Florida to Join the MTC Sales Tax Amnesty Program
Estimated reading time: 3 minutes.
(Updated December 2020).
In 2017, we received word from our friends at the PROSPER Show that Florida had joined the MTC Sales Tax Amnesty program.
The amnesty was geared towards online sellers with the idea being that they could negotiate to be forgiven some or all of their back taxes, as well as any applicable interest and penalties.
Sellers had to meet certain eligibility criteria and apply for the amnesty between the 17th of August 2017, to the 17th of October 2017.
There are significant challenges faced by Amazon sellers and other marketplace sellers in tracking, collating and remitting tax returns. This amnesty represented a golden opportunity to wipe the slate clean and start over.
Hopefully, they started over with intelligent software such as A2X and TaxJar to automate accounting and avoid future tax troubles.
Detailed Information about the MTC Sales Tax Amnesty
This in-depth webinar about the MTC Sales Tax Amnesty Presentation describes the initiative in detail, and talks about how it impacted online sellers. The Sales Tax Amnesty offered an Amazon tax amnesty as well as amnesty for sellers on Shopify, eBay etc.
Which States participated in the program?
The program covered these states:
- Alabama
- Arkansas
- Colorado
- Connecticut
- Florida
- Idaho
- Kansas
- Kentucky
- Louisiana
- Nebraska
- New Jersey
- Oklahoma
- Texas
- Utah
- Vermont
Seven additional states considered participation and were due to indicate before the August 17 start date.
Some of these additional states required a limited look-back period for back tax liability.
For a detailed chart of states that participated in the amnesty program, please visit the Sales Tax Institute. This chart is also consistently updated to show current, recent, and upcoming amnesty programs for participating states.
Who Should Have Applied for the Amnesty?
Advice given by expert tax firm Anderson Global at the time of the amnesty stated:
“Online/remote sellers who are using a marketplace facilitator with owned inventory at the facilitator’s site likely have incurred nexus for both sales tax and income/franchise taxes.
Ecommerce sellers with inventory located at distribution/order-fulfilment centers in different states may also have nexus.
Taxpayers who have not been collecting/remitting sales or income/franchise taxes in such states where they conduct business or incur nexus could be at risk and should consider participating in this limited-time amnesty program that could provide relief from back taxes and related penalty and interest.”
According to the Sales Tax Institute, a record number of sellers participated in the amnesty program.
The Multistate Tax Commission was inundated with more than 8 times their usual applicants for the tax year, with at least a quarter of all applicants reporting over $100,000 in back tax liability.
In Summary
The Multistate Tax Commission (MTC) negotiated a special amnesty deal for online sellers. It was focused on sellers that may have sales and income tax obligations from previous unpaid taxes in 25 different states.
This special multi-state amnesty initiative program for online sellers ran from 17 August 2017, to 1 November 2017, and has now ended.
If you didn’t take advantage of the program but realize you need to evaluate your activities or make a voluntary disclosure, you can contact the relevant authorities here.
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