Skip to Content
About MTC
Nexus Program
Audit Program
Nexus Program

Overview of
Multi-state Voluntary Disclosure

Please view the links below for more information regarding the Multi-state Voluntary Disclosure Program:


Multi-state Voluntary Disclosure allows a tax non-filer with potential liability in multiple U.S. states (including the District of Columbia) to negotiate a settlement agreement regarding back liability on favorable terms through a single point of contact and a single, uniform procedure.

General Terms

States offer this service through the Multistate Tax Commission because it is sometimes unclear how nexus (state jurisdiction to tax) applies to a particular taxpayer or situation, which may cause a taxpayer to not file in all the states in which it should.  The service eases the burden of coming into compliance in multiple states.  Multi-state voluntary disclosure does not determine whether nexus exists with respect to a taxpayer.  Instead, the parties set that issue aside and clear up the uncertainty about past tax periods through compromise.  The multi-state voluntary disclosure service is administered by the National Nexus Program, a division of the Multistate Tax Commission.

A non-filer may apply directly to states for voluntary disclosure.  However, when more than one state is involved, the non-filer will find multi-state voluntary disclosure to be faster and more efficient, and therefore less costly. There is no charge to a taxpayer or its representative for participation. The Multistate Tax Commission is funded by its member states.

Any type of tax administered by a state’s department of taxation or revenue is eligible.  The most common types are sales/use tax and the various business activity taxes, such as income tax.  Generally, contact with a state with respect to a type of tax disqualifies that taxpayer from participation in voluntary disclosure with respect to that type of tax in that state.  “Contact” includes filing a return, paying a tax, and receiving an inquiry from the state regarding the type of tax at issue.  See Procedures of Multi-state Voluntary Disclosure for details and exceptions.

Core Terms

The core terms of voluntary disclosure are:

 1.  Taxpayer files and pays back tax and interest with respect to the Lookback Period; and
 2.  State waives all penalty and all tax prior to the Lookback Period.

A state will expect the taxpayer to continue filing unless there is a material change in its nexus status.  The length of the Lookback Period is determined by individual state policy.  Three to four years is common.  The Commission cannot alter a state’s Lookback Period, but it welcomes requests to tailor a voluntary disclosure contract to a particular applicant’s needs.


The Multistate Tax Commission takes protection of applicant confidentiality very seriously.  An applicant’s identity will be disclosed only to a state with which the applicant has signed a voluntary disclosure agreement.  The Multistate Tax Commission does not disclose the existence or terms of a voluntary disclosure agreement to any other state, including those that have a pending or signed contract with that taxpayer.  And an applicant should not disclose any information in its application that would allow states or the Multistate Tax Commission to learn its identity.  In the event of accidental disclosure, Procedures of Multi-state Voluntary Disclosure prohibits the Commission and member states of the National Nexus Program to use that information (See section 7).  A state will know the applicant’s identity only after a legally binding voluntary disclosure contract has come into force. Until a contract is signed with a state, an applicant is known to that state only by its voluntary disclosure Case number, e.g., MTC 2012-502.  In addition to the confidentiality rules of the Commission’s Procedures of Multi-state Voluntary Disclosure (binding on the Commission and member states), the contract will require that the state and Commission maintain in perpetuity the taxpayer’s confidentiality as a voluntary disclosure participant.

Most communication is by telephone or e-mail.  All electronic communications originated by states or the Commission that contain confidential taxpayer information are encrypted for security.


The procedures described below are uniform procedures applicable to almost all states. A Commission staff member can explain the small number of individual state variations from these procedures.


A non-filer prepares an application online and submits it via a secure internet connection on the multi-state voluntary disclosure section of the Commission’s website.  A Word version and PDF version are available for e-mail or physical submission, if desired.  The applicant should not disclose information in the application that would identify it.


To provide for communication about the disclosure, the application requests contact information of the person managing the disclosure for the applicant.  If this person is a representative, such as an accountant or lawyer, the Commission does not routinely provide this to a state before the disclosure contract is signed, but it may do so unless instructed otherwise.  However, if the person managing the disclosure is the applicant, or his/her identity would disclose the identity of the applicant (such as in the case of an employee), the Commission does not disclose that contact information to anyone except 1) the affected state after a valid voluntary disclosure is in place, 2) any person with the applicant’s permission, and 3) any person upon order by a court with jurisdiction.  Confidentiality rules are addressed in Procedures of Multi-state Voluntary Disclosure.


