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Multistate Tax Commission’s special voluntary disclosure program for remote sellers

Special voluntary disclosure program for remote sellers

The Multistate Tax Commission (MTC) is facilitating a limited-time voluntary disclosure initiative for both sales and use tax and income tax for certain online sellers that use marketplace providers / facilitators to facilitate making retail sales into the state. The program will run from August 17, 2017, through October 17, 2017.


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Most participating states have agreed to forego any tax, penalty, and interest for prior periods in return for participating sellers beginning to collect and remit sales and use tax by December 1, 2017, and beginning to file income / franchise returns for the 2017 tax year. 

Special voluntary disclosure program

The MTC’s special voluntary disclosure program is available only to certain online sellers using a marketplace provider / facilitator to facilitate retail sales into the state and that have no physical presence nexus in the state, except for the online sellers’ inventory stored in a third-party fulfillment center located in the state or through other nexus-creating activities of the marketplace provider / facilitator on behalf of the online marketplace sellers in the state. According to the MTC’s guidance, an online marketplace provider is a person that facilitates a retail sale by an online marketplace seller by:

  • Listing or advertising for sale—by the online marketplace seller on a website—tangible personal property, services, or digital goods that are subject to sales/use tax
  • Either directly or indirectly through agreements or arrangements with third parties collecting payment from the customer and transmitting that payment to the online marketplace seller; and provides fulfillment services to the online marketplace seller

Sellers cannot participate if they have previously registered to collect and pay sales/use or income/franchise taxes or had any contact with the state concerning liability or potential liability for those taxes.  The program will run from August 17, 2017, through October 17, 2017. 

For purposes of this special MTC program, the participating states have agreed to waive sales/use and income/franchise tax liability, including interest and penalties, for prior tax periods unless the state indicates specifically otherwise. The seller, however, must register as a seller or retailer to collect, report, and remit sales and use tax (on all sales, regardless of the distribution channel) and begin filing returns no later than December 1, 2017. As for income / franchise taxes, the taxpayer must commence filing returns and paying tax due beginning with the tax year that includes the effective date of the special voluntary disclosure program, but not later than December 1, 2017. Thus, calendar year taxpayers would start filing income / franchise tax returns beginning with the 2017 tax year. 

KPMG observation

A benefit of participating in the special voluntary disclosure program is that there is no look-back period. Under regular state voluntary disclosure programs and under the “normal” MTC voluntary disclosure program, a three-year or four-year look-back period applies. 

States having indicated they will participate in the two-month voluntary disclosure program are: Alabama, Arkansas, Connecticut, Idaho, Iowa, Kansas, Kentucky, Louisiana, Nebraska, New Jersey, Oklahoma, South Dakota, Texas, Utah, Vermont, and Wisconsin (with a limited  look-back period). Colorado has indicated interest, but its participation is pending final approval. Read the official list of participating states and procedural guidelines on the MTC’s website (because the list of states may change, refer to the MTC’s website for additional information).


Read an August 2017 report [PDF 34 KB] prepared by KPMG LLP

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