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Glenn Hegar
Texas Comptroller of Public Accounts
Glenn Hegar
Texas Comptroller of Public Accounts
Glenn Hegar
Texas Comptroller of Public Accounts

taxes

Marketplace Providers and Marketplace Sellers

A marketplace is a physical or electronic store, internet website, software application, or catalog that marketplace sellers use to make sales. A marketplace provider is an entity that owns or operates a marketplace and processes sales or payments for marketplace sellers. Examples include Amazon, eBay, Walmart Marketplace, and Etsy. A marketplace seller is an individual who sells through a marketplace provider.

Marketplace Providers

Sales Tax

Marketplace providers engaged in business in Texas must collect, report and remit state and local sales and use tax on all sales made through a marketplace. Marketplace providers are required to certify to marketplace sellers that they will collect sales and use tax on their behalf.

Marketplace providers must keep required records for at least four years.

How to Get a Texas Tax Permit

Sellers may apply for a tax permit

For more information about reporting requirements, recordkeeping requirements, due dates and other sales tax-related topics, visit our Sales and Use Tax webpage.

Franchise Tax

A marketplace provider that is a taxable entity (corporation, partnership, limited liability company, etc.) must report and remit franchise tax if it has physical presence or economic nexus in Texas. A foreign taxable entity (i.e., out-of-state entity) with a Texas use tax permit is presumed to have nexus in Texas and is subject to Texas franchise tax.

Each taxable entity with nexus must file a Franchise Tax Report (No Tax Due, EZ Computation or Long Form), and an Information Report (Public Information Report or Ownership Information Report) and pay any franchise tax due.

Prior to Jan. 1, 2019, a foreign taxable entity’s nexus begins on the date the taxable entity has physical presence in Texas. On or after Jan. 1, 2019, a taxable entity’s nexus begins on the earliest of

  • the date the entity has physical presence;
  • Jan. 1, 2019, if the entity obtained a use tax permit prior to that date;
  • the date the entity obtains a Texas use tax permit if obtained on or after Jan. 1, 2019; or
  • the first day of the federal income tax accounting period in which the taxable entity had gross receipts from business done in Texas of $500,000 or more.

Marketplace Sellers

Sales Tax

As a marketplace seller, you are not responsible for collecting and remitting sales and use tax on your sales through the marketplace if the marketplace provider has certified they are assuming these responsibilities. If the marketplace provider does not issue any type of certification that it is collecting sales and use tax on your behalf, then you should collect sales and use tax until you receive a certification.

If you are a Texas seller and sell through a marketplace, you are still responsible for having a Texas tax permit and filing your sales and use tax returns timely. This is true even if your only sales are through a marketplace provider.

Remote sellers that only sell through a marketplace provider that has certified they will collect sales and use tax on your behalf are not required to hold a Texas tax permit. However, you must keep required records of your marketplace sales for at least four years.

Franchise Tax

A marketplace seller that is a taxable entity (i.e. corporation, partnership, limited liability company, etc.) must report and remit franchise tax if it has physical presence or economic nexus in Texas. A foreign taxable entity (i.e., out-of-state entity) with a Texas use tax permit is presumed to have nexus in Texas and is subject to Texas franchise tax.

Each taxable entity with nexus must file a Franchise Tax Report (No Tax Due, EZ Computation or Long Form), and an Information Report (Public Information Report or Ownership Information Report), and pay any franchise tax due.

Prior to Jan. 1, 2019, a foreign taxable entity’s nexus began on the date the taxable entity had physical presence in Texas.

On or after Jan. 1, 2019, a foreign taxable entity’s nexus begins on the earliest of:

  • the date the entity has physical presence;
  • Jan. 1, 2019, if the entity obtained a use tax permit prior to that date;
  • the date the entity obtains a Texas use tax permit if obtained on or after Jan. 1, 2019; or
  • the first day of the federal income tax accounting period in which the taxable entity had gross receipts from business done in Texas of $500,000 or more.

Additional Resources

HB855 Browser Statement

In 2015, the Texas Legislature passed House Bill 855, which requires state agencies to publish a list of the three most commonly used Web browsers on their websites. The Texas Comptroller’s most commonly used Web browsers are Google Chrome, Microsoft Internet Explorer and Apple Safari.

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