A roadmap for voluntary disclosure.
If you owe tax in states where you never registered, coming forward first can limit the damage.
- 01
What a VDA is
A voluntary disclosure agreement lets a business that owes tax in a state come forward before the state finds it. In exchange, the state commonly limits how far back it will assess and may reduce penalties.
- 02
When it makes sense
If you crossed thresholds in several states and never registered, a VDA can cap the look-back period. Without one, states may look back three to seven years, or indefinitely if no return was ever filed.
- 03
How it usually works
The business, usually through a professional, approaches the state anonymously, negotiates the look-back period and penalty terms, then registers, files back returns and pays the agreed tax and interest.
- 04
What Vertexis Nexus does
Vertexis Nexus quantifies your exposure by state from your sales history, prepares the back returns once terms are agreed and files going forward. Negotiating the agreement itself is best done with a qualified SALT professional.
- 05
Timing matters
Many states disqualify a business from a VDA once the state has contacted it. Acting before a notice arrives is usually essential.
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