Yes—remote sellers should prepare now, but should not assume the streamlined remote-seller VDA is already available. The Streamlined Sales Tax Governing Board has proposed a voluntary disclosure program for qualifying remote sellers, generally built around a 24-month lookback, registration in participating states where economic nexus exists, payment of disclosed liabilities, and ongoing compliance. The proposal’s precise launch date and participating-state list must be confirmed before applying; the available proposal materials do not establish a final universal start date.
The program is aimed primarily at sellers that have not registered, reported, or been contacted for audit in a participating state and that have not collected but failed to remit that state’s sales tax. A seller that has already registered, received a registration notice, been audited, or collected tax without remitting it may be outside the streamlined terms, although a state’s ordinary VDA rules could still be relevant. Preparing transaction records, marketplace reports, warehouse details, nexus calculations, and tax-collection history now can make the difference between a controlled disclosure and a rushed one.
Key takeaways
- Prepare now, but verify that the streamlined program is finally open before applying.
- The proposed standard lookback is 24 months, subject to state-law exceptions.
- Marketplace sales and warehouse inventory must be analyzed separately in every state.
- Prior registration and collected-but-unremitted tax can block streamlined relief.
- A VDA requires registration, historical filings, payment, and continuing compliance.
What is changing in the streamlined remote-seller VDA program?
The proposed program would create a coordinated voluntary disclosure route for a qualified remote seller to address sales and use tax exposure in participating Streamlined Sales Tax states. Instead of approaching each state separately under potentially different procedures, the seller would use the Streamlined Sales Tax registration and disclosure process for the states in which it has economic nexus. Each participating state would still administer its own tax, review the disclosure, and determine the amount due under the agreement.
The central benefit proposed is a limited historical period. The proposal provides for a presumed 24-month lookback measured immediately before the seller registers through the Streamlined Sales Tax registration system, unless a participating state is legally required to use a longer period. The seller would generally agree to register where required, file the required returns or schedules, pay the disclosed balance or arrange an approved payment plan, and remain compliant while its nexus obligation continues.
This is not a blanket amnesty for every online seller or every historical liability. The proposal excludes important categories, including sellers that have already been registered or notified to register during the relevant period, sellers contacted for audit before registration, and sellers that collected but did not remit sales tax. Confirm the final program language and each state’s participation before relying on the proposed relief.
When will the program begin, and who may qualify?
The available program materials do not establish a final universal beginning date for the streamlined remote-seller VDA. They describe a proposed program whose operation depends on approval and participation by the relevant states. A seller should therefore treat the program as proposed unless the Streamlined Sales Tax Governing Board and the state tax authority have published a final opening date and application procedure.
Under the proposal, a qualified remote seller is generally a seller with sales into a participating state that create economic nexus but without the disqualifying history identified in the program rules. The seller must register, or agree to register, in every participating state where it has economic nexus; disclose and pay the required historical liability; comply with the program procedures; and stay registered while it remains above the applicable threshold. The proposed rules also contemplate that a seller cannot have used the program previously.
Qualification is state-specific. A seller may qualify in one state and not another because registration history, audit contacts, tax collection, warehouse activity, or state-law exceptions differ. The exact position depends on your circumstances—confirm with the state, or talk to us and we will check it for you.
Which sales-tax thresholds should remote sellers review?
Remote sellers should review both economic nexus and physical nexus. Economic nexus is usually measured by sales, transactions, or another state-defined activity level during a specified current or prior period. There is no single nationwide threshold that can safely be applied to every state. For example, Virginia describes a threshold of more than $100,000 in annual gross retail sales or at least 200 transactions, while Michigan uses more than $100,000 in gross sales or 200 or more separate transactions in the previous calendar year. Other states use different amounts, periods, definitions, or exclusions.
Do not assume that only taxable sales count. Iowa states that its remote-seller threshold is based on gross revenue from Iowa sales, including exempt, wholesale, resale, and marketplace-facilitated sales. Michigan likewise states that gross sales are used for the threshold and includes taxable, nontaxable, and exempt sales and transactions. Arizona, by contrast, states that sales made through a marketplace facilitator are not included in the remote seller’s Arizona threshold calculation. The treatment of marketplace sales is therefore state-specific.
