Businesses sometimes discover that they should have collected sales tax in prior years but did not. When this occurs, voluntary disclosure agreements may allow companies to resolve tax liabilities before a state audit begins.<\/p>\n\n\n\n
Voluntary disclosure programs allow businesses to report unpaid tax obligations proactively. In many cases, states offer benefits such as reduced penalties and limited lookback periods.<\/p>\n\n\n\n
A voluntary disclosure checklist helps businesses evaluate whether a voluntary disclosure agreement may be appropriate and prepares them for the disclosure process. If you are unfamiliar with voluntary disclosure agreements, begin with the guide Sales Tax Voluntary Disclosure Agreements Explained<\/a><\/strong>.<\/p>\n\n\n\n The first step in evaluating voluntary disclosure is identifying states where nexus existed during prior periods.<\/p>\n\n\n\n Nexus may arise through:<\/strong><\/p>\n\n\n\n Businesses must determine which states may require disclosure. To review nexus thresholds across states, visit Economic Nexus by State<\/a><\/strong>.<\/p>\n\n\n\n Businesses should review historical sales records to determine revenue generated within each state.<\/p>\n\n\n\n Important metrics include:<\/strong><\/p>\n\n\n\n This information helps determine the scope of potential tax exposure. Businesses can estimate exposure using the sales tax exposure calculator<\/a><\/strong>.<\/p>\n\n\n\n Once sales data is analyzed, businesses must determine when nexus was first created.<\/p>\n\n\n\n Nexus start dates help determine the potential lookback period for unpaid taxes.<\/p>\n\n\n\n Identifying these dates allows businesses to estimate potential liabilities before submitting a voluntary disclosure request.<\/p>\n\n\n\n Businesses should estimate the amount of unpaid sales tax for prior periods.<\/p>\n\n\n\n This calculation typically involves:<\/strong><\/p>\n\n\n\n More details about tax calculations are explained in How to Estimate Historical Sales Tax Exposure<\/strong><\/a>.<\/p>\n\n\n\n Voluntary disclosure programs typically apply only when the state has not already contacted the business regarding compliance issues.<\/p>\n\n\n\n Businesses may not qualify for voluntary disclosure if:<\/strong><\/p>\n\n\n\n Businesses should confirm eligibility before proceeding with disclosure.<\/p>\n\n\n\n Businesses must prepare documentation supporting voluntary disclosure applications.<\/p>\n\n\n\n Common documentation includes:<\/strong><\/p>\n\n\n\n Providing accurate documentation helps states evaluate disclosure requests efficiently.<\/p>\n\n\n\n Once documentation is prepared, businesses may submit voluntary disclosure applications to state tax authorities.<\/p>\n\n\n\n The application typically outlines:<\/strong><\/p>\n\n\n\n States review the application and determine whether to approve the voluntary disclosure request.<\/p>\n\n\n\n After voluntary disclosure agreements are accepted, businesses must register for sales tax in the affected states.<\/p>\n\n\n\n Registration allows businesses to begin collecting sales tax and filing returns going forward. More details about registration are explained in How to Register for Sales Tax<\/a><\/strong>.<\/p>\n\n\n\n Businesses participating in voluntary disclosure agreements may be required to file tax returns for the agreed lookback period. These filings report taxable sales and calculate the amount of tax owed.<\/p>\n\n\n\n After resolving historical liabilities, businesses should implement systems to ensure ongoing compliance.<\/p>\n\n\n\n Important steps include:<\/strong><\/p>\n\n\n\n Automation tools often help businesses maintain compliance across multiple states. More details about automation tools are explained in How Sales Tax Automation Software Works<\/a><\/strong>.<\/p>\n\n\n\n Voluntary disclosure programs provide businesses with an opportunity to resolve tax liabilities before enforcement actions occur.<\/p>\n\n\n\n A structured checklist helps companies evaluate eligibility, prepare documentation, and complete the disclosure process efficiently.<\/p>\n\n\n\n Businesses that address exposure proactively often reduce penalties and resolve compliance issues more effectively.<\/p>\n\n\n\n If you are evaluating sales tax obligations for your business, you can start with the Economic Nexus Guide<\/strong><\/a> and review requirements in the Economic Nexus by State<\/strong><\/a> reference.<\/p>\n\n\n\n Businesses assessing potential liability often begin with a Sales Tax Exposure Analysis<\/strong><\/a> or estimate exposure using the Sales Tax Exposure Calculator<\/strong><\/a>.<\/p>\n\n\n\n If you operate across multiple states, the Economic Nexus Tracker<\/strong><\/a> can help monitor when thresholds may be triggered.<\/p>\n\n\n\n For a structured overview of potential liabilities, businesses may review the Sales Tax Risk Report<\/strong><\/a>.<\/p>\n\n\n\n You can review a step-by-step Sales Tax Exposure Checklist<\/strong><\/a> to understand where risks may exist.<\/p>\n\n\n\n If you suspect historical exposure, see How to Identify Sales Tax Exposure<\/strong><\/a> and learn how to resolve issues in How to Fix Past Sales Tax Exposure<\/strong><\/a>.<\/p>\n\n\n\nStep 1: Identify States Where Nexus Exists<\/h2>\n\n\n\n
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Step 2: Analyze Historical Sales Activity<\/h2>\n\n\n\n
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Step 3: Determine Nexus Start Dates<\/h2>\n\n\n\n
Step 4: Estimate Historical Tax Liability<\/h2>\n\n\n\n
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Step 5: Confirm Eligibility for Voluntary Disclosure<\/h2>\n\n\n\n
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Step 6: Prepare Disclosure Documentation<\/h2>\n\n\n\n
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Step 7: Submit Voluntary Disclosure Application<\/h2>\n\n\n\n
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Step 8: Register for Sales Tax Permits<\/h2>\n\n\n\n
Step 9: File Historical Tax Returns<\/h2>\n\n\n\n
Step 10: Implement Ongoing Compliance<\/h2>\n\n\n\n
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Why a Voluntary Disclosure Checklist Matters<\/h2>\n\n\n\n
Related Sales Tax Resources<\/h2>\n\n\n\n