Tax insight

Washington announces international remote seller voluntary disclosure program, revises existing program

Insight
5 minute read
December 11, 2025

What happened?

On November 20, 2025, the Washington Department of Revenue (DOR) announced it will offer a temporary International Remote Seller Voluntary Disclosure Program (VDP) from February 1, 2026 to May 31, 2026 that applies to foreign headquartered businesses with substantial nexus in Washington (physical presence in state or more than $100,000 in combined gross receipts sourced or attributed to Washington). Participating businesses can limit exposure with a one-year lookback for retail sales tax and a retailing business and occupation tax (retailing B&O) tax lookback of four years plus the current year, with a potential waiver of up to 39% of penalties.

Also, effective September 1, 2025, the DOR has implemented updates to its existing VDP, expanding relief for businesses that were previously registered or had limited enforcement contact. To qualify under this expansion, any prior registration or contact with the Department must have occurred before the Department’s lookback period (four years plus the current year). Businesses that qualify receive a full penalty waiver (39%). Businesses that do not qualify may be granted a waiver of the 5% assessment penalty within the existing VDP program.

[Voluntary Disclosure Program and International Remote Seller Voluntary Disclosure Program, Washington Department of Revenue (November 2025)]

Why is it relevant?

The expanded VDP and the new International Remote Seller VDP provide businesses, including remote sellers and marketplace facilitators headquartered outside the United States, an opportunity to voluntarily comply with Washington tax laws, limit exposure to penalties, and reduce the lookback period for prior liabilities.

Actions to consider

Businesses with outstanding B&O and retail sales tax liabilities should review their eligibility for the programs. Timely application and completion of required documentation are necessary to maximize penalty relief and limit the lookback period.