Yesterday was the final deadline to apply for the Multistate Tax Commission’s sales tax amnesty. If you applied, you may be wondering what’s going to happen next. This post will help.
If you haven’t heard back from the Multistate Tax Commission yet
After you applied for amnesty, a lot of work went on behind the scenes. After receiving your application, the Multistate Tax Commission (MTC) then negotiated on your behalf with the state(s) where you applied for amnesty. Don’t worry. They kept you anonymous during this process so tax in the rare case that your amnesty application was denied you would not then be immediately exposed to sales tax liability. (Whew!)
Note that the MTC received double the amount of applications they expected, and 192 applications were only filed on the final day of the amnesty. Richard Cram, the head of the MTC, says in this article from Bloomberg BNA that they are suffering from a staffing shortage to execute all applications, but hope to get your answer back to you in a timely manner.
If you haven’t heard back from the MTC on your amnesty application, right now your best bet is to wait. Once you do hear back…
If your amnesty application was denied
Keep in mind that while it’s unlikely if you followed the MTC’s guidelines, your amnesty application can be denied. In this case, it’s up to you to decide whether you still register for a sales tax permit and start collecting sales tax, or continue not collecting sales tax in that state. You can check out our “When to Register for a Sales Tax Permit” blog post to help you make your decision.
If your amnesty application was approved
Once your amnesty application is approved, you will receive a notification signed by both the MTC and the state. Your next step is to follow the MTC’s instructions and register for a sales tax permit with the state(s) in which you applied for amnesty.
As a term of the amnesty, you must register by either December 1, 2017 or within 30 days of receiving notice that your amnesty application was approved.
Important: There’s also an extra step here. After registering for a sales tax permit, you’ll be required to sign the amnesty letter you received and send it back to the enclosed address/contact point along with either a copy of your paper sales tax registration or proof that you registered for a sales tax permit online.
Only then will you have fully taken advantage of the sales tax amnesty.
What if I applied in more than one state, but haven’t heard from them all?
According to Michael Fleming from Peisner Johnson, the MTC received a huge number of applications at the last minute. This means that, if you applied for amnesty in multiple states, you may not receive all of your application approval letters at the same time.
Remember, you’re required to register for amnesty in a state within 30 days of your approval in that state.
Said Fleming: “While you can wait for them all [of your amnesty notifications] to come in, be careful of the dates. You do not want your earlier states to expire as you wait for the lagging states. Our recommendation is to register for a sales tax permit and execute the agreements sooner rather than later even if you do not yet have a response for each state you remitted to.”
I’m registered to collect sales tax in my amnesty states. What’s next?
Once you’ve registered for a sales tax permit in a state, your next step is to set up sales tax collection in that state on all your shopping carts and marketplaces.
You can read our guide to setting up sales tax collection on Amazon here or watch our video here:
When you registered for a sales tax permit, the state assigned you a sales tax due date. When this date rolls around, your next step is to gather all your sales tax data and file a sales tax return.
This is where TaxJar helps. We connect with the shopping carts and marketplaces on which you sell and turn your sales tax transactions into a return-ready sales tax report.
Rather not deal with it? No worries, just enroll in TaxJar AutoFile and we’ll automatically file your sales tax returns for you, on time, every time.
Do you have any questions or something to say about sales tax amnesty? Start the conversation in the comments!