Voluntary Disclosure: Fixing Past Exposure
If you missed nexus in the past, there is a path forward. Here is the idea behind voluntary disclosure.
Voluntary disclosure is coming forward to a state to settle sales tax you should have collected in the past, often on better terms than if the state finds you first. Discovering past exposure is common for growing sellers, and the worst move is to ignore it. Weigh the decision with a professional, then stay current.
Past exposure happens
Many growing sellers discover they crossed a threshold in a state months or years ago without collecting. It is a common situation, and the worst response is to ignore it and hope. Related: Multi State Selling Without the Panic
Keep reading: Economic Nexus: A State by State Reality, How to Know When You Are Approaching Nexus, Registering in a New State, Step by Step. See how ShopTaxie helps you sales tax nexus tracking and filing reminders.
A path to come forward
States generally offer a way to come forward voluntarily and settle past obligations, often on better terms than if the state finds you first. The details vary, but the principle is that proactivity is rewarded. Related: What is the best way to build a filing calendar for sales tax deadlines across several states?
Weigh it with a professional
Deciding whether and how to disclose past exposure is a judgment call with real financial stakes. This is a moment to work with a sales tax professional rather than guess, because the right approach depends on your specifics. Related: How do you know whether your SaaS subscription is taxable in a state where you have nexus?
Then stay current
The point of fixing the past is to move on cleanly. Once resolved, good ongoing tracking keeps you from repeating the mistake, so past exposure becomes a one time correction, not a recurring problem.
- Discovering past exposure is common
- States offer ways to come forward voluntarily
- Weigh the decision with a sales tax professional
- Fix the past, then track well to stay current
Julien Jimenez
Julien Jimenez is an independent software builder based in Paris. He designs, ships, and operates focused SaaS products for small businesses and independent professionals. Read the full author page.
Frequently asked questions
Why come forward voluntarily instead of waiting?
States generally offer better terms to sellers who disclose past exposure than to those they discover first. Proactivity is rewarded, and ignoring the problem and hoping is the worst response.
Should I handle a voluntary disclosure on my own?
It is wiser to work with a sales tax professional. Deciding whether and how to disclose is a judgment call with real financial stakes, and the right approach depends on your specifics.
Know where you owe before it is a problem
Sales tax nexus tracking and filing reminders. ShopTaxie is built to help you put this into practice.
Check my nexusMore from the ShopTaxie blog
Economic Nexus: A State by State Reality
How to Know When You Are Approaching Nexus
Registering in a New State, Step by Step
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