There are several pitfalls that a company should be aware of when entering into a volunteer agreement. The taxpayer must report and request the VDA from a state before receiving inquiries, communications or audit opinions from the state concerned. Some states limit such requests, communications or audit notices to the specific type of tax disclosed, while others extend it to all taxes administered by the state. This is the most common misconception about voluntary disclosure agreements. The key is that this is a “voluntary” admission. If the state itself turns to you to contact you about certain tax loopholes, the state does not consider this to be voluntarily declared. The MTC organized a tax amnesty program for online sellers that ran from August 17 to November 1, 2017. The volunteer disclosure program allowed sellers to transfer sales tax to future sales without penalty or liability for unpaid and previously accumulated sales tax in 25 participating states. In voluntary disclosure agreements, most states allow a company to estimate its past liabilities, simplifying the process. With a few exceptions, Excel calendars for calculating tax obligations are accepted instead of filing all previous VAT returns. States are willing to make such concessions to facilitate the process, as the main objective of States is to promote voluntary compliance with future and ongoing tax collection and reporting obligations. In short, the state is willing to give up certain formalities and even certain revenues to bring new taxpayers into the herd.
If a company`s voluntary disclosure agreement or VDA is accepted, there are strict timelines that must be met to receive all the benefits of the voluntary disclosure agreement program. Remember that a voluntary disclosure agreement is a legal agreement between the company and the state. Therefore, there are very clear results that must be provided by the company, as well as a strict timeline of when these elements must be provided. Like almost everything in sales and use tax, these timelines vary from state to state, but an experienced sales tax advisor will be aware of these timelines and will be sure their client will meet them. A voluntary disclosure agreement is a legal agreement between a state tax authority and a company that acknowledges that it has failed to meet its obligations related to sales and use tax compliance. Through the voluntary disclosure agreement, the company will make all necessary registrations in the state and comply with any unpaid tax obligations. In the future, at the end of the voluntary disclosure agreement program, the company will have regular monthly, quarterly or annual sales tax reporting obligations with the state, depending on the level of activity in the state. Amazon.com entered into a voluntary sales tax collection agreement with Wyoming. Amazon will collect sales taxes on its sales to Wyoming consumers and businesses starting March 1, 2017. Short-term tenants in Wyoming may be able to use a Voluntary Disclosure Agreement (VDA).
A VDA offers hosts the ability to proactively disclose tax obligations from the previous period in accordance with a binding agreement with the Wyoming Department of Revenue. VDAs are proposed to encourage cooperation with state tax laws and may result in a waiver of some or all penalties and interest payments. Sellers registered through SSTP can be contacted through other taxes in the Member States where they register with the SSTP. You will be assigned a deposit frequency and due dates when you register with the tax authorities. For filing with the Wyoming Department of Revenue, the due dates are as follows: 0% – 4% Some local jurisdictions do not charge sales tax. Other regulations related to leases/sublets or co-ownership/cooperative rules may apply to your situation. .