A Texas voluntary disclosure agreement, or VDA, is a way to come forward to the Texas Comptroller of Public Accounts and resolve past-due tax exposure before the Comptroller has already contacted you or started an audit. For ecommerce sellers and cross-border businesses, it is often used to clean up unregistered Texas sales tax obligations, report prior periods, and reduce the cost of getting compliant.
Texas is especially important for remote sellers because the state gives them a single local use tax rate as an alternative to tracking every local jurisdiction’s rate. That makes Texas compliance more manageable once you are registered, but it does not remove the need to review your past exposure. If you owe Texas sales tax but never registered, a VDA may be the cleanest path to fix the issue if you still qualify.
Sales Tax Compliance USA is a done-for-you service staffed by people who can help you evaluate Texas exposure, prepare the disclosure, and work through the Comptroller’s process. The exact position depends on your facts, records, and timing — if you are not sure whether you qualify, we can help you check it with the Texas Comptroller of Public Accounts.
What a Texas voluntary disclosure agreement is
Texas also uses the VDA process for other taxes and fees administered by the Comptroller, not just sales tax. That matters for businesses with multiple exposure points, such as sellers that also have franchise tax or other state-administered liabilities. The Comptroller’s office controls the process and decides whether the disclosure can proceed under the facts you provide.
Who qualifies for a Texas sales tax VDA
Texas does not require you to be a Texas-based business to qualify. Remote sellers can have exposure in Texas even if they are located elsewhere, and a VDA can be used to address that past exposure if the business meets the eligibility rules.
When you should register for Texas sales tax
For businesses already collecting Texas tax, the issue may be less about whether to register and more about whether prior filings were incomplete. If tax was collected from customers but not remitted, the Comptroller treats that category differently, and interest may still apply even when penalties are waived. That is one reason to review the facts carefully before making contact.
Which Texas sales tax liabilities a VDA can address
If your business has multiple tax exposures, the Comptroller may evaluate them together or separately depending on the request. A properly prepared disclosure should identify each tax type, any Texas accounts already open, and whether the company has collected but not remitted Texas tax.
How many years a Texas VDA covers
Because the lookback is tied to the initial contact date, timing matters. Businesses should avoid delaying once they decide to pursue a disclosure, because unnecessary delay can create uncertainty about what periods are still available for relief.
How to apply for a Texas voluntary disclosure agreement
Once the agreement is approved, the business is generally expected to register, file the necessary returns, and remit payment under the agreement’s instructions. If you need a payment arrangement, the request should say so up front, because the Comptroller asks whether the business anticipates problems making full payment.
What information and records you must provide
Because the process is built around voluntary disclosure, the records need to be reliable enough for the Comptroller to evaluate exposure and apply the agreement correctly. If the business’s books are incomplete, the estimate may need to be rebuilt from transaction data, bank records, or other source documents.
How penalties and interest work in a Texas VDA
A VDA is valuable partly because it can reduce the cost of getting current, but it is not a guarantee that every charge disappears. The right expectation is relief from the usual enforcement burden for qualifying voluntary disclosures, with special attention to any amounts that were collected from customers.
When it is too late to request a Texas VDA
The safest approach is to preserve the voluntary status of the disclosure. Once there is a formal state contact, you may lose the ability to use the VDA route, so timing and communication strategy matter from the beginning.
What happens after Texas approves the agreement
Because approval does not end the compliance obligation, businesses should also update their ongoing sales tax procedures. For remote sellers, that includes making sure the correct Texas collection method is being used going forward, including whether the business is using the single local use tax rate or destination-based local tax collection.
Texas VDA and remote seller compliance points that matter most
| Topic | Texas rule or mechanism |
|---|---|
| VDA eligibility | No prior contact by the Comptroller on the liability and no audit or examination notice for that issue |
| Lookback period | Usually four years from the date the business initially contacts the Comptroller |
| Collected but not remitted tax | No limit on the lookback period stated by the Comptroller |
| Penalty treatment | Penalties are generally waived for qualifying voluntary disclosures |
| Interest treatment | Interest is generally waived, except interest on tax collected from customers but not remitted |
| Remote seller collection method | May collect by ship-to destination or elect the single local use tax rate |
| Single local use tax rate | Alternative local rate for remote sellers, currently 1.75 percent |
| Registration system | Texas Webfile system and related Comptroller account setup |
| Authority | Texas Comptroller of Public Accounts |
Frequently asked questions
How many years does a Texas VDA cover?
