19 Jun 2012
2 min read

New chart: Sales Tax VDAs by State

Discover the benefits and variations in state Voluntary Disclosure Agreement (VDA) programs for sales tax compliance.
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Voluntary disclosure agreements are a useful way to mitigate past liabilities while becoming compliant for sales tax purposes. Nearly every state offers a VDA program for sales tax, and if you qualify and take advantage, it could save quite the headache. One of the challenges is that VDA programs vary widely by state, and keeping up with the changes and variations between the states is a handful.

In the state of Texas for example, a VDA will waive all penalties and interest associated with any back taxes you may owe, and they will limit themselves to a four-year look-back period. Hawaii, however, will waive penalties but will require a 10-year look-back period and no interest waiver.

Oklahoma offers a VDA program with a three-year look-back, and the department will also grant a full penalty waiver and will reduce the interest by half. Compare that with the state of Iowa, whose look-back period is dependent on the amount of time your business has been operating in the state and can be up to five years, while offering a penalty waiver with no interest waiver.

In addition to what they offer, states vary in their requirements to qualify for a VDA. The state of California for example, will only enter into a VDA with a taxpayer if they have not been contacted by the state or any of its offices, and the taxpayer cannot be under audit.

Contrast this position with Maine’s VDA, where taxpayers who have been contacted by the state are not automatically disqualified from the program unless they are under a criminal investigation.

Because of the variations between states, tracking down this information would be incredibly time consuming. To save you from the hassle we have composed a chart detailing the differences between the state VDA programs. This is not meant to be exhaustive, but it can give you some helpful information on how best to proceed in your situation. If you would like a copy of the chart, just let us know.


Voluntary Disclosure Agreements (VDAs) offer a valuable path to achieve sales tax compliance while mitigating past tax liabilities. However, it's crucial to understand that VDA programs differ significantly from state to state. These variations encompass look-back periods, penalty and interest waivers, and eligibility requirements. As illustrated in the chart, states like Texas provide a four-year look-back with full penalty and interest waivers, while Hawaii requires a 10-year look-back and does not waive interest. This diversity makes tracking VDA details a time-consuming task. The chart, although not exhaustive, offers a helpful reference for businesses seeking to navigate VDA programs in different states. It's essential to assess the specific requirements and benefits of your state's VDA program to determine the best approach to achieve sales tax compliance and reduce past liabilities.
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