2026 tax year · Texas
Marketplace seller taxes in Texas
Etsy, eBay, Shopify and the rest report your gross and withhold nothing. The gap between that and what you are taxed on is your costs, in Texas that gap is worth $5,937 in tax.
Take a driver who grossed $45,000 over 18,000 business miles. After mileage at 74.3 cents and the rest of the stack, worked through on the marketplace seller page $26,775 comes off and $18,225 is left as taxable profit. That profit is what Texas and the IRS charge against.
What that leaves you owing in Texas
| Self-employment tax | $2,575 |
| Federal income tax | $67 |
| Texas income tax | $0, no state income tax |
| Total tax | $2,642 |
| Effective rate on gross | 5.9% |
Earning more in Texas
A single filer taking the standard deduction, this work as the only income, the calculator above handles the other filing statuses. Miles rise with earnings, so the deduction rises too, and the effective rate on gross climbs more slowly than it would for someone whose income grew without expenses attached:
| Volume | Gross | Mileage off | Taxable profit | Texas tax | Total tax | Rate on gross |
|---|---|---|---|---|---|---|
| Part-time | $15,000 | $0 | $15,000 | $0 | $2,119 | 14.1% |
| Steady side income | $45,000 | $0 | $45,000 | $0 | $8,579 | 19.1% |
| Full-time | $72,000 | $0 | $72,000 | $0 | $14,803 | 20.6% |
Texas specifics that change the number
Texas is a community property state. In community property states, income earned during marriage is generally owned equally by both spouses. This affects QJV eligibility, MFS filing strategies, and retirement account contribution rules.
Texas does have a business tax, the franchise (margin) tax, but it spares most of the self-employed twice over: sole proprietors are not taxable entities at all, and an LLC owes nothing until annualized revenue passes the no-tax-due threshold, $2,650,000 for the 2026 and 2027 report years. Above it the rate is 0.375% for retail and wholesale, 0.75% for everything else. An LLC under the threshold still files a Public Information Report each year, a form, not a tax.
Selling into and out of Texas
Income tax follows you: Texas taxes your profit wherever the buyer was. Sales tax does not. Marketplace facilitator laws make the platform collect and remit sales tax on your behalf in most states, which is why a seller can have customers in all fifty and still file only one income tax return. Selling off-platform is where that stops being true.
On $18,225 of profit, what the states around Texas would charge:
| State | Its tax | vs Texas |
|---|---|---|
| Louisiana | $240 | +$240 |
| New Mexico | $603 | +$603 |
| Arkansas | $633 | +$633 |
| Oklahoma | $785 | +$785 |
- Louisiana would take $240 more, $240 against Texas's $0.
- New Mexico would take $603 more, $603 against Texas's $0.
- Arkansas would take $633 more, $633 against Texas's $0.
- Oklahoma would take $785 more, $785 against Texas's $0.
Marketplace seller tax questions in Texas
How much should a Texas seller set aside?
About 5.9% of gross on the $45,000 example, $2,642 across self-employment tax, federal income tax and nothing to Texas. In practice that means moving about $59 of every $1,000 payout into a separate account the day it lands, and sending roughly $661 to the IRS each quarter, no platform withholds any of this for you. Set aside from each payout rather than finding it in April.
Does the $45,000 on my 1099-NEC match what Texas taxes?
No. Texas taxes profit, not gross. After $26,775 of deductions the taxable figure is $18,225, so there is no Texas tax either way. But the federal side drops by $5,937. The form reports what the platform paid out, it knows nothing about your costs, and no one subtracts them for you. On this example 60% of the gross never becomes taxable income, but only for the seller who kept the records to prove it.