Georgia Income & Tax for eCommerce Businesses

💡 Two-Layer Business Tax: Georgia imposes both a Corporate Income Tax on net income AND a Net Worth Tax on a corporation's net worth. Both can apply to out-of-state C corporations with Georgia nexus. S corporations, LLCs, and partnerships generally avoid the corporate income tax but may have individual income tax obligations for their owners.

Part 1: Georgia Corporate Income Tax

Georgia's corporate income tax rate is 5.75% on apportioned taxable net income for C corporations. This rate has been stable in recent years, though Georgia has signaled future reductions aligned with the state's broader tax reform trajectory.

Pass-through entities — S corporations, partnerships, LLCs taxed as partnerships — do not pay Georgia corporate income tax. Their income flows through to owners, who pay Georgia's flat individual income tax rate of 5.49% (down from 5.75%, as the state moves toward a lower flat rate).

What Creates Georgia Corporate Income Tax Nexus?

Georgia uses a factor-presence nexus standard for corporate income tax. An out-of-state business has nexus if it meets any of the following:

• Owns or leases property in Georgia valued at $50,000 or more

• Has payroll in Georgia of $50,000 or more

• Has gross receipts from Georgia sources exceeding $500,000

• 25% or more of total property, payroll, or gross receipts are attributable to Georgia

• Has employees, agents, or independent contractors operating in Georgia

• Owns or uses tangible personal property in Georgia — including FBA inventory

Georgia's Net Worth Tax

In addition to the corporate income tax, Georgia levies a Net Worth Tax on corporations for the privilege of doing business in the state. This graduated tax is based on the prior year-end balance sheet net worth of the corporation. Key details:

• Corporations with net worth of $100,000 or less are exempt

• The maximum net worth tax is $5,000 for corporations with net worth exceeding $22 million

• This applies to C corporations only — partnerships and LLCs taxed as partnerships are not subject to the net worth tax

PL 86-272 in Georgia

Federal Public Law 86-272 protects C corporations from Georgia corporate income tax if their only Georgia activity is soliciting orders for tangible goods approved and shipped from outside Georgia. However:

• FBA inventory stored in a Georgia warehouse or fulfillment center removes this protection

• Independent contractors or employees doing anything beyond pure order solicitation removes this protection

• Affiliate relationships with Georgia businesses can also trigger nexus in certain circumstances

Part 2: Georgia Sales Tax

Economic Nexus Threshold

Georgia's economic nexus rules for sales tax are:

• $100,000 in gross revenue from retail sales into Georgia in the previous or current calendar year, OR

• 200 or more separate retail transactions delivered into Georgia in the previous or current calendar year

• Marketplace sales through certified facilitators are excluded from your individual seller threshold if the marketplace is registered and collecting tax

Georgia Sales Tax Rate

The statewide base rate is 4%. Georgia counties and special districts add local levies, with combined rates reaching up to 9% in some jurisdictions. For example, most of metropolitan Atlanta (Fulton County) has a combined rate of 7.75%. Georgia is a destination-based state — you charge based on the customer's location.

FBA Sellers: Georgia Fulfillment Centers

Amazon operates fulfillment centers in Georgia, particularly in the Atlanta metro area. If your FBA inventory is stored in these facilities, you have immediate physical nexus for both sales tax and corporate income tax (if you are a C corporation). Georgia's Department of Revenue has been increasingly proactive in reaching out to out-of-state FBA sellers who have inventory in the state but are not registered.

What About Sales Tax?

Georgia's 4% base rate combined with county and special district levies creates significant variation across the state — rates range from 6% to 9% depending on the customer's county.

At Tall Oak Advisors, we put together this guide as a resource for our eCommerce community. Tax rules vary significantly from state to state, and we want sellers to have the information they need to make informed decisions. More info at talloakadvisors.com

Disclaimer: The information in this article is for general informational purposes only and does not constitute legal or tax advice. Tax laws change frequently. Consult a qualified tax advisor or CPA regarding your specific situation.

Sources: O.C.G.A. § 48-7-21 (Corporate Income Tax); Georgia Dept. of Revenue; O.C.G.A. § 48-13 (Net Worth Tax); Georgia Economic Nexus Rules (eff. Jan. 1, 2020); Pub. L. No. 86-272.