Multi-state nexus and inventory accounting handled before they become assessments.
Online sellers accumulate tax obligations in states they have never visited, and their gross margin is only as accurate as their inventory accounting. We reconcile the platforms to the general ledger, determine where you actually have filing obligations, and keep cost of goods sold honest.
Annual in-state sales in many states; some also use a transaction count, and a few use higher thresholds.
Per platform, per settlement — the only way COGS and fees stay accurate.
Blended gross margin hides the products that lose money after fees and shipping.
Where e-commerce & online sellers lose money on accounting.
Economic nexus is triggered by sales, not by presence
Since Wayfair, most states impose a sales tax obligation once a seller crosses a revenue or transaction threshold in that state. Thresholds differ by state and are measured on different periods, so registration timing has to be tracked deliberately.
Marketplace facilitator rules do not cover everything
Amazon, Etsy, and Walmart collect and remit for marketplace sales, but direct Shopify or wholesale sales in the same state usually remain the seller's responsibility — and may still require a registration and a return reporting zero taxable marketplace sales.
Inventory is where e-commerce margin gets lost
Landed cost, freight in, duties, and platform fees belong in the right accounts. Sellers who expense inventory when purchased rather than when sold see a profit picture that swings wildly and a tax return that misstates income.
Deposits are net, books must be gross
Stripe, Shopify Payments, and Amazon settle net of fees, refunds, chargebacks, and reserves. Each settlement has to be decomposed into gross sales, discounts, refunds, and fees for the books to be usable.
What a e-commerce & online sellers engagement includes.
- Economic nexus study across all states with active sales
- Sales tax registration, filing calendar, and voluntary disclosure where exposure exists
- Shopify, Amazon, Stripe, and PayPal settlement reconciliation to the general ledger
- Inventory, landed cost, and COGS methodology (FIFO or weighted average)
- Section 471(c) small-business inventory election analysis
- Contribution margin by SKU and by channel
- Entity structure for sellers operating across multiple brands or platforms
E-Commerce & Online Sellers: direct answers.
Do I have to collect sales tax in states where I have no office?
Frequently yes. Economic nexus rules impose a collection obligation once your sales into a state exceed that state's threshold — commonly around $100,000 in annual sales, sometimes combined with a transaction count. Physical presence is no longer required, so the analysis is driven by your sales data state by state.
If Amazon collects sales tax for me, do I still need to file?
Often yes. Marketplace facilitator laws shift collection to the marketplace for sales made through it, but many states still expect a registered seller to file returns reporting those marketplace sales, and any direct-to-consumer or wholesale sales you make into that state remain entirely your responsibility.
How should e-commerce inventory be accounted for?
Inventory should be capitalized at landed cost — the product plus inbound freight and duties — and relieved to cost of goods sold when the unit sells, not when it is purchased. Certain small businesses may elect a simplified method under Section 471(c), but the election should be evaluated rather than assumed.
Why does my Shopify revenue not match my bank deposits?
Payment processors deposit net of processing fees, refunds, chargebacks, and any held reserve, and payout timing lags the sale. The books have to record gross sales with each deduction posted to its own account. Matching the deposit alone understates both revenue and expenses and makes gross margin meaningless.
Ready to work with a CPA firm that treats your finances like their own?
Schedule a complimentary consultation with Selim Hanna, CPA, and see how strategic advisory can protect and grow your business.