Yes. A remote seller may be able to settle past-due sales tax through the Multistate Tax Commission’s Multistate Voluntary Disclosure Program (MVDP), which coordinates voluntary disclosure requests with participating states. If a state accepts the seller and the seller meets the agreement’s terms, the seller generally files returns and pays tax and interest for an agreed lookback period; the state may waive penalties and may limit assessment for earlier periods. Relief is not automatic, and each state decides its terms.
Key takeaways
- The MTC program can coordinate disclosures, but each state decides eligibility and relief.
- Lookback periods vary by state; collected-but-unremitted tax may be treated differently.
- Check nexus and marketplace activity state by state before applying or registering.
- Penalty relief may be available, but interest is generally due unless expressly waived.
- After settlement, register, file, pay, and monitor nexus on an ongoing basis.
What the multistate program does—and its current status
A multistate voluntary disclosure program gives a business with possible tax obligations in more than one state a coordinated way to approach participating state tax authorities. The MTC’s National Nexus Program (NNP) staff handles the multistate process, but the resulting voluntary disclosure agreement is with each state. It is a settlement and compliance process, not a blanket amnesty or a single payment that clears every state.
The MTC currently lists 38 participating jurisdictions, including the District of Columbia. Participation is not the same as acceptance of every applicant or every tax issue. A state may apply its own procedures, eligibility rules, lookback period, and agreement terms. The MTC also notes that some participating jurisdictions have special procedures, and New Mexico’s route is a managed audit rather than a standard voluntary disclosure agreement.
Illinois and New York are not listed as NNP members. A seller with possible obligations there should not assume the MVDP covers those states; separate state programs or direct contact may be relevant. The exact position here depends on your own facts, so it is worth confirming with the state directly or talking to us about your situation. For New York issues, our articles on Amazon FBA sales tax in New York and Back sales tax and penalties in New York provide additional context.
Check whether your business may qualify before applying
Eligibility is state-specific. In general, voluntary disclosure is intended for a taxpayer that has a potential tax obligation but has not already been contacted by the state about that liability. The MTC’s application instructions and each state’s rules govern whether a seller qualifies. Prior registration, prior filings, an audit or inquiry, or other contact with a state can affect eligibility, so do not assume that an application will be accepted simply because the business has not filed returns.
Before applying, identify the legal entity that made the sales, the states and tax types involved, when the business began relevant activity, whether it collected tax, and whether any state has contacted the business. Be candid and complete in the application. The MTC process may allow an initial anonymous approach, but anonymity is not universal: the MTC procedures identify exceptions, including South Carolina’s requirement that the applicant disclose its identity before the state agrees to an agreement.
If you have already received a notice, demand, audit letter, or registration request, get advice before submitting a voluntary disclosure request. The exact position depends on your circumstances—confirm with the state, or talk to us and we will check it for you.
Find the states where your business may owe sales tax
Start with nexus: the connection between your business and a state that can create a duty to register, collect, and remit sales tax. Physical presence can arise from business locations, employees, inventory, or other in-state activity. Remote sellers can also have economic nexus when their sales or transactions meet a state’s current rules. The tests differ by state and can change, so do not apply one state’s threshold nationwide.
Marketplace activity needs separate review. A marketplace may collect and remit tax on sales it facilitates where state law requires it, but that does not automatically resolve every obligation of the seller. Direct website sales, other channels, inventory stored in a state, and filing or registration requirements may still matter. For sellers using fulfillment networks, our articles on Amazon FBA sales tax in New Jersey, New Mexico, and New York illustrate why inventory location and state-specific rules deserve attention.
Build a state-by-state record using sales by destination, channel, dates, marketplace-collected tax, inventory locations, and business activity. Compare that record with each state revenue department’s current nexus and registration guidance. If the facts are unclear, the exact position depends on your circumstances—confirm with the state, or talk to us and we will check it for you.
Understand the lookback period and what you may have to pay
The lookback period is the set of past filing periods a state requires the seller to report and pay under the agreement. There is no single MVDP lookback that applies to every state: the MTC says each state determines its own period, and periods can vary by tax type and circumstances. The agreement may also require a return for the current, incomplete filing period when it becomes due.
