Massachusetts 2024 Amnesty Program
Michael J. Fleming is the founder and president of Sales Tax and More, a full-service consulting and solutions firm with a passion for state tax. He is one of the country's leading authorities on sales tax issues such as consulting and research, registrations, returns, nexus, drop-shipping, eCommerce, and service providers.
Michael is a renowned writer and speaker, and he regularly presents on webinars. He is also the host of the Sales Tax and More Podcast, where he shares his wisdom and learnings with his audience in order to help them navigate the tricky world of taxes.
In this episode…
Mike Fleming and Ellie Moffat discuss Massachusetts’s newest amnesty program that starts on November 1.
Here’s a glimpse of what you’ll learn:
Information about the Massachusetts Amnesty Program
Why Mike likes this Massachusetts amnesty
And what is different about this amnesty that makes Mike like it better than a VDA
Connect with Michael
Episode Transcript - Audio Version
[00:00:00] Welcome to Sales Tax and More, your go to resource for all things state tax related. Now, here is your host, Michael Fleming.
Michael Fleming: Hi, Mike Fleming here, founder of Sales Tax and More. And today's co host of the Sales Tax and More Podcast, where we talk about everybody's favorite topic, which is of course, sales tax. Now today we're going to talk about the Massachusetts amnesty program, but before I do, let me introduce you to my co host Ellie Moffat.
Ellie Moffat: Hey, everyone. Really great to be here. Please like and subscribe to this podcast. We really appreciate it really helps us out. And before we get started, I'm going to do a quick introduction for Sales Tax and [00:01:00] More. We are a full service consulting and solutions firm. So we have a really great team here of experienced tax professionals who are very dedicated to fulfilling your state tax and related needs.
So we do a lot of sales tax returns, sales tax registrations, consultations. research, audit defense, exemption certificate management, and like our name states more. So if you have questions about our services or you'd like to work with us, please reach out. We'd love to hear from you and we would love to work with you as well.
So Mike in general, you like VDA programs better than an amnesty. Why do you like this Massachusetts amnesty? And what is different about this amnesty that you like it better than a VDA?
Michael Fleming: Okay. So amnesties in general are not great programs because everyone hears the word amnesty and they think they don't have to pay anything, but they're not true amnesties.
You still have to pay all the back tax. Some are all of the penalty. And some are all of the [00:02:00] interest. Sometimes you don't pay any of the penalty or any of the interest, but that's going to depend on the actual amnesty, but you still have to pay all the back tax. So there's a lot of hype about these.
They're usually offered for short periods of time, 30, 60 days. And the state really hypes it. Everybody, they want you to sign up for this amnesty and pay them the money. So you're in a rush. You hear the word amnesty. Okay. I'm going to take advantage of this. And they