Build a state-by-state schedule using gross sales, transaction counts, returns, cancellations, exempt sales, marketplace sales, and direct sales. Review the current rule for each destination state rather than relying on a general $100,000-or-200-transactions assumption.
Do marketplace sales or third-party warehouses change eligibility?
Marketplace sales can count toward economic nexus even when the marketplace collects and remits the tax, but the answer depends on the state. Iowa expressly includes marketplace-facilitated sales in its remote-seller threshold. Michigan requires the remote seller to consider gross sales and transactions, while its collection obligation may depend on whether the marketplace facilitator is required to remit on the seller’s behalf. New Jersey says marketplace transactions are collected and remitted by the facilitator, but a remote seller that exceeds the threshold may still need to register and may request non-reporting treatment for marketplace-only sales.
Inventory stored by a third-party warehouse can create physical nexus, but not uniformly. New Jersey identifies storage of inventory in the state as physical presence regardless of who owns the facility. Illinois provides a narrower rule: inventory at a marketplace facilitator’s Illinois location does not create physical presence when used exclusively to fulfill marketplace orders, but inventory used for the seller’s own orders, or both its own and marketplace orders, can create physical presence. Oklahoma also identifies an exception where the seller’s only presence is inventory owned by the seller and stored in an unrelated third-party warehouse over which the seller has no control.
Keep separate records for marketplace-only inventory, direct-to-consumer inventory, fulfillment locations, ownership, control, and the orders each location serves. A warehouse arrangement can affect both VDA eligibility and the states in which registration is required.
Where must a remote seller register for sales tax?
A remote seller generally must register in each state where it has a current sales-tax obligation, whether that obligation arises from economic nexus, physical presence, or another state rule. Under the proposed streamlined VDA, the seller would register or agree to register through the Streamlined Sales Tax centralized registration system in every participating state where economic nexus exists. Registration is not a substitute for filing: after registration, the seller must use the state’s required filing process and remit the tax due.
Marketplace collection does not automatically eliminate registration. Some states treat the marketplace facilitator as the tax remitter for marketplace transactions but still require a seller above the economic threshold to register or maintain a non-reporting account. Direct sales, exempt sales, inventory, employees, agents, returns, and fulfillment arrangements may create separate obligations.
Review registration state by state, including states where the seller has never charged tax. If a seller is already registered in a state, the proposed streamlined program may not be available there because the proposal excludes a seller previously registered or notified to register during the relevant period. An existing registration does not necessarily eliminate other VDA options, but it changes the analysis.
How far back could the VDA require disclosure?
The proposed standard lookback is 24 months immediately before the seller registers through the Streamlined Sales Tax system. A state may require a longer lookback if its law does not permit the proposed limitation. The proposed relief also does not protect tax that was already paid, reported, or collected by the state, and it is not designed to erase collected-but-unremitted tax.
Collected tax is especially important. State VDA rules commonly treat tax collected from customers as money held for the state. Washington states that collected but unremitted retail sales or use tax has an unlimited lookback under its general program. Louisiana, Ohio, Alabama, Texas, and the Multistate Tax Commission materials similarly describe exceptions or extended periods for collected-but-unremitted tax. The streamlined proposal expressly excludes a seller that has collected but not remitted sales tax for the state.
Accordingly, a seller should not calculate its exposure solely by multiplying the last 24 months of sales by an estimated tax rate. Reconcile tax charged on invoices, marketplace remittances, tax settings, customer refunds, and deposits. The exact position depends on your circumstances—confirm with the state, or talk to us and we will check it for you.
What penalties and interest might the program reduce?
A VDA typically exchanges voluntary registration, disclosure, payment, and future compliance for relief from some historical penalties and, depending on the state and program, some interest. The proposed streamlined program is intended to limit the seller’s historical exposure and provide sales-tax relief for qualifying uncollected or unpaid liabilities. It does not mean that every dollar of tax, interest, or penalty will be forgiven.
