Atlanta is one of the country’s major distribution hubs, and it has produced a large community of online sellers to match: Amazon FBA brands run from home offices in Decatur and East Atlanta, Shopify stores shipping from small warehouses near the airport, resellers, private label importers and makers selling across several marketplaces at once.
E-commerce businesses generate more transaction data than almost any other small business, and less of it is directly usable. A marketplace deposit is not revenue, a bank balance says nothing about inventory, and sales in one state can create tax obligations in thirty others. This guide covers the ecommerce accounting issues that matter most for online sellers in Atlanta.
A marketplace deposit is not revenue
Amazon, Walmart Marketplace, Etsy and similar platforms pay sellers net amounts. By the time money reaches the bank account, the platform has deducted referral fees, fulfillment fees, storage fees, advertising charges, refunds and sometimes a reserve, and it may have added reimbursements for lost or damaged inventory.
Recording only those net deposits understates sales and hides the real cost of selling. The accurate approach is to book each settlement period from the platform’s settlement report:
- Gross product sales and shipping charged to customers.
- Sales tax collected by the marketplace, which is not your revenue.
- Refunds and returns.
- Each category of platform fee, recorded as an expense.
- Reimbursements and adjustments.
- Reserves held back, recorded as a receivable until released.
Shopify and payment processor payouts need the same treatment. Integration tools can automate much of it, but someone should still reconcile each payout to the report behind it.
Inventory and cost of goods sold
For most product sellers, inventory is the largest asset on the balance sheet and cost of goods sold is the largest expense. Both are frequently wrong.
- Landed cost. Inventory cost generally includes the product itself plus inbound freight, customs duties and other costs necessary to bring it to its location and condition for sale. Sellers who expense freight and duties separately understate their product cost and overstate margins.
- Inventory in many places. Stock may sit in your own space, a third-party warehouse and several marketplace fulfillment centers at the same time. Periodic counts or reliable platform inventory reports are needed for each.
- Timing. Inventory is generally not deducted when purchased. It becomes cost of goods sold when it is sold. Businesses under the small business gross receipts threshold have some simplified options, which we cover in our post on whether a small business can deduct inventory when it buys it.
- Write-offs. Damaged, expired and unsellable stock should be written down when it is identified, with records of disposal.
Sales tax nexus: Georgia and every other state
Since the Supreme Court’s 2018 Wayfair decision, states can require remote sellers to collect sales tax based on economic activity alone. For online sellers, that turns sales tax into a multistate question.
- Georgia. Remote sellers are generally required to collect Georgia sales tax once they have more than $100,000 in Georgia sales, or 200 or more separate sales into the state, in the current or previous calendar year. A seller based in Atlanta already has physical presence in Georgia and generally must register and collect on taxable sales to Georgia customers.
- Marketplace facilitators. Georgia and nearly every other state with a sales tax require qualifying marketplaces such as Amazon to collect and remit tax on sales made through their platforms, although thresholds and rules vary by state. That generally covers marketplace sales, but not sales through your own website.
- Inventory in other states. Stock held in a fulfillment center in another state can create physical presence there, which may bring registration and income or franchise tax questions even when the marketplace collects the sales tax.
- Shipping charges. States differ on whether delivery charges are taxable. Your store settings need to follow the rules in each state where you collect.
Every state sets its own threshold and rules, so the analysis is best done state by state and revisited as sales grow. Our nexus review maps where registration is required, and our sales tax filing team handles the returns.
Form 1099-K and matching platform income
Marketplaces and payment processors report seller income to the IRS on Form 1099-K. The reporting threshold for third-party payment networks returned to more than $20,000 in payments and more than 200 transactions per year under the 2025 federal tax law, while payment card transactions are reported regardless of volume. The figure on a 1099-K is gross, before fees, refunds and sales tax, so it will almost never match the revenue on your return. It does not need to match. It needs to be reconcilable, with a clear bridge from the reported amount to your books.
Georgia items for Atlanta sellers
- Resale certificates. Inventory bought for resale can generally be purchased without paying sales tax by providing a properly completed resale certificate, in Georgia generally Form ST-5, to the supplier. See our guide to resale certificates.
- Inventory and property tax. Inventory held in Georgia on January 1 is generally reportable on the county business personal property return, and some sellers may qualify for local-option Freeport inventory exemptions, depending on the county, the type of inventory and a timely application.
- State income tax. Georgia taxes the business’s income through the owner’s return or at the entity level, depending on the entity type.
The numbers that actually run an online store
Total revenue says little about an e-commerce business. The measures worth tracking monthly are contribution margin by product after landed cost, platform fees and fulfillment; advertising spend as a share of total sales; return rates by product; and inventory turnover. Books built around those measures help sellers decide which products to reorder and which to discontinue.
Ecommerce accounting from our Atlanta office
Manay CPA’s Atlanta office works with Amazon sellers, Shopify brands and multichannel retailers. We provide monthly bookkeeping built from settlement reports, inventory and cost of goods sold reconciliations, and multistate sales tax compliance. Read more about our work in e-commerce, or see our explainer on the Shopify 1099 tax form.
Frequently asked questions
Does Amazon collect sales tax for me?
Generally yes, for sales made through Amazon in states with marketplace facilitator laws, which includes Georgia. It does not cover sales through your own website or other channels, and it does not by itself resolve registration or income tax questions created by inventory stored in other states.
Does inventory in an Amazon warehouse in another state create nexus?
It can. Inventory stored in a state is generally treated as physical presence there. The consequences vary by state and can include sales tax registration and income or franchise tax filing requirements.
Why doesn’t my 1099-K match my revenue?
Form 1099-K reports gross payments, before refunds, platform fees and adjustments, and it may include sales tax. Your books should reconcile the reported gross amount to the revenue and expenses on your return.
Can I deduct inventory when I buy it?
Generally inventory is deducted as cost of goods sold when it is sold, not when it is purchased. Small businesses under the gross receipts threshold may have simplified inventory methods available, which should be chosen deliberately.
Talk to us
If your online store is growing and your books still run on marketplace deposits, we can rebuild them around the numbers that matter and make sure your sales tax footprint is covered. Book a consultation with our Atlanta team.
