United States

Indiana offers remote sellers one-time voluntary disclosure initiative

INSIGHT ARTICLE  | 

On May 2, 2018, the Indiana Department of Revenue issued a news release offering a special one-time limited voluntary disclosure initiative. The initiative is similar to the recent Multistate Tax Commission (MTC) Nexus Program that ran for two months in late 2017. The Indiana program is available to certain out-of-state online retailers that have inventory located in third-party Indiana warehouses and also sell to Indiana customers. The initiative will run through Dec. 31, 2018, and will provide certain benefits to qualifying participants. Specifically, the voluntary disclosure initiative will offer penalty abatement and a reduced look-back period. For qualified applicants, the look-back period includes:

  • One full calendar year (2017) plus the current period for sales and use tax and
  • One full calendar or fiscal year (2017) for income tax

To qualify for the department’s special voluntary disclosure initiative, applicants must meet the following criteria:

  • The applicant has inventory located in a third-party Indiana warehouse and sells to Indiana customers
  • The applicant has never filed tax returns in Indiana for the tax type in question
  • The applicant is not registered for the tax type in question and
  • The applicant has not been audited or contacted by the department about the tax type in question

Additionally, this program is not available to Indiana residents who already have a clearly defined sales and/or income tax filing obligation in the state.

Takeaways

The special voluntary disclosure initiative is different from the state’s standard voluntary disclosure by offering a more limited look-back of one year, instead of three. Taxpayers that may be subject to tax through third-party fulfillment programs and missed out on the MTC initiative should consider the Indiana program.

Additional information on the voluntary disclosure program may be found on the department’s website.

 

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