The Florida Department of Revenue has had a voluntary disclosure program for years. The program allows for a three year look-back period for which the taxpayer would pay any taxes owed with no penalty. Florida even offers a modified version for taxpayers who collected tax and failed to remit it. However, in these cases a nominal 5% penalty must be paid as well. The benefit provided the taxpayer in return is that the Department will not initiate an audit for prior periods for the tax at issue. In cases of tax collected but not remitted to the state, the taxpayer does not need to fear a criminal investigation relating to the tax disclosed and paid in the voluntary disclosure program.
With the landmark case of South Dakota vs. Wayfair, Inc., the Supreme Court of the United States has now allowed for states to require businesses to collect and remit tax even when the business has no physical presence within the state. Online remote retailers who operate nationally are now facing potential retroactive assessments across the country. As one of the largest states in the country, taxpayers are understandably concerned about liabilities for sales made into Florida.
Fortunately, the Florida Department of Revenue may offer a solution to remote sellers in light of the dramatic change in case precedent. If remote sellers act quickly, they may be able to begin collecting and remitting tax to Florida on a prospective basis without paying back taxes. In certain cases, and for a short period only, there may be opportunities for taxpayers substantially affected by the holding in Wayfair to drastically reduce their Florida sales tax liability through the voluntary disclosure program. If done properly, taxpayers may not have to pay three years of back taxes while still entering the voluntary disclosure program through which they can register and begin properly collecting and remitting on a go forward basis.
It is important that taxpayers have a professional, experienced team guide them through the process during these changing times in national sales tax laws. Your team at Moffa, Sutton, & Donnini, has decades of experience working with the Florida Department of Revenue and can help your business navigate the voluntary disclosure process while working to limit liability as much as possible. Wayfair offers a unique opportunity to remote sellers who act quickly and we are ready to help businesses take advantage of it while it exists. There will likely be guidance from many states forthcoming.
For more information on the Wayfair decision, please view our recent blog.
Gerald “Jerry” Donnini II is a shareholder of the Law Offices of Moffa, Sutton, & Donnini, P.A. Mr. Donnini concentrates in the area of state and Federal tax matters, with a heavy emphasis on the tobacco, alcohol, motor fuel and related industries. He also handles a myriad of multi-state state and local tax issues. Mr. Donnini is a co-author for CCH’s Expert Treatise Library: State Sales and Use Tax and writes extensively on multi-state tax issues for SalesTaxSupport.com. For more information please call us at 888-966-8216.