Small business owners across Texas are voicing concern over a proposed tax change that could significantly impact their finances.
The Texas Comptroller’s Office, under State Comptroller Glen Hager, has suggested modifying the tax code to impose taxes on the digital listing of products for sale on platforms like Amazon and Etsy. This proposal, while still under consideration, has sparked strong opposition from sellers who fear rising costs will harm their ability to compete in an already tight marketplace, Fox 4 reported.
Mohamed Sam, co-founder of Purifyou, a Houston-based company specializing in eco-friendly glass bottles, is one of the many small business owners concerned about the change, Fox 4 reported.
Sam and his wife built their business over the last decade, leveraging platforms like Amazon to reach customers worldwide.
“Platforms like Amazon kind of hand the globe to you on a silver platter,” Sam told Fox 4. However, this new tax could jeopardize that access. Sam argues that taxing digital listings amounts to “double taxation,” as customers already pay sales tax on their purchases, and sellers would now be taxed simply for listing their products.
Hager’s office maintains that the proposed rule merely clarifies existing tax obligations. According to the comptroller, the rapid expansion of the digital marketplace necessitates updated rules to ensure compliance with tax requirements.
However, business owners like Sam believe this adjustment unfairly targets small sellers who rely on affordable access to online platforms. Margins for these businesses are already shrinking due to increased competition, and the added burden of a new tax could force some sellers to scale back or close altogether.
The debate over this proposed tax underscores a larger issue: how state governments should adapt tax policies to the growing digital economy without stifling small business growth. While major corporations may have the resources to absorb new costs, small business owners argue they are more vulnerable to changes.
“We sell at, or in some cases, lower than we did 10 years ago,” Sam explained, noting that additional costs could accelerate the shrinking of already thin profit margins.
Hager acknowledged the concerns raised by sellers in a September op-ed, but pointed out that the Texas Legislature has not approved any exemptions to this tax. The comptroller suggested that the upcoming legislative session in January may offer lawmakers the chance to revisit the tax code and make adjustments.
In the meantime, Hager’s office emphasized that the rule is not expected to go into effect until after the session concludes, providing an opportunity for legislative oversight.