Texas Moves to Stop Taxing Marketplace Seller Fees and Raises Its Fast-Track Lawsuit Limit; New York Quadruples a Volunteer Credit

The bottom line today

The Texas comptroller has proposed to stop taxing the fees that online marketplaces charge the businesses selling through them, reversing a rule that took effect October 1, 2025 [1]. This is a tax cut, and Pratt welcomes it without qualification on the merits. A commission on a sale is a cost of selling. Taxing it as “data processing” put sales tax on what a seller pays to make a sale, and the state is now saying so in its own rule [1]. The one thing the proposal leaves unsaid is what happens to the year of tax already paid. New York, meanwhile, gave volunteer firefighters a bigger tax credit and handed a rare earth processor a modest, performance-based incentive [4, 5].

TX Texas 34 TAC §3.330: are marketplace seller fees subject to sales tax?

What it does. Texas taxes data processing services, defined as computerized work on data, from entry and search to compilation, manipulation and storage, on 80 percent of the charge after a 20 percent exemption [1]. A 2025 amendment to the comptroller’s rule added a paragraph saying that, effective October 1, 2025, “marketplace provider services may be included in taxable data processing services,” and gave as an example a marketplace that stores a seller’s product listings and photographs, keeps transaction records and compiles analytics [1].

The proposal deletes that paragraph and adds a new subsection (j). Under it, “a fee, commission, or other charge imposed by a platform provider, upon a platform seller for listing, offering, or facilitating sales through the platform” is neither a taxable data processing service nor a taxable information service [1]. That holds no matter how the fee is calculated, whether a sale happens, or whether the platform collects it directly or nets it out of the seller’s payout [1]. The comptroller’s preamble puts it plainly: platform transaction fees “are commissions, not data processing services” [1].

The definition of “platform” is deliberately wider than the statutory definition of a marketplace provider, because it covers platforms that facilitate sales of items that are not themselves taxable [1]. The rule’s examples include grocery and prepared food delivery, short-term lodging, ride-hailing, vehicle sharing, pet sitting, freelance and gig platforms, and tool, parking and storage rentals [1].

Where it stands. The proposal was filed October 5 and published in the Texas Register on October 16, with comments due within 30 days of publication [1]. The earliest possible adoption date listed is November 15 [1]. The new subsection takes effect on the date the amendment is adopted [1].

Pratt’s read. The comptroller’s chief revenue estimator projects state general revenue losses of $17.92 million in fiscal 2027, rising each year to $25.18 million in fiscal 2032, and local losses of $5.18 million in 2027 rising to $7.28 million in 2032 [1]. That money comes back to sellers: restaurants paying delivery-app commissions, hosts on lodging sites, small retailers on national marketplaces, contractors on gig platforms. The estimator says the change would benefit the public “by reducing costs and uncertainty for businesses,” and Pratt agrees [1].

Part of the cost falls on cities, counties and transit authorities, and the notice states it in dollars rather than burying it [1]. The proposal’s own notice does not offer a case for keeping the tax, and none is in the record this release draws on.

The open point is retroactivity. The 2025 paragraph has been on the books since October 1, 2025, and the new subsection applies only from adoption [1]. Sellers who paid tax on platform fees in the year between, and platforms that collected it, will want to know whether the comptroller treats the reversal as a correction or a change. The notice does not say.

TX Texas Rules 47 and 169: how much can be claimed in an expedited Texas lawsuit?

What it does. The Supreme Court of Texas raised the ceiling for its expedited actions process from $250,000 to $325,000 [2]. Rule 169 now applies to suits in which every claimant other than a counter-claimant pleads for only monetary relief aggregating $325,000 or less, excluding interest, statutory or punitive damages and penalties, and attorney fees and costs [2]. A party who sues under the rule cannot recover a judgment above $325,000, on the same exclusions [2]. Rule 47’s pleading categories move to match, so the bands now read $325,000 or less, over $325,000 up to $1 million, and over $1 million [2].

Where it stands. The court preliminarily approved the change on May 29, 2026, in Misc. Docket No. 26-9037, took comments, made no further changes, and gave final approval by an order dated October 2, effective immediately [2]. The order appeared in the Texas Register on October 16 [2]. The court’s comment says the change implements amendments to Government Code section 22.004(h-1) [2].

Pratt’s read. Business sits on both sides of this one. A company suing over an unpaid invoice of $300,000 can now use the faster track. A company being sued faces more cases on that track, but also a hard cap on what a plaintiff who chooses it can collect [2]. Raising the line by $75,000 is sensible housekeeping, and the court made no changes after comments [2]. The exclusions matter, though: attorney fees, interest and statutory damages sit outside the cap, so a $325,000 case can still produce a larger check [2].

NY New York A.6790-A / S.6233-A: volunteer firefighter credit rises to $800

What it does. The law raises the state personal income tax credit for active volunteer firefighters and volunteer ambulance workers from $200 to $800, and from $400 to $1,600 for married couples who both qualify, according to the governor’s office [4]. The office says the larger credit applies beginning in tax year 2027, and that a volunteer may claim either the credit or a qualifying local property tax exemption [4]. Under existing law, a credit larger than the tax owed is refunded, without interest [3]. Sen. Monica R. Martinez and Assemblymember Karen McMahon sponsored it [3, 4].

Where it stands. The Senate passed it June 1, 2026, substituting the Assembly’s A.6790-A, and the governor signed it as Chapter 313 on October 16, with an approval memo listed in the record [3]. The governor announced the signing October 17 [4].

Pratt’s read. The sponsor’s memo says the $200 credit dates to 2007, that the state has 20,000 fewer volunteer firefighters than it did 20 years ago, and that a firefighters’ association study puts the value of volunteer firefighters to the state at more than $4.7 billion a year [3]. That last figure is the business case. Every volunteer who quits is a shift that a fire district may one day have to pay for, and that bill lands on local taxpayers, businesses among them. The memo lists the fiscal impact as “TBD” [3]. Pratt would rather see a number. Still, an $800 credit is a cheap retention tool next to a paid department.

NY New York Excelsior credit: Phoenix Tailings brings a rare earth plant to Rochester

What it does. Empire State Development is offering Phoenix Tailings, a Massachusetts company, up to $3 million in performance-based Excelsior Jobs Tax Credits for a $375 million rare earth separation plant in a 500,000-square-foot building at Eastman Business Park in Monroe County [5]. The company has committed to at least 90 jobs, plans to start some operations in 2027 and expects full production in 2028 [5]. The governor’s office says the plant should separate about 18,000 tons of rare earth material a year [5].

Pratt’s read. By this column’s arithmetic, the state’s offer comes to about $33,000 per committed job, and the credits are paid only if the jobs show up [5]. That is the right structure. Washington is the bigger backer: a $500 million conditional loan commitment from the Department of War’s Office of Strategic Capital and a $66 million Department of Energy grant [5]. The release also mentions “broader statutory, local and infrastructure benefits” without a figure [5].

On the calendar

• Nov. 15: earliest date the Texas comptroller can adopt the marketplace fee amendment; comments are due within 30 days of the October 16 publication [1].
• Tax year 2027: New York’s larger volunteer credit begins, per the governor’s office, with claims on returns filed in 2028 [4].
• 2027: Phoenix Tailings plans to begin some operations at Eastman Business Park [5].