Voluntary Disclosure Agreement for Sales Tax Compliance

What is a Voluntary Disclosure Agreement?

A voluntary disclosure agreement (VDA) is an arrangement with the state to reduce or waive penalties or interest and limit the look-back period for uncollected taxes.

Our team of sales tax experts will help you conduct a nexus analysis and determine if a VDA can be beneficial in your circumstances.

With a voluntary disclosure agreement, your sales tax liability may be reduced. In other words, voluntarily choosing to disclose unrealized and unpaid taxes to the state allows that state to form a compromise with your company. The state may only charge you a portion of the taxes you owe by waiving some of the interest or years covered.

What a Voluntary Disclosure Agreement Can Mean for Your Business

You can secure your business’s financial future in a state with a voluntary disclosure agreement.

However, a voluntary disclosure agreement isn’t easy. Each state has its own rules for application and qualification. In every state, significant attention to detail is required. Your business can risk voiding the VDA. This could leave your company with nothing but wasted time and money.

Avoid These Common Tax Errors with PMBA

Not Utilizing Sales Tax Holidays

Sales tax holidays are helpful as they are often used to boost consumer spending. Unfortunately, there isn’t a standard list to follow, so retailers are responsible for tracking and taxing their products accordingly.

Relying on Past Sales Tax Rules

State and local tax rules can change with exemption updates, state boundary shifts, and more. If retailers aren’t updating in real-time, they may be out of compliance with new sales tax requirements.

Miscategorizing Products

It may be easy to assume that products within the same category are taxed similarly. However, something as simple as packaging can impact a product’s taxability.

How to File a VDA

Contact a Specialist at PMBA

A tax specialist will respond promptly and determine if a voluntary disclosure agreement is best for your company.

We’ll Help You Manage Your Compliance

Our team will identify your sales tax nexus requirements and formulate a compliance strategy specific to your business needs.

We’ll Help You Mitigate Your Potential Liability

Our team will negotiate terms and help you better understand your obligations with the state.

Minimize Your Company’s Tax Burden with PMBA

For several businesses, discovering unknown tax liabilities seems like the worst kind of nightmare. You may think that simply beginning to register and file sales tax returns is the best measure. But, before you start to comply moving forward, it is important to evaluate protective options like a Voluntary Disclosure Agreement.

The process of negotiating a voluntary disclosure agreement, with sales tax owed to the state, may uncover additional tax liabilities in that state. Naturally, you only want to undergo the process of filing and negotiating a voluntary disclosure agreement if it’s best for your business. But how do you know for sure? A PMBA expert can give you a personalized recommendation based on your company’s unique circumstances.

Voluntary Disclosure Agreement