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State Tax Amnesty Comes to Idaho

Added by Richard G. Smith, John McGown, Jr. in Articles & Publications, Tax Law on September 7, 2017

The Multistate Tax Commission was created to empower the states to protect their sovereign authority to impose taxes and avoid federal preemption. It was created in 1967 as an effort by states to protect their taxing authority in the face of proposals to transfer key features of state laws from state legislatures to the federal government. The commission was established to be, and it continues to be, a voice for preserving the authority of states to determine their own tax policy within the limits of the U.S. Constitution.

It performs an audit function for participating states. That audit function has included a “Multistate Voluntary Disclosure Program.” That Program was temporarily expanded to create the “Online Marketplace Seller Voluntary Disclosure Initiative.” The Initiative is in effect an amnesty program to encourage a limited group of online sellers to enter the state taxing system.

Idaho is a compact member of the Multistate Tax Commission. It also is participating in the Initiative. The Initiative started August 17, 2017 and is scheduled to end October 17, 2017 (Note: Extended until November 1, 2017).

Who qualifies for the Initiative? The requirements include:

  1. Taxpayer has not registered as a seller or retailer, nor filed returns or paid tax with an applicable participating state.
  2. Taxpayer is an online seller utilizing a marketplace provider or facilitator such as Fulfillment by Amazon.
  3. Taxpayer has made a timely application for entry into the voluntary tax disclosure plan.
  4. Taxpayer agrees to register and pay taxes prospectively in the applicable participating states not later than Dec. 1, 2017.

The specific details of the Initiative are found on the Multistate Tax Commission Website. The link is: http://www.mtc.gov/Nexus-Program/Online-Marketplace-Seller-Initiative. To encourage participation, the application process is anonymous.

Idaho delayed its announcement about participating in the Initiative. Perhaps it has been putting its administrative process in place.

Should you want further information, you can contact Hawley Troxell attorneys Rick Smith (208-388-4932) or John McGown (208-344-6000).