The Department’s position on disclosures is determined by the specifics of each disclosure applicant.
Guidelines for Voluntary Disclosure Applicants
To be considered for the Voluntary Disclosure Program, the disclosure applicant must not have been contacted by the Department before initiating the disclosure process. Requests for a Voluntary Disclosure should be sent to the Director of Compliance.
Ideally, a Voluntary Disclosure request contains the following information:
- The type of entity (corporation, partnership, etc.)
- A brief description of the company's business including its specific activities in the state of Vermont
- Date the company began business and date the company began business activities in Vermont
- Disclosure of the tax type (Sales and Use Tax, Meals and Rooms Tax, Corporate Income Tax, Withholding Tax, etc.) for which an Agreement is requested
- Specifying tax types the entity is already registered for in Vermont
- Whether the company has been contacted by the Vermont Department of Taxes
- Whether the company has collected, but not remitted, Vermont Tax
- An estimate of the amount of taxes due
- Any additional information or extenuating circumstances to support the request
Sales and Use Tax
If a legitimate claim is made for voluntary disclosure of sales and use tax, the Department will generally agree to limit prior period exposure to three (3) years or to the date exposure was established, whichever is the lesser period, unless the taxpayer has been collecting sales taxes but not paying. The Department may agree to waive all penalties for voluntary disclosures as long as the tax and interest due are paid when assessed.
If the taxpayer has been collecting sales taxes from customers and not paying the tax, the Department will extend the prior period exposure to include all liabilities of this type. The specific facts of each case will determine the penalties.
Questionable taxability: If there is questionable liability, that is, if it is not entirely clear whether a taxpayer’s sales are subject to sales tax, the Department may agree to prospective filing or to a limited prior period exposure.
Corporate and Business Income Tax
If a legitimate claim is made for corporate/business income tax, the Department will generally agree to limit prior period exposure to three (3) years or to the date exposure was established, whichever is the lesser period. The Department may agree to waive all penalties for voluntary disclosures as long as the tax and interest due are paid when assessed.
In the event that exposure is arguable or there is no traditional exposure, the Department may agree to prospective filing or to a shorter prior period exposure.
Other Taxes (Meals and Rooms Tax, Withholding Tax, Individual Income Tax, Etc.)
Applicants for voluntary disclosure for other taxes should contact the Department for time exposure, penalties, and other related information.
If you have questions or would like to apply, contact us at (802) 828-2514; by email; or mail your request to:
Vermont Department of Taxes
Attn: Director of Compliance
P. O. Box 429
Montpelier, VT 05601-042