Tax itself generally remains payable for the required lookback period. Interest may remain payable, and state law may prevent a state from waiving it. Penalties associated with collected-but-unremitted tax are particularly unlikely to receive the same relief. Texas, for example, describes penalty and, in most cases, interest relief under its VDA program but preserves interest on taxes collected and not remitted. Washington states that its general program does not limit the lookback for collected-but-unremitted tax and applies a late-payment penalty to those amounts.
Obtain the written agreement before assuming the amount due. The agreement should identify the tax types, periods, filing obligations, payment terms, penalty treatment, and continuing compliance requirements.
What happens after a seller submits a VDA application?
Submission is the beginning of review, not the end of the process. The administering body or state tax authority will evaluate whether the seller meets the program conditions, whether the disclosed states and tax periods are complete, and whether the seller has a disqualifying registration, audit, notice, or collection history. Do not file back returns prematurely if the applicable procedure instructs you to wait for acceptance and an agreement; New York’s official process, for example, tells applicants to wait for an acceptance letter and agreement before filing the returns covered by the disclosure.
If accepted, the seller generally signs the written agreement, registers in the required states, files returns or spreadsheets for the permitted lookback, and pays the tax and any required interest or penalties. A state may allow or require a payment plan, but that must be agreed with the state. The seller must then file timely returns and remit tax going forward for as long as the nexus obligation continues.
Failure to sign, file, pay, or remain compliant can jeopardize the benefits. Keep the application, acceptance letter, signed agreement, returns, payment confirmations, and correspondence together. A completed VDA is an ongoing compliance commitment, not merely a settlement of old transactions.
What should remote sellers prepare before applying?
Start with a nexus inventory. List every state receiving shipments, annual gross sales, transaction counts, direct and marketplace sales, taxable and exempt sales, returns, and the dates thresholds were crossed. Identify inventory locations, third-party warehouses, fulfillment arrangements, employees, contractors, agents, and returns facilities. For digital goods or cloud services, classify the product separately because taxability differs by state; our article “Are more states taxing digital content and cloud services now” is a useful related review.
Next, reconcile tax collection. Export marketplace settlement reports, direct-store orders, invoices, payment records, tax charged, tax refunded, and tax remitted by marketplaces. Separate tax collected by the seller from tax collected by a marketplace. For foreign sellers, confirm federal and state identification information; our article “How to Get an EIN as a Foreign Seller for US Sales Tax (2026)” addresses an important administrative step.
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.
Finally, compare each state’s facts with its program rules. Illinois sellers can review “Sales tax for foreign sellers in Illinois,” and New York sellers can review “New York Sales Tax for Remote Sellers.” If Illinois is relevant, also review “Can illinois sellers use the 2026 remote-retailer amnesty?” Kentucky sellers should not rely on assumptions about thresholds; “Could kentucky’s sales-tax threshold now be lower than expected” highlights why state-specific verification matters. Prepare before applying, but submit only after confirming that the program is open, the state participates, and the proposed terms fit your facts.
Remote-seller VDA planning points and state-specific cautions
| Issue | What the proposed streamlined program generally does | Why state-by-state review still matters | Preparation step |
|---|---|---|---|
| Lookback | Presumed 24 months before registration, unless state law requires longer | Collected-but-unremitted tax may be outside the limitation; a state may have a longer legal period | Identify first taxable sale, first tax collection, and all periods with tax charged |
| Prior registration | The proposal generally excludes sellers previously registered or notified to register during the relevant period | A seller may still have access to an ordinary state VDA under different rules | Check registration accounts, prior applications, notices, and filing history |
| Marketplace sales | A seller must analyze marketplace activity when determining participating-state obligations | Iowa includes marketplace sales in its threshold; Arizona excludes marketplace-facilitated sales from the remote seller’s threshold; other states differ | Separate marketplace and direct sales by destination and period |
| Marketplace collection | Facilitator collection may affect filing and remittance duties but does not automatically resolve nexus | New Jersey may require registration even where a marketplace remits tax, with possible non-reporting treatment | Obtain facilitator tax statements and confirm the seller’s account status |
| Third-party warehouse | The program does not replace physical-nexus analysis | New Jersey treats in-state inventory as physical presence; Illinois and Oklahoma provide narrower exceptions in specified circumstances | Document warehouse ownership, control, location, and order routing |
| Tax collected but not remitted | Generally disqualifying for the proposed streamlined terms | State VDA rules commonly extend the lookback and preserve penalties or interest for trust-tax amounts | Reconcile tax charged against actual remittances before applying |
| After acceptance | Register, file the required historical returns or schedules, pay or arrange payment, and comply prospectively | Deadlines, forms, payment-plan terms, and penalties are controlled by the written state agreement | Do not miss signature, filing, payment, or ongoing-return deadlines |
Frequently asked questions
Who qualifies as a remote seller for the streamlined VDA program?
