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Home > Nexus Program > Multistate Voluntary Disclosure 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:

The Lookback Period: Taxpayer files and pays back tax and interest; State waives penalties.
 2.  Prior to the Lookback Period: Tax payer’s liability is extinguished – State waives all tax, interest, and penalty.
3. The Commission does not process disclosures when the good-faith estimate of tax due is less than $500. Taxpayers with minimal back liability may wish to pay back liability on its first return. 


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.  The Commission will disclose an applicant’s identity 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.  An applicant need 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.

Secure e-mail is available when sending confidential taxpayer information. 


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.


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 also available.


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.  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.  A range is acceptable, such as “likely between $500 and $5,000”.  The Commission does not process disclosures when the good-faith estimate of tax due is less than $500.


Commission staff reviews the application and provides a draft contract for review.


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.


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.


A state may 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.  The taxpayer then returns the signed contract to the Commission together with tax returns and payment.  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 National Nexus Program serves only states that are members of the program.  Please click here for a list of NNP Members.   

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 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.  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