E-commerce Sellers: Gross-Receipts Taxes by State

What to know

• CA fee keys off receipts + COGS: a loss year still pays full tier.
• NV commerce tax exempts the first $4M, then NAICS rates apply.
• Marketplace nexus (inventory in FBA warehouses) creates physical nexus independently.

Why receipts-based taxes hurt stores

California's LLC fee, Washington's B&O tax, Oregon's Corporate Activity Tax, and Nevada's commerce tax are all based on revenue, not profit. A store with a 5% margin pays them on every dollar of sales, so they can equal a large share of actual profit. A California LLC with $1.2 million of sales pays $6,800 whether it made $60,000 or lost money.

Sales tax is separate, and bigger

Since the Wayfair decision (2018), states can require remote sellers to collect sales tax once sales into the state pass an economic threshold, commonly $100,000. Marketplaces like Amazon and Etsy collect for sales made through them, but sales on your own site are your responsibility. Inventory stored in a state, including in a 3PL warehouse, creates physical presence there regardless of sales volume.

Structure to consider

Past about $250,000 of California receipts, compare staying an LLC with electing S-corp status: the S-corp pays 1.5% of profit instead of the receipts-based fee. For a thin-margin store that can be the difference between a $6,000 fee and a few hundred dollars of tax.