At its October 11, 2017 meeting, the Multistate Tax Commission's (MTC) Nexus Committee extended both the application and registration deadlines for its Voluntary Disclosure Program, called the Online Marketplace Seller Voluntary Disclosure Initiative (the Program). As noted in our previous alert, Multistate Tax Commission VDP Alert, the Program provides an opportunity for online marketplace sellers (remote sellers) to prospectively begin collecting sales tax in a significant number of jurisdictions and also allows for limited prior filings in a number of other jurisdictions.
The original application period ran from August 17, 2017, to October 17, 2017, but is now extended to November 1, 2017. In addition, taxpayers accepted into the Program are now allowed 30 days after receiving notice that the taxing state has signed the voluntary disclosure agreement to register with such state. Previously, an online seller participating in the Program was required to register with the taxing state no later than December 1, 2017.
The Multistate Tax Commission has received far fewer applications for the Voluntary Disclosure Initiative than anticipated. There are several factors that could be contributing to the low number of applications. These factors include awareness of the program, remote sellers not falling within the specific eligibility criteria, and uncertainty as to whether a business has nexus or a minimum connection with a participating state. Taxpayers should contact their state and local tax professional to address these issues and to determine whether they could benefit from participating in the Program.
For more information, please contact Eddie Delgado, Principal, State and Local Tax Services, at Eddie.Delgado@CohnReznick.com or 310-843-8246.