The Comptroller says the review is limited to reports due four years from the date the business initially contacts the office. That is the normal lookback period for a Texas VDA. If the business collected tax from customers but did not remit it, there is no stated limit on the lookback period for that category.
Does a Texas VDA eliminate penalties?
Usually, yes for qualifying disclosures. The Comptroller states that statutory penalties and interest are waived in a VDA, except interest on taxes collected and not remitted. The exact result depends on the type of liability and whether customer-collected tax is involved.
Can I apply for a VDA after receiving an audit notice?
Usually not for the issue covered by the notice. A business does not qualify if it has received a notification of an audit or examination for the liability being disclosed. If the notice concerns a different issue, you should confirm the facts with the Texas Comptroller of Public Accounts right away.
Not sure how this applies to your business? We handle US sales tax registration, filing and remittance for ecommerce sellers as a fully managed service, for one fee. Book a free consultation and we will review your own position with you.
What happens if I owe Texas sales tax but never registered?
If the Comptroller has not already contacted you and you have not received an audit notice, a VDA may still be available even if you never registered. The usual next step is to evaluate exposure, prepare the disclosure, then register and file under the agreement’s terms. If state contact has already happened, the VDA route may no longer be available.
Do I need to collect Texas sales tax before applying for a VDA?
No. A VDA is about resolving past exposure, not about starting collection before you qualify or finish the process. In fact, if you collected tax from customers and did not remit it, that fact affects the disclosure and may change how interest is treated. Your current collection obligations should be reviewed separately.
What records are needed for a Texas voluntary disclosure agreement?
You need enough records to identify the business, the tax type, the Texas activity, and an estimate of what is owed. The Comptroller asks for entity type, business description, dates of Texas activity, tax type requested, any existing Texas tax accounts, whether the business was contacted by the Comptroller, whether tax was collected but not remitted, and an estimate of the amount due. Supporting sales, filing, and transaction records are commonly needed to back up the estimate.
How long does the Texas VDA process take?
The Comptroller’s published guidance does not give a fixed timeline, so the exact process length depends on the facts, the quality of the submission, and how quickly the needed information is provided. Some cases move faster than others. If timing matters for your business, the safest answer is to confirm the current pace with the Texas Comptroller of Public Accounts or have us check it for you.
What happens after Texas approves my voluntary disclosure agreement?
After approval, you must follow the agreement’s terms, which usually means registering if needed, filing the required returns for the covered periods, and paying the tax due. The business should use the Comptroller’s reporting process, including Texas Webfile where applicable, to complete the cleanup. Once those steps are finished, you move forward as a current filer instead of carrying unresolved past exposure.
How we handle this for you
The mechanics in Texas are manageable on their own; the cost is the time it takes every single filing period, in every state you are registered in. We are a managed service: our team registers you with the Texas Comptroller of Public Accounts, prepares and files your returns, and keeps you compliant period after period. You get one point of contact and one invoice — you do not get another dashboard to learn.
See our sales tax compliance services, check where you have obligations with the nexus calculator, or talk to us about Texas.
Official sources
- talking to us about your situation.” rel=”nofollow”>https://comptroller.texas.gov/taxes/publications/96-576.php
- https://comptroller.texas.gov/taxes/publications/94-171.php
- https://comptroller.texas.gov/taxes/publications/94-105.php
- https://comptroller.texas.gov/taxes/sales/remote-sellers.php
- https://comptroller.texas.gov/taxes/sales/use-tax.php
- https://comptroller.texas.gov/taxes/waivers/
Reviewed by Paul le Roux, CA(SA). Sales Tax Compliance USA handles US sales tax registration, filing and remittance for cross-border and domestic ecommerce sellers as a fully managed service.
This page is general information for educational purposes and does not constitute legal or tax advice. Sales tax rules change and depend on your specific facts. Consult a qualified tax professional about your own position.
Related guides
Other Texas guides: Audit defence · Economic nexus · Filing · Permit · Registration
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