The application also requests information that will be necessary to prepare a voluntary disclosure contract, such as:


a.   The applicant’s tax year end.


b.   Information about the general activities of the applicant within the states (it allows for answers that vary by state).  Great detail is usually not required and many applicants are able to answer this question in a few sentences.


c.   A rough estimate of the amount of tax that will be due for the previous three years.  Applicants should provide as much accuracy as is available, but this amount need only be approximate.  An acceptable answer in the absence of complete data would be, for example, that tax due is “probably between $500 and $5,000”.


Commission staff reviews the application to ensure that it has all the information a state will need to make a decision, and that it does not contain information that is unnecessary or that may lead to identification of the applicant.  Staff responds to the applicant within seven calendar days, usually less, generally providing a draft voluntary disclosure contract at that time for taxpayer review.  This contract, when accepted by state and taxpayer, will be the voluntary disclosure agreement that settles the applicant’s back liability.


The Commission welcomes requests to tailor the contract to meet individual taxpayer needs.  The Commission’s policy is to make its experience available to applicants regarding the types of special requests that a particular state is likely to accept or reject, while also honoring the applicant’s right to propose terms of its own choosing.  The Commission will forward to states any non-frivolous offer that an applicant requests.


When the applicant approves the draft contract, the Commission sends it to the states as the applicant’s offer of voluntary disclosure together with the applicant’s application (redacted of identifying information).  The application and the contract contain the applicant’s statement of its factual circumstances supporting its eligibility for voluntary disclosure, e.g., not under audit.


The applicant chooses the states (including District of Columbia) to receive an offer.  The Commission does not require the taxpayer to apply to all states in which it arguably has nexus.  A taxpayer may withdraw an application or submit a new one at any time.


States usually respond within thirty days by signing the voluntary disclosure contract and returning it to the Commission.  That then becomes the legal offer of the state to the applicant, who is still identified only by Case number.  The Commission forwards it to the applicant, who may accept or reject it.


If a state will not accept special terms requested by an applicant, it will generally counter-offer by returning the contract unsigned with a request that it be submitted again with amendment. Commission staff can arrange teleconferences with state personnel and otherwise facilitate communication to help the parties come to agreement.


If the applicant signs the contract and returns it to the Commission, it becomes a fully executed, legally binding contract between state and taxpayer.  Only at this point does the state become aware of the taxpayer’s identity.  The taxpayer returns the signed contract to the Commission together with tax returns and tax payment that are due with respect to the Lookback Period.  The Commission forwards these to the state. The Commission retains the original contract and provides a copy to the state and taxpayer each.  The state bills the taxpayer for interest, usually within about thirty days.


This concludes the multi-state voluntary disclosure process.  Commission staff remains available to assist with any problem that may arise later with respect to fulfillment of the disclosure agreement.  

Participating States

The Multistate Tax Commission’s National Nexus Program, which administers the multi-state voluntary disclosure service, is funded its member-states.  Please fine a list of member-states here: Member States.  Until July 1, 2014, a taxpayer may include any non-member states in its disclosure offer on the same basis as member-states, except for Nevada, Delaware, New York, and Ohio, which do not currently participate. The Commission will not accept applications for multi-state disclosure to non-members after June 30, 2014. 

The participating states are:

Alabama, Alaska, Arizona, Arkansas, California (SBE only), Colorado, Connecticut, District of Columbia, Florida, Georgia, Hawaii, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Jersey, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.

The seven non-participating states are:

New Mexico does not have a voluntary disclosure program of any kind, either through the Commission or otherwise.  Commission staff will on request provide a state contact person who can discuss managed audit and other possible courses of action.

Illinois offers voluntary disclosure, but does not work through the Commission.  Commission staff can provide a state contact person in Illinois to assist with voluntary disclosure in that state.

Delaware, Nevada, Ohio and New York do not participate in any way.

The California State Board of Equalization (sales tax) participates, but the California Franchise Tax Board (income/franchise tax) does not.

More Information

This is an overview of multi-state voluntary disclosure.  A few states require a different procedure.  A Commission staff member can explain this more fully.  You may also want to review Procedures of Multi-state Disclosure, which are the rules governing the Commission and participating member states with respect to multi-state voluntary disclosure.

The staff of the Multistate Tax Commission’s National Nexus Program looks forward to assisting you with multi-state voluntary disclosure.  For further information, please contact:

Thomas Shimkin
Director, National Nexus Program
Multistate Tax Commission
444 North Capitol Street, NW, Suite 425
Washington, DC 20001-1538
Telephone: 202-695-8140

Beats Kopfhorer Monster Beats By Dre Cheap Tiffany Co Jewellery Store Tiffany & Co Gioielli Tiffany Jewelry Cartier Love Bracelets AF t-shirts monster casque bijoux brigitte Tiffany And Co Outlet Gioielli di tiffany gioielli Monster studio Cuffie Beats