The proposed program is intended for a seller making remote sales into participating states without the disqualifying history described in the proposal. The seller generally must have economic nexus, register or agree to register where required, disclose and pay the required liability, and remain compliant going forward. Prior registration, an audit or registration notice, or collected-but-unremitted tax may prevent qualification.
When will the streamlined remote-seller VDA program begin?
The available proposal materials do not establish a final universal start date. The program should be treated as proposed until the Streamlined Sales Tax Governing Board and the relevant state tax authorities publish final approval, participation, and application details.
What is the proposed lookback period for participating sellers?
The proposed lookback is 24 months immediately before the seller registers through the Streamlined Sales Tax registration system. A participating state may require a longer period if its law requires one, and collected-but-unremitted tax may fall outside the proposed limitation.
Can a seller apply if it has already registered in a state?
The proposed streamlined terms generally exclude a seller previously registered in the state or notified to register during the relevant period. That does not necessarily prevent the seller from asking about the state’s ordinary VDA process, but the streamlined program may not be available.
Can a seller qualify if it collected but did not remit sales tax?
The proposed streamlined program excludes a seller that collected but did not remit sales tax for the state. State VDA rules commonly treat those amounts differently, often requiring disclosure for every period in which tax was collected and preserving some penalties or interest.
Do marketplace sales count toward economic nexus thresholds?
Sometimes. Iowa includes marketplace-facilitated sales in its threshold, while Arizona excludes marketplace-facilitated sales from the remote seller’s threshold calculation. Other states use their own definitions, so marketplace reports must be reviewed under each destination state’s rule.
Does inventory stored in a third-party warehouse create nexus?
It can, but the answer depends on the state and the warehouse arrangement. New Jersey treats in-state inventory as physical presence, while Illinois and Oklahoma describe specific exceptions in certain marketplace or uncontrolled third-party warehouse situations. Document where inventory is stored, who controls it, and which orders it fulfills.
What happens after a seller submits a VDA application?
The authority reviews eligibility and the disclosed facts. If accepted, the seller generally signs an agreement, registers, files the required historical returns or schedules, pays tax and required interest or penalties, and files and pays on a go-forward basis. Missing the agreement, filing, payment, or continuing-compliance requirements can put the VDA benefits at risk.
Official sources
- https://www.streamlinedsalestax.org/docs/default-source/comm-slac-documents/slac-2026/sl26005a—rule-402-1—remote-seller-voluntary-disclosure.pdf
- https://www.streamlinedsalestax.org/docs/default-source/comm-slac-documents/slac-2026/sl26005b—process—remote-seller-voluntary-disclosure.pdf
- https://www.mtc.gov/wp-content/uploads/2024/11/Memo-SST-VDA-Program.pdf
- https://www.iowa.gov/taxes/business-taxes/sales-use-excise-tax/remote-sellers-marketplace-facilitators
- https://www.michigan.gov/taxes/business-taxes/sales-use-tax/information/remote-seller-faq
- https://azdor.gov/business/transaction-privilege-tax-tpt/retail-sales-subject-tpt/out-state-sellers/economic-threshold
Related reading
- Sales tax for foreign sellers in Illinois
- Are more states taxing digital content and cloud services now
- Can illinois sellers use the 2026 remote-retailer amnesty?
- Could kentucky’s sales-tax threshold now be lower than expected
- 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.