Delinquent Sales Tax

Avoiding penalty and fees

Growing a business is hard. And as you grow, it is increasingly common for your company to commence interstate transactions that trigger sales tax liability. It is also common to accidentally miss filing sales taxes in a state where you should in the appropriate time frame. Enter voluntary disclosure agreements (VDAs).

A voluntary disclosure agreement (VDA) is a legal means for taxpayers to self-report back taxes owed for income, sales, property, and other types of taxes. In exchange for voluntarily reporting the tax due, states generally grant a waiver of penalty and also a limited look back (generally 3-4 years) potentially reducing the tax due significantly as compared to an audit.

Crippling Penalties and Fees

Multi state transactions are complex

If you own a company that executes transactions in more than one state, you need to review your sales tax to ensure that there are no delinquencies. You very well may owe sales tax or have compliance obligations that you are unaware exists. If back taxes are not disclosed, but are instead discovered through an audit, you are at a disadvantage and will end up being assessed various penalties plus interest plus all historical tax due.

If you find that you have not collected and remitted all of your sales tax, filing a VDA protects your company from harsh penalties and allows you to settle on the amount that you owe. If not, you could face crippling penalties and fees.


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