Online Seller Amnesty Help

Could Your Company Get Sales and Income Back Taxes Forgiven?

 

ONLINE SELLER AMNESTY PROGRAM

The Multistate Tax Commission (MTC) has negotiated a special deal for online sellers that may have sales and income tax obligations from previous unpaid taxes in 24 different states. (More states may be added before the program begins).

The MTC has put together a special amnesty initiative program for online sellers that will run from August 17, 2017 to November 1, 2017 (previously October 17, 2017).

Online sellers with potential tax liability could negotiate a settlement that could lead to some or all of their back-taxes being forgiven. The catch? Online sellers must meet certain eligibility requirements and apply for amnesty between August 17, 2017 – November 1, 2017. They must also voluntarily disclose their tax obligations by submitting a voluntary disclosure agreement (VDA).  In addition, they must agree to register and collect sales taxes no later than December 1, 2017, or not later than 30 days after the taxpayer has received notice that the state has signed the voluntary disclosure agreement, whichever date is later, and file income tax returns (if subject) for all periods fiscal periods covering December 1, 2017.

Taxpayers that have not been contacted by any of the states participating in the amnesty program will be able to apply to start remitting sales tax on future sales without penalty or liability for unpaid, prior accumulated sales tax in the participating states. 25 states have agreed to participate in the initiative so far and more could join. The participating states include:

  • Alabama

  • Arkansas

  • Colorado (sales/use tax only)

  • Connecticut

  • District of Columbia (may not waive all prior periods)
  • Florida

  • Idaho

  • Iowa

  • Kansas

  • Kentucky

  • Louisiana

  • Massachusetts (special provisions apply)
  • Minnesota (special provisions apply)
  • Missouri
  • Nebraska (may not waive all prior periods)

  • New Jersey

  • North Carolina
  • Oklahoma

  • Rhode Island
  • South Dakota

  • Tennessee
  • Texas

  • Utah

  • Vermont

  • Wisconsin (special provisions apply)

Some states may require a limited look-back period for prior tax liabilities or limit the tax types.

Sellers who wish to participate in the program will need to understand their tax obligations and file the voluntary disclosure program paperwork during the program dates in order to apply for consideration in each state. The MTC will route the paperwork for each participating state for which the seller is seeking amnesty protection. If the state accepts the voluntary disclosure application, the sellers will then need to register with each state individually to collect the sales tax and comply with the income tax rules.

For more details visit the MTC website.

Not sure if you need assistance with this issue? Have other questions? Click here to send us your questions and we’ll be in touch.

Who Should be Concerned? ONLINE SELLERS

Online sellers who are using a marketplace facilitator with owned inventory at the facilitator’s site likely have incurred nexus. Think sites like Amazon, Wayfair, Walmart and more in order to sell goods. E-commerce sellers should also take note and those with order fulfillment or inventory in different states could be at risk as well.

If you haven’t been paying sales or income taxes in states where you conduct business or incur nexus, you could be at risk and need to consider this limited time amnesty program that could forgive your back-taxes.

The special MTC amnesty program initiative is TEMPORARY. It is only available from August 17 – November 1, 2017. Meaning, that if you don’t get this taken care of now, you could discover down the road that you have tax obligations with no recourse. It is likely the states will aggressively pursue their discovery activities and initiate audits against sellers who do not participate.

We’ve seen companies who were caught by the state assessed with back-taxes, fines, and interest for hundreds of thousands and millions of dollars. Take part in the amnesty program and get caught up without it putting you out-of-business. This initiative is likely the only opportunity to eliminate your risk and liability in a number of states.

 

Understand Your Tax Obligations & Properly File for Amnesty

If you think that you could have tax liability in any of the states listed above, don’t miss the chance to file for amnesty that could forgive some or all of your sales and income taxes.

Companies can file themselves. But, to ensure you handle this correctly, you should consider working with someone to help you understand if you qualify, how to complete the application to protect yourself and evaluate what to do in non-participating states.

We are experts at helping companies understand their tax liability and guiding them through the amnesty process to help mitigate costs. And the costs of non compliance could be huge.

 

Learn More About the MTC Amnesty (Tax Forgiveness) Program in Our Free Webinar

If you missed the webinar about this program as well as how it may apply to your company and how to get expert help through this process, click on the image below to view the webinar recording:

MTC webinar image

In the webinar, Diane explains the program, who qualifies, the process, and services that were available to help manage the amnesty program.

“This is really unprecedented. The only other time in my 30 years in the tax profession that I can recall states offering full forgiveness of prior periods was when the Streamlined Sales Tax Agreement went into effect in 2000. With all the uncertainty related to remote seller legislation, this could be a way for online sellers to evaluate and reduce their risk for not just sales tax but also income tax. I look forward to helping your company break through all the rules and weigh the benefits of the program. The impact the program can have on your company can be the difference between thriving or going out of business.”

Diane Yetter. President and Founder of YETTER & The Sales Tax Institute

 

We helped a number of online sellers with this process. We have heard that FBA sellers are being contacted by the state of California. We have also heard that Washington has contacted some FBA sellers. Unfortunately, there’s not much you can do once they’ve contacted you.

 

Not sure if you need assistance with this issue? Have other questions? Click here to send us your questions and we’ll be in touch.