Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...
By Ryan Prete
The Multistate Tax Commission’s Online Voluntary Disclosure Program is estimated to bring in an additional $51.1 million in annual sales and use tax revenue to participating states, according to a new report.
Richard Cram, director of the MTC’s National Nexus Program, told Bloomberg Tax he considered that number to be a great success, and that a few participating states had already contacted him to laud the program’s success.
The estimate is part of Cram’s new report, which will be formally presented at the MTC’s Spring Committee Meetings in Bloomington, Minn., April 23 to 26.
The Nexus Committee will discuss whether to offer the program again before the U.S. Supreme Court rules in South Dakota v. Wayfair—a case challenging the 1992 decision in Quill Corp. v. North Dakota prohibiting states from mandating remote retailers collect sales tax, Cram said. Practitioners expect the high court will issue a decision by late June.
The program was originally established in July 2017 with a registration window of Aug. 17 to Nov. 1, 2017.
The online seller voluntary disclosure program reeled in 852 applications from third-party marketplace sellers who use websites like Amazon.com to sell goods. Cram said only about half of those sellers went on to formally sign agreements to voluntarily collect and remit sales and use taxes, but that a handful of large sellers significantly boosted estimated revenue.
The report states that 80 online marketplace sellers with estimated back tax liability for the prior four tax years of over $100,000 signed agreements. These 80 sellers accounted for 95.7 percent of the annual potential tax revenue, according to the report.
Of the 24 states (plus the District of Columbia) that participated in the program, four—Colorado, Massachusetts, Minnesota, and Wisconsin—applied lookback periods for sellers who participated in the program. Wisconsin took in over $450,000 in back sales and use taxes. Minnesota was second with over $290,000.
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