Time is Running Out for the New Sales Tax Amnesty Program

Jennifer Deroin Blog

By: Kayla Kormylo, Staff Accountant

The Online Marketplace Voluntary Disclosure Initiative hosted by the Multistate Tax Commission (MTC) deadline is less than two weeks away on October 17, 2017*.

*UPDATE:  The Amnesty application period was extended to November 1st, 2017.

Currently 25 states have agreed to this program and offer either full or partial relief — amnesty, for online retailers who have not been collecting and remitting sales tax. Many states follow legislation stating use of fulfillment warehouses establishes nexus and/or internet sales will create economic nexus. If either nexus or economic nexus is triggered, the online seller will be responsible to pay the state sales tax regardless if it was collected from the buyer. Of the 25 participating states, 10 have Amazon FBA Warehouses, including:

Amazon FBA Location Level of MTC Amnesty
Connecticut Full
Florida Full
Kansas Full
Kentucky Full
Massachusetts Partial
Minnesota Partial
New Jersey Full
Tennessee Full
Texas Full
Wisconsin Partial

Many states do have their own Voluntary Disclosure Programs outside of the MTC Online Market Place Voluntary Disclosure Initiative, however none offer full amnesty and typically only offer relief of penalties and interest, not the sales tax liability itself. This type of opportunity is extremely rare and it is important to consider all your options carefully

Next Steps:

  1. Apply for amnesty with the participating states through the MTC program for which you have a sales tax liability by October 17, 2017.
  2. Reduce your future risk now by registering with states (including those not offering amnesty through the MTC) you have established nexus or economic nexus and get up-to-date with all back-owed tax liability.

We recognize sales and use tax can be overwhelming, please let us help. Click & Mortar Accounting can help you determine what states you have potential sales tax liability, help with filing, and assist you in maintaining future compliance.  Contact us today.