Do not assume that a commonly quoted three-year or four-year period applies to your business. A state may use a different period, and collected-but-unremitted sales tax is treated differently from tax that was never collected. MTC procedures state that collected but unremitted tax generally must be paid without regard to the ordinary lookback limit and may carry penalties. The exact period and treatment must be confirmed with the state before you decide whether to apply.
For each candidate state, assemble transaction-level records and estimate taxable sales, tax collected, tax already remitted, and periods involved. The MTC’s state lookback chart is a useful starting point, but the state’s current agreement and rules control. Our articles on Back sales tax and penalties in New Jersey and New York discuss state-specific concerns that may be relevant to sellers with exposure there.
Know what relief may—and may not—cover
Penalty relief is a common benefit of a voluntary disclosure agreement, but it is not guaranteed in every case or for every liability. The MTC describes penalty waiver as a general program benefit subject to the agreement’s terms. A state may require full compliance with the agreement before granting relief, and collected-but-unremitted tax can be treated differently.
Interest is separate. The MTC’s general program terms say interest is due on unpaid obligations within the lookback period unless the state expressly waives it. Do not budget on the assumption that interest will be removed. The agreement should spell out what tax, interest, penalties, and earlier periods are covered, as well as any exceptions.
Voluntary disclosure can also limit exposure for periods before the lookback period, but the scope depends on the state agreement and exceptions. It is not immunity from future audits or a guarantee that every issue is resolved. Read the proposed agreement carefully and confirm the treatment of each tax period and any tax already collected from customers.
Which states participate in the MTC program?
The MTC member-state page currently marks these jurisdictions as NNP members: Alabama, Arizona, Arkansas, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Washington, and West Virginia.
The MTC page lists Alaska, California, Illinois, Indiana, Maine, Nevada, New York, Ohio, Pennsylvania, Virginia, and Wyoming as nonmembers. The MTC says it does not facilitate voluntary disclosures for nonmember states. Membership can change, so check the current MTC member list when planning an application rather than relying on an old list.
Participation does not mean identical treatment. The MTC procedures identify special state processes, including separate online steps for the District of Columbia, state-prepared agreements in Michigan and Texas, and a managed audit process in New Mexico. Confirm the current procedure for every state you intend to include.
Plan the application, registrations, and payment
Prepare a state-by-state exposure summary before applying: the entity name, relevant tax types, activity and sales periods, nexus facts, estimated liability, tax collected, and any state contact. The MTC application asks applicants to identify states and tax types and provide information under its instructions. A coordinated application can simplify the approach, but it does not replace state-specific review or guarantee that every state will accept the request.
Do not register or make a direct disclosure in a state before checking how that step affects voluntary disclosure eligibility and anonymity. Follow the MTC and state instructions in the required order. Once an agreement is accepted, the seller generally must register if required, file the specified returns, and pay the tax and interest due under the agreement. Missing a required step can jeopardize the negotiated relief.
Keep a copy of the signed agreement, filed returns, payment confirmations, and correspondence. If you need help coordinating the work, Sales Tax Compliance USA is a done-for-you service staffed by people. We can help review your sales-tax footprint, organize records, and manage registrations and filings; the state makes the final decision on eligibility and relief.
Stay compliant after settling past-due tax
Settling past-due tax does not end the seller’s ongoing obligations. After the agreement, register in each state as required, file returns at the assigned frequency, report marketplace and direct sales correctly, and remit tax by the state’s deadlines. Continue monitoring sales, inventory, employees, and other activity because a change in the business can create new obligations or affect existing ones.
Reconcile marketplace-collected tax with your own records and follow each state’s instructions for reporting those sales. Keep documentation supporting where orders shipped, which channel processed them, what tax was collected, and what was paid. If your business expands into a new state or changes fulfillment arrangements, reassess nexus rather than waiting for a notice.
A voluntary disclosure agreement addresses the liabilities and periods it covers; it is not a substitute for a durable filing process. The exact ongoing requirements depend on each state and the agreement. Confirm them with the state, or talk to us and we will check it for you.
