Sales Tax VDA Lookback Periods by State

A voluntary disclosure agreement, or VDA, is a deal with a state revenue department. You come forward and say you owe sales tax you never paid. The state looks back 3 or 4 years instead of everything, and drops most of the penalty. That is the trade.

Every state runs its own version and the terms are not the same. Washington limits the review to four years plus the current year and waives up to 39 percent in penalties. Texas looks at reports due four years back and waives interest too in most cases. Virginia uses three years. The gap between three and four years is real money.

Both columns come from one Washington page. It is the plainest published statement of the trade any state makes. Read it first.

This is the part that catches people. Most advice about sales tax, ours included, tells a founder to go and get a permit. Do that first in a state you already owe money in and you can lose the deal there entirely.

Washington puts it in writing. A business that had an active registration at the beginning of the lookback period “does not qualify for a Voluntary Disclosure Agreement”. Its application page then tells you the order. Applicants should register with the department after submitting the voluntary disclosure application, not before.

Three other states say something close. Read them together and the pattern is obvious.

Order beats speed here. Apply first, then register when the state tells you to. Being registered already is not the end of it. Washington may still waive its 5 percent assessment penalty, and Virginia still takes disclosures covering periods before the registration date.

It is not a universal rule, and Illinois is the reason to check rather than assume. Illinois wants you registered as part of the application, sending Form REG-1 in with Form BOA-2. So there is no safe blanket move. Read the state page before you touch either button.

The lookback period is the number that decides what this costs you. It is the run of past filing periods you have to file returns for and pay tax on. Everything older than that is waived.

The Multistate Tax Commission publishes the only complete cross state list of these periods. It is a PDF chart effective 1 January 2025, and it covers the 40 jurisdictions in its National Nexus Program. The table below is that chart, printed as published and read on 2 September 2026. Months mean complete prior months.

Twenty five sit at 36 months. Eight sit at 48, and Wisconsin runs 4 years plus the current year. Iowa is the longest at 60 months. Four have no sales or use tax to disclose. The chart carries its own caution, each state makes the final call after reading your application.

You do not have to write to every state separately. The Multistate Tax Commission runs one application that goes to as many member states as you name. Its National Nexus Program staff draft the agreements and pass them along. Four things matter before you start.

The member table lists all fifty states plus the District of Columbia. Forty are members. New Mexico is one of them but runs no voluntary disclosure programme, it takes managed audit applications through the same door instead. So 39 jurisdictions actually hand you a VDA this way.

Eleven are outside it. Six are verified below, and they include the biggest consumer market in the country. If you owe money in any of these, you approach that state yourself.

California is the one to read carefully. Its programme covers use tax and excludes sales by anyone subject to California sales tax, so it is narrower than the name suggests. It also cuts the assessment window from eight years to three, which is the largest single saving of any state on this page.

One situation no state forgives. If you charged customers sales tax and kept the money, that money belongs to the state and is sitting in your account. Every programme on this page treats it separately from tax you simply never charged.

Nine states and the Commission say a version of the same thing. The lookback stops being 3 or 4 years. It reaches the first dollar you collected.

Split your numbers before you write to anyone. Tax you should have charged and did not is one pile. Tax you did charge and kept is another. The examiner will separate them anyway.

Most states let you open the conversation without saying who you are. That matters. The alternative is telling a revenue department you owe it money before you know what it will charge you.

Anonymity is a clock, not a shield. Washington protects you from discovery for those 15 days only, and if the department finds the business before you reapply the seven year lookback comes back. Use the time to get your numbers straight, not to think it over.

Washington is running three temporary programmes alongside the standard one. Each has a hard end date. They were live on the department’s page on 2 September 2026.

The first closes this year. If Washington is on your list and interest is the part that hurts, look at that window now. Interest relief is otherwise the one thing no state on this page offers.

Two kinds of figure appear above and they are not equally strong. Here is which is which.

None of this is tax advice. It is no substitute for a specialist who can look at your actual numbers. What the page gives you is the order of operations and the size of the prize, so you walk into that conversation knowing what to ask for.

VDA stands for voluntary disclosure agreement. It is a written agreement between a business and a state revenue department covering tax the business should have paid and did not. The business files the back returns and pays the tax and interest. The state limits how many years it looks at and waives most of the penalty. Texas, Georgia and Washington all use the same three letters for it.

It is a way of filing late returns on agreed terms instead of waiting to be caught. You approach the state, usually anonymously at first, and say what you think you owe. The state sets a lookback period. For sales tax that is commonly 36 or 48 months, and you file and pay for that window only. Everything older is waived, and penalties are waived or reduced.

You or a representative contact the state, or the Multistate Tax Commission if you need several states at once. You describe the business and estimate the tax owed. The state reviews it and sends a draft agreement. You sign it. Then you register if the state asks, file the back returns and pay. Washington wants the signed agreement inside 30 days, and Texas wants payment inside 60.

You become a normal registered taxpayer in that state. The periods inside the agreement stay open to a future audit, Texas says so on its own page, so this is not a release. From the agreement end date you file and pay like anyone else. Break the terms and states may withdraw the penalty waiver or void the agreement. That is the risk.

Texas limits its review to reports due four years from the date the business first contacts the Comptroller. That covers every tax it administers, not sales tax alone. One exception has no limit. It is tax you collected from customers and never remitted. Unclaimed property VDAs are a separate thing entirely, and those run a ten year lookback.

Georgia runs a VDA programme through its Department of Revenue. The lookback is usually 36 months. Georgia says it will extend as far back as needed to recover tax a taxpayer collected and did not remit. Penalties are generally waived for the periods inside the agreement, but interest is still charged on everything due. Anonymous requests are accepted if a representative is named.