Voluntary Disclosure Agreements VDA State Rules on Tax Registration Requirements

A Voluntary Disclosure Agreement, or VDA, is an agreement between a company and a state that allows the company to voluntarily come forward, report past tax liabilities, and pay any outstanding amounts. In return, the state typically removes penalties and limits the lookback period, giving businesses a clean path forward.

Applying for a VDA is often a smart way for a company to correct past mistakes and reduce potential exposure. However, every state has its own rules for when a business must register to collect tax as part of the VDA process. Understanding these rules can be challenging because each jurisdiction handles registration timing differently.

Below is a summary of selected states and their requirements on when to register for tax during the VDA process:

• FL Register after the VDA is approved
• MI Register after the VDA is approved
• PA Register after the VDA is approved. The business is not eligible if it was previously registered
• VA Register after the VDA is approved
• WA Register after the VDA application is submitted. If applying anonymously, the business must disclose its identity within 15 days. The business must also not have been registered or reported taxes within the past four years plus the current year
• OH Register after submitting the VDA application
• SC Do not register. The auditor will handle registration
• MD Register when submitting the VDA application
• MA Register after receiving the voluntary disclosure program policy notice. Businesses are disqualified if already registered in Massachusetts
• MN Register after the VDA is approved
• UT Register within 30 days after signing the agreement

For questions on VDA rules and registration requirements in any state, contact Kim Allen at (617) 451 0303 extension 106.