texas online sellers are seeing a major policy shift that could affect their bottom line. As of today, Texas will begin charging sales tax on online marketplace fees, impacting anyone who sells on platforms like eBay, Poshmark, or Etsy. While customers already pay sales tax on their purchases, sellers will now owe tax on listing fees, commissions, and service charges—fees that can reach 15% or more on some platforms.
Why Texas Is Taxing Marketplace Fees
The new rule comes from a recent reinterpretation of state tax law by former Texas Comptroller Glenn Hegar. In 2023, his office reclassified online marketplaces as “data processing services,” which are subject to Texas sales tax rates of up to 8.25%. Because state law only taxes 80% of data processing charges, sellers will receive a 20% exemption, but most will still see a noticeable increase in their selling costs.
Hegar explained that the law dates back to 1987—long before e-commerce existed—but still applies to modern online platforms. “My job is to collect taxes fairly,” he wrote in the Austin American-Statesman.
Delayed Implementation, No Legislative Fix
Hegar postponed enforcement until October 1 to give the Texas Legislature time to respond, but lawmakers took no action. Hegar has since stepped down to become chancellor of the Texas A&M University System, leaving former state senator Kelly Hancock as interim comptroller.
KUT News has requested revenue projections from the comptroller’s office, but no estimate has been released.
Industry Groups and Small Businesses Push Back
The policy drew immediate objections from:
- Small business owners
- eCommerce brands
- Texas Taxpayers and Research Association (TTARA)
- Texas Association of Broadcasters (TAB)
Many argued the comptroller was expanding the tax base without legislative approval. Some warned that defining online marketplaces as “data processing services” could eventually allow Texas to tax a much broader range of professional services.
Small business owners say they already struggle with rising online marketplace fees, and this new tax will be another hit to their margins. Asha Kangralkar, founder of Dallas-area cookware company Avacraft, testified that the tax could make it harder for Texas entrepreneurs to compete online.
How the New Sales Tax Affects eBay, Etsy, and Poshmark Sellers
The new tax applies to:
- Listing fees
- Marketplace commissions
- Payment processing fees
- Any fee classified as a data processing service
While Poshmark and Etsy have notified sellers, many online entrepreneurs expressed confusion and frustration on social media. For people who sell thrifted clothes, handmade goods, or collectibles, even small fee increases can reduce the profit of low-margin sales.
eBay, however, has not yet issued an official update to sellers.
Growing Concerns Among Texas Online Sellers
Resellers say this is yet another cost added to a long list of platform fees. Justin Glow, a San Antonio native and popular YouTube creator focused on eBay reselling, noted that whether someone sells casually or full-time, “it definitely can feel like there’s fees coming at you from all directions.”
What Texas Sellers Should Know Next
As this rule takes effect, Texas sellers should:
- Review updated fee structures on eBay, Etsy, and Poshmark
- Adjust pricing strategies to offset the new tax
- Monitor announcements from the Texas Comptroller’s Office
- Consider tax guidance to ensure compliance
Texas Sales Tax Online Marketplace Sellers Fees on eBay Poshmark Etsy