Get relief for past sales tax until October 17, 2017. There’s a limited window to do so in over 23 states. It’s an opportunity for qualifying sellers to eradicate back sales/use and income/franchise tax liability, and get compliance up to snuff. Here’s a mini lesson about the Multistate Tax Commission Online Marketplace Seller Voluntary Disclosure Initiative, and the 23 states offering this short relief*:
• Alabama
• Arkansas
• Connecticut
• Florida
• Idaho
• Iowa
• Kansas
• Kentucky
• Louisiana
• Missouri
• New Jersey
• North Carolina
• Oklahoma
• South Dakota
• Tennessee
• Texas
• Utah
• Vermont
The following states offer limited agreement in this window: Colorado, Massachusetts, Minnesota, Nebraska, Washington, D.C., and Wisconsin. Note: Colorado won’t assess any back liability for uncollected sales/use tax, and agrees not to assess income tax for the time period prior to its 4-year look-back time. Income tax due for the tax years included in its four-year look-back period, plus interest, must be paid. Massachusetts maintains a look-back period. Details to be determined. Minnesota is maintaining a look-back period. Details to be determined. Nebraska will consider waiving back sales/use tax and income tax liability. Washington, D.C. will consider a shorter look-back period than its typical 3 years for both sales/use and income/franchise tax.
Wisconsin will require businesses to remit unpaid sales/use and income/franchise tax plus interest going back to Jan. 1, 2015.
*Confirm. This list may grow.
What is this marketplace seller sales tax amnesty program anyway? Chris Marantette, President of NetRush, a digital retail agency, representing premium brands on the Amazon marketplace explains it best:
“This [amnesty program] is a once-in-a-lifetime opportunity. Many sellers aren’t charging sales tax, or are only filing in their home state, and they’re taking their chances. This is their chance to get it all right, and get it done.”
The Amnesty Program is open to online marketplace sellers, August 17–October 17. It forgives sellers’ back taxes, interest, and penalties who haven’t been collecting tax in states where they should be. Amnesty is available in participating states only, and applies to both sales/use tax and income/franchise tax. The only catch is that businesses must register and begin collecting and remitting applicable taxes in the states that forgive their back taxes no later than Dec. 1, 2017 in exchange for the amnesty.
Who is eligible for the Initiative? Businesses must have inventory stored in a third-party fulfillment center in one or more of the participating 23 states. You must not have any other tie to those 23 states that creates nexus, that is, the obligation to collect sales tax. One more thing: you must not have had any prior contact with those states, concerning real or potential tax liabilities. States won’t get business info until both parties (the state and the business) sign the voluntary disclosure agreement.
United States and foreign businesses that use a marketplace provider, such as Fulfillment by Amazon (FBA) or eBay, to fulfill orders — such businesses are oftentimes known as marketplace sellers.
Remember the August 17–October 17, 2017 window. You must file an application during this time.
Please give our office a call Toll-free: 800.952.8996 or email info@statetaxgroup.com with questions.
Bye for now,
State Tax Group, LLC
State Tax Group, LLC is a state and local tax advisory and consulting services firm, specializing in sales and use tax consulting, audit representation, tax compliance, and more. For more information on how we can make state taxes smooth sailing for you, call us toll-free at 800.952.8996; or visit www.statetaxgroup.com.
