Voluntary Disclosure Agreement Table by State

A voluntary disclosure agreement (often called a VDA) is a way for a business to come forward and fix past sales tax issues before a state finds them first. If you have sales tax nexus in a state but you never registered or filed, the state could assess back taxes, penalties, and interest going back several years.

With a voluntary disclosure agreement, you usually register, file, and pay for a limited “lookback” period, and in many cases the state will waive or reduce penalties. The big idea is simple: you raise your hand first, and in return the state is often more reasonable.

The benefit is predictability and risk reduction. Instead of worrying about a surprise audit that reaches back as far as the state can go, a VDA can cap how far back you have to file and pay (again, with an important exception: if you collected sales tax from customers and didn’t remit it, states typically want all of it paid).

For many businesses, it’s the cleanest way to get compliant, protect the company going forward, and move on without the lingering fear of a large, unexpected assessment.

Click here to visit the Multistate Tax Commission Overview of Multistate Voluntary Disclosure Process