MTC National Nexus Program participation and practical implications for remote sellers (check the current MTC list before applying)
| Jurisdiction group | MTC NNP status | What a remote seller should do |
|---|---|---|
| Participating jurisdictions | MTC lists 38 members, including the District of Columbia | Consider the coordinated MVDP route, then verify eligibility, lookback, and state-specific procedures. |
| Nonmember jurisdictions | MTC lists Alaska, California, Illinois, Indiana, Maine, Nevada, New York, Ohio, Pennsylvania, Virginia, and Wyoming as nonmembers | Do not assume the MTC application covers these states; check the state’s own disclosure or amnesty options. |
| New Mexico | Listed as an NNP member, with a managed-audit route rather than a standard voluntary disclosure agreement | Confirm the state’s managed-audit requirements and how they apply to the seller’s facts. |
| District of Columbia, Michigan, Texas, and South Carolina | Participating, with special procedures identified in MTC materials | Check whether a separate state submission, state-prepared agreement, or identity disclosure is required. |
| Any state where tax was collected but not remitted | Treatment may differ from ordinary uncollected-tax exposure | Identify collected amounts separately; the ordinary lookback limit and penalty relief may not apply in the same way. |
Frequently asked questions
What is a multistate voluntary disclosure program?
It is a coordinated process for approaching multiple participating state tax authorities about unreported tax obligations. Each state decides whether to accept the seller and sets the agreement terms, including the lookback period, required filings, payment, and available relief.
Can a remote seller disclose unpaid sales tax voluntarily?
Yes, a remote seller may be able to disclose unpaid sales tax through the MTC program or a state program, depending on eligibility and state participation. Prior state contact, registration, or other facts can affect eligibility, so check before contacting or registering with the state.
What is the lookback period for a sales tax voluntary disclosure?
There is no universal period. Each state sets its own lookback, which can vary by tax type and circumstances; collected-but-unremitted tax may be treated differently and may not be limited by the ordinary lookback.
Do states waive penalties under a voluntary disclosure agreement?
Penalty relief is commonly available under MVDP agreements, but it depends on the state and the agreement’s terms. Interest on tax within the lookback period is generally due unless the state expressly waives it, and collected tax may have different treatment.
Which states participate in the Multistate Tax Commission’s program?
The MTC currently lists 38 NNP members, including the District of Columbia: Alabama, Arizona, Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Washington, and West Virginia. Check the MTC member list for current status and special state procedures.
How does a remote seller determine whether it owes sales tax in a state?
Review each state’s current rules for physical and economic nexus, then compare them with the seller’s locations, inventory, employees, sales, transactions, and marketplace activity. Marketplace collection does not necessarily resolve every seller obligation, so assess direct sales and filing requirements separately.
What must a remote seller do to qualify for the program?
The seller must meet the MTC and each state’s eligibility requirements, provide the requested information, and follow the application process. Eligibility can be affected by prior state contact, existing registration or filings, and the nature of the liability; acceptance is not automatic.
Will a remote seller need to register and file returns after settling past-due tax?
Generally, yes, if required by the state and the agreement. The seller typically registers, files returns for the agreed periods, pays the required tax and interest, and continues filing and paying on an ongoing basis.
Official sources
- https://www.mtc.gov/nexus/multistate-voluntary-disclosure-program/
- https://www.mtc.gov/nexus/faq/
- https://www.mtc.gov/nexus/member-states/
- https://www.mtc.gov/nexus/multistate-voluntary-disclosure-application/
- https://www.mtc.gov/wp-content/uploads/2025/08/MVDP-Procedures-Revised.pdf
Related reading
- Amazon FBA sales tax in New Jersey
- Amazon FBA sales tax in New Mexico
- Amazon FBA sales tax in New York
- Back sales tax and penalties in New Jersey
- Our sales tax compliance services
Getting this handled
If you would rather not work this out yourself, that is what we do. We register you, file your returns and keep you compliant across every state where you have an obligation — one point of contact, one invoice. Talk to us about your situation.
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 article 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.