What is Washington’s 2026 Remote Seller Voluntary Disclosure Program?

It is a temporary program launched by the Washington State Department of Revenue to encourage international remote sellers to register, file, and pay overdue state taxes under more favorable terms, including reduced penalties.

Who is eligible to apply for the program?

Only non-US businesses are eligible, provided they have not registered with WDOR, filed taxes, or been contacted for audits or compliance inquiries during the current statutory period, and have not engaged in tax evasion.

When can businesses submit their voluntary disclosure application?

Applications must be submitted online through the WDOR portal between February 1 and March 31, 2026.

What penalties can be reduced under the program?

Eligible applicants may eliminate up to 39% of penalties, including those related to substantial underpayment, failure to register, and late filing.

What lookback periods apply under the program?

The lookback period is four years plus the current year for B&O tax, and 12 months for uncollected retail sales tax. If tax was collected but not remitted, the lookback period becomes unlimited.

Why should international businesses act quickly?

The program is offered for a short, fixed period, and businesses need time to gather the required data and documentation to complete their application before the deadline.

Washington’s 2026 Remote Seller Tax Disclosure Program Explained

The Washington State Department of Revenue (WDOR) announced that it will launch a temporary Voluntary Disclosure Program for international remote sellers in 2026 to encourage these businesses to comply with state sales and use tax rules and regulations, including registering for and paying any due taxes. As stated by WDOR, eligible taxable persons may eliminate up to 39% of potential penalties, including those for substantial underpayment, failure to register, and late filing.

Programs Duration Period, Eligibility Criteria, and Benefits

Taxable persons who want to participate in the Remote Seller Voluntary Disclosure Program must submit their online application between February 1 and March 31, 2026, through the WDOR portal. To qualify for the program, businesses must be based outside the US and meet several strict conditions. Therefore, non-US companies must not have been registered with the WDOR or filed taxes during the current statutory period, which covers the past four years plus the current year.

Additionally, to qualify, these businesses must not have been contacted by the WDOR for enforcement actions, such as audits or compliance inquiries, during that same period, ensuring the disclosure is truly voluntary and not prompted by an investigation. Since the program is intended for businesses that want to correct unintentional or non-fraudulent non-compliance, those who engaged in any form of tax evasion or misrepresentation are disqualified from participating.

Regarding benefits, in addition to reduced penalties, companies benefit from a significantly reduced lookback period: 4 years plus the current year for Business and Occupation (B&O) tax, and only 12 months for uncollected retail sales tax. However, if businesses collected sales or use tax but failed to remit it, the lookback period becomes unlimited, and the late payment penalty applies specifically to the unremitted amounts.

Conclusion

Eligible international businesses making taxable sales to consumers located in Washington State who are aware that they are unregistered and have established substantial nexus in Washington for state B&O and retail sales tax purposes, thus non-compliant with state-wide rules, will have an opportunity to come clean under more favourable terms. Since the program will be short, international businesses should act promptly and prepare all required data and documents for a timely application.

Source: Washington State Department of Revenue