- The Texas Comptroller is now assessing marketplace providers on 130% of their sales, adding an additional 30% tax on the portion of the product sales price kept by marketplace providers.
- Texas adopted a marketplace law in 2019 that required marketplace providers to charge tax on 100% of the sales price for products sold over the platform by third-party sellers.
- The Texas Comptroller has decided to assess tax on 130% of marketplace sales, with the additional 30% a double tax on the portion of the sales proceeds paid to the marketplace provider as a commission.
- Texas is asserting, on audit, that commissions received by marketplace providers are taxable, contrary to a previous administrative ruling that was revoked in 2020.
- This change will have a negative impact on marketplace sellers in Texas, reducing their revenue and potentially causing them to lose money.
- The Texas Comptroller is enforcing its position by auditing marketplace providers and asserting deficiencies for failing to collect and remit the sales tax on commission payments.
- There are defenses to the Texas Comptroller’s audit position, as not everything that touches a computer is considered data processing.
- This issue is expected to make its way to the courts and could last for the next five years.
Source: insidesalt.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
