Missouri Voluntary Disclosure Agreement: What You Need to Know
If you are a business owner in Missouri, it is important to understand the implications of not properly reporting your sales and use taxes. However, it can be overwhelming to navigate the state`s tax laws on your own. That`s where the Missouri Voluntary Disclosure Agreement (VDA) can come in handy.
What is the Missouri Voluntary Disclosure Agreement?
A Missouri VDA is a program that offers businesses a way to voluntarily disclose any unreported or underreported tax liabilities in exchange for certain benefits and protections. The program is designed to incentivize businesses to come forward and rectify any past tax discrepancies rather than face potential penalties and fines. The program applies to both in-state and out-of-state businesses that have nexus (a sufficient connection to the state to require them to collect and remit sales and use taxes) in Missouri.
What are the Benefits of a Missouri VDA?
The Missouri VDA program offers several benefits to businesses who participate, including:
1. Limited lookback period: Under the program, businesses are only required to look back and report taxes for the previous four years, rather than the usual ten years.
2. Waiver of penalties: Participating businesses will have their penalties waived. This can be a significant financial benefit, as the state`s penalties can be steep.
3. Protection from audit: Participating businesses are protected from any sales and use tax audits related to the prior period covered by the VDA.
How to Participate in the Missouri VDA Program
To participate in the Missouri VDA program, a business must submit a written application to the Missouri Department of Revenue. The application will be reviewed by the department, and if accepted, the business will be required to disclose all unreported or underreported tax liabilities for the previous four years, file all required tax returns, and pay any taxes owed within 60 days of being accepted into the program.
It is important to note that the VDA program is not a one-time amnesty program. Businesses that have previously participated in a VDA for sales and use taxes in Missouri are not eligible to participate again.
Conclusion
The Missouri Voluntary Disclosure Agreement program can provide significant benefits and protections for businesses that have unreported or underreported tax liabilities. By participating in the program, businesses can limit their lookback period, waive penalties, and protect themselves from future audits. However, it is important to consult with a tax professional to determine if the program is right for your business.
