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Marilyn A. Wethekam Discusses Wayfair and Voluntary Disclosure Agreements with Bloomberg Law Tax

Bloomberg Law Tax - Daily Tax Report 11/17/2020

The world of e-commerce selling is still adapting to the U.S. Supreme Court’s groundbreaking 2018 ruling in South Dakota v. Wayfair , which permitted states to impose tax collection duties on remote retailers based on economic activity in a state rather than physical presence.

State and local tax agencies have seen surging interest in their voluntary disclosure agreement programs following the Wayfair ruling as businesses seek leniency for past sales tax liabilities.

Alan Levine, chief counsel for the District of Columbia Office of Tax and Revenue, called “VDAs”—voluntary settlements permitting businesses to pay previously unreported tax debts—a “win-win” for taxpayers and tax departments.

Marilyn A. Wethekam said HMB had processed roughly 150 VDAs during 2020—a number she described as “unbelievable” when compared to previous periods.

“They are primarily sales tax, I mean totally sales tax, and it’s pretty much driven by Wayfair,” Wethekam said during the same tax administrators meeting.

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