Your online store can keep more of what it earns.
Reconciling your 1099-Ks, mapping sales tax nexus, and pairing an S corp with a Solo 401(k) can lower your tax and limit surprises from other states. Summer Associates models the federal and Connecticut result before you elect S corp status.
Or call (203) 327-4311 to talk with our Stamford office.
Enrolled agents
Our practitioners are enrolled to practice before the Internal Revenue Service.
Federal and Connecticut
We model federal and Connecticut tax together, so you see the state effect of a federal move before you make it.
Local to Fairfield County
Based in Stamford and serving clients for over 35 years.
Planning, not just filing
We focus on the decisions you can still change: elections, timing, and year-end moves.
Where growing online brands lower tax and risk
Sellers face two tax systems at once: income tax on profit and sales tax on every order in dozens of states.
Reconcile Form 1099-K to your books
Form 1099-K shows gross payments, not profit. Reconcile refunds, fees, and shipping so you're not taxed on revenue you never kept.
How it works →Sales taxMap your sales tax nexus
Economic nexus and FBA inventory can create obligations in states where you've never set foot.
How it works →AccountingChoose the right inventory method
Small sellers can treat inventory as non-incidental materials or follow their books under §471(c).
How it works →EntityS corp plus Solo 401(k)
Save self-employment tax on distributions and shelter up to $72,000 in a Solo 401(k).
How it works →DeductionProtect the 20% QBI deduction
E-commerce income qualifies. Above the threshold, wages and property limit the deduction.
How it works →GlobalPlan for international sales and suppliers
VAT registrations, customs duties, and foreign supplier payments each carry their own rules.
How it works →In-depth guides
Plain-English explainers covering the rules, the numbers, and the common mistakes.
Form 1099-K for online sellers: thresholds, state rules, and reconciling gross to net
The federal $20,000 and 200-transaction threshold, states with lower thresholds, and how to reconcile marketplace gross payments to taxable profit.
Read the guide · 6 min →Connecticut taxes for online sellers: sales tax, nexus, the PET, and Fairfield County property tax
Connecticut's 6.35% sales tax, the $100,000-and-200-sales nexus test, marketplace rules, the PET, and property tax for sellers in Fairfield County and beyond.
Sales taxSales tax nexus for online sellers: Wayfair, marketplace facilitators, and FBA inventory
How economic nexus works after Wayfair, what marketplace facilitator laws cover, why FBA inventory can create nexus, and how to clean up past exposure.
AccountingInventory accounting for small sellers: §471(c), the cash method, and COGS
Simpler inventory methods under the small business gross receipts test, what belongs in cost of goods sold, and how to switch methods with Form 3115.
How working with Summer Associates starts
The first consultation is free, with no obligation. From the first call to a plan, the process has three steps.
Start with a conversation
Call (203) 327-4311 or send us a note. Tell us what you are working on and what you want to solve.
We review the details
We look at your sales by state, Forms 1099-K, and last return to see which strategies fit and what they could be worth.
You get a plan
We model the options on your numbers, federal and Connecticut, and set out the steps and the deadlines that apply.
Summer Associates Tax Services, 48 Union St, #1C, Stamford, CT 06906. Convenient to clients throughout Fairfield County, including Greenwich, Darien, New Canaan, Norwalk, Westport, and Fairfield.
Book a free consultationThe 2026 numbers that matter
The federal, multistate, and Connecticut figures sellers need for reporting, compliance, and retirement planning.
| Item | 2026 figure | Notes & source |
|---|---|---|
| Federal Form 1099-K threshold | Over $20,000 and over 200 transactions | Restored by the 2025 law (IRS) |
| Typical state economic nexus | $100,000 in sales | Some states also count transactions, though several have dropped that test |
| Connecticut remote-seller nexus | $100,000 and 200 sales | Both tests, over the 12 months ending Sept. 30. Connecticut-based sellers need a permit before their first sale (CT DRS) |
| Connecticut sales tax | 6.35% | Statewide, with no local add-ons. Digital goods are taxed at 6.35%, and electronically delivered business-use software and computer services at 1% (CT DRS) |
| Small business gross receipts test | $32M | Average of prior 3 years, related businesses combined. Unlocks the cash method and §471(c) (Rev. Proc. 2025-32) |
| Solo 401(k) employee deferral | $24,500 | Plus an employer contribution of 25% of W-2 pay, with a combined limit of $72,000 |
| Section 179 limit | $2,560,000 | For equipment, shelving, and software |
| QBI deduction | 20% | Permanent, and e-commerce is not a specified service business |
Common questions
Will I get a 1099-K from Amazon, Etsy, or PayPal?
Federally, a third-party settlement organization must issue Form 1099-K if your gross payments exceed $20,000 and you have more than 200 transactions in the year, and it may send one below that. Some states, including Maryland, Massachusetts, Vermont, Virginia, and the District of Columbia, require reporting at $600.
Do I have to collect sales tax if Amazon already does?
Marketplace facilitator laws make Amazon, Etsy, eBay, and Walmart collect on sales through their platforms in every sales tax state. Your own website, wholesale, and other channels are separate, and you may still need to register and file in some states.
Does storing inventory in an FBA warehouse create nexus?
In many states, yes. Inventory stored in a state is generally physical presence, which can create income tax and sales tax obligations even below economic nexus thresholds.
Is an S corp worth it for an online store?
It usually is once net profit is consistently around $80,000 or more. Savings come from avoiding self-employment tax on distributions, but you'll need payroll and a separate return.
Do I need a Connecticut seller's permit if I only sell on Amazon or Etsy?
If your business is in Connecticut, yes. DRS requires in-state sellers to register even when a marketplace collects the tax, and it generally sets marketplace-only sellers up as annual filers. Sellers outside Connecticut must register once they have both $100,000 of gross receipts and 200 or more retail sales into the state, counting marketplace sales, or once they have inventory in a marketplace's Connecticut warehouse. The permit costs $100.
Does Connecticut tax shipping charges and digital downloads?
Yes. Shipping and delivery charges on taxable orders are part of the taxable sales price, even when billed separately, and digital goods such as e-books, music, and video are taxed at the full 6.35%. Software downloaded or accessed online for business use, and computer and data processing services, are taxed at 1%.
Find out where you owe sales tax and what you could keep.
In a consultation, we look at your sales by state, Forms 1099-K, and last return, estimate whether an S corp and Solo 401(k) could lower your tax, and tell you where you may need to register.