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Past Due Sales Tax Exposure Estimator

Reviewed for 2026, updated September 8, 2026.

Estimates the uncollected tax, penalties, and interest a seller may owe in a state where nexus was crossed but registration never happened, and how much a voluntary disclosure agreement would change the total.

Your numbers

Results update as you type.

Your estimate

Uncollected tax you owe...
Penalties and interest...
Estimated total exposure...
Added exposure per month of waiting...

Estimates only. Assumptions are listed below, and you can change every input.

Finding out you crossed nexus in a state a year or two ago is a bad afternoon. You did not collect tax from those customers, you cannot go back and charge them, and the state does not care that you did not know. What you can do is size the problem before deciding how to handle it, because the number is usually smaller than the panic suggests, and the choice between quietly registering, applying for voluntary disclosure, or waiting changes it materially.

This estimator multiplies your taxable sales into the state since you crossed by the combined tax rate to get the tax you should have collected, then adds a penalty at the rate you enter and simple interest on the balance. Because the tax built up over the whole period rather than all at once, interest is calculated as if the full balance had been outstanding for half the period. Choosing voluntary disclosure removes the penalty but keeps the interest, which is how most state programs are structured. The last figure shows roughly how much the number grows for every additional month you wait.

How to use this tool

  1. Enter your taxable direct sales into the state from the date you should have started collecting until today, and the combined state and local rate your customers would have paid.
  2. Enter the number of months in that window, then the penalty rate and annual interest rate you found for the state. Placeholders are filled in; replace them with real figures before relying on the total.
  3. Switch between voluntary disclosure and filing back returns to see what the penalty waiver is worth, and note how much waiting another month adds.

What the math assumes

  • Assumes taxable sales built up evenly across the months entered, so interest is applied to the full tax amount for half the period. Front-loaded sales would owe a little more interest, back-loaded a little less.
  • Uses simple annual interest, not compound, at the rate you enter. The default of 6 percent is a placeholder; states set their own rates and change them.
  • Applies the penalty as a flat percent of unpaid tax at the rate you enter. The default of 10 percent is a placeholder; states use different rates and some stack separate late filing and late payment penalties.
  • The voluntary disclosure option assumes the state waives penalties but still charges interest, which is the typical structure. It does not model lookback limits, which can shorten the exposure period under a VDA.
  • The added exposure per month is one more month of uncollected tax at your average monthly pace, plus penalty on it where penalties apply, plus one month of interest on the existing tax balance.

Frequently asked questions

Can I still collect the tax from past customers?

In practice, no. Once a sale is complete you generally cannot bill the customer for tax you failed to charge, so the uncollected tax comes out of your margin. That is why the tax line, not the penalties, is usually the biggest number here.

Is voluntary disclosure always the better option?

Not always. A VDA usually waives penalties and may limit how far back the state looks, but it takes time, often involves a representative, and you must apply before the state contacts you. For small exposure, registering and filing back returns can be cheaper and faster.

Why is interest calculated on half the period?

Because the tax was not all owed on day one. Each month of sales created a fresh liability, so the average dollar of tax has been outstanding for about half the total time. Charging interest on the whole balance for the whole period would overstate it.

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More free tools from ShopTaxie

  • Economic Nexus Threshold Runway Calculator: Estimates how close your sales into one state are to that state's economic nexus threshold and how many months of current sales it would take to cross, for remote sellers tracking exposure state by state.
  • Multi-State Sales Tax Filing Workload Calculator: Estimates how many sales tax returns you will file per year, the hours they take, what that labor costs, and how heavy your busiest month gets, for sellers registered in several states.

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