If you sell products via Amazon, and have inventory in Amazon warehouses, please pay attention.
The Multistate Tax Commission is offering a special limited-time voluntary disclosure initiative for online marketplace sellers, in which the following states are participating:
- Alabama
- Arkansas
- Colorado
- Connecticut
- Florida
- Idaho
- Iowa
- Kansas
- Kentucky
- Louisiana
- Nebraska
- New Jersey
- Oklahoma
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Wisconsin
The States listed above will consider applications for voluntary disclosure received by Multistate Tax Commission (MTC) staff during the time period August 17, 2017 through October 17, 2017 from taxpayers meeting the eligibility criteria.
PLEASE BE CAREFUL and READ ALL OF THE CRITERIA to AVOID UNINTENDED CONSEQUENCES.
For all the details, check out the MTC's website.
Many CPA firms and consultants have been publishing alerts regarding this matter (KPMG and Deloitte have some good summaries). The question remains - SHOULD YOU TAKE ADVANTAGE OF IT?
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 tax returns for the 2017 tax year. Consequently, there is no lookback period in MOST cases. This is a reason to do the program. Generally, voluntary disclosure programs require 3 to 4 year lookback periods requiring taxpayers to remit taxes and interest for the previous 3 or 4 tax years.
NOTE:
- Colorado will waive any back tax liability for uncollected sales/use tax. However, Colorado will not waive back tax liability for income tax beyond its normal four-year lookback period. Colorado notes that it already has a small seller income tax nexus exception for sales less than $500,000 into the state.
- Nebraska will consider waiving back tax liability for uncollected sales/use tax and income tax.
- South Dakota imposes sales/use tax but does not impose income tax. ↩
- Wisconsin will require payment of back tax and interest for a lookback period commencing January 1, 2015 for sales/use tax, and including the prior tax years of 2015 and 2016 for income/franchise tax.
I don't care if you consult with me, BUT PLEASE consult a qualified state tax professional before utilizing this program. Good consultants to contact include: Dillon Tax Consulting, Yetter Tax Consulting, PrietoDion Consulting Partners LLC, Gable Tax Group, or Miles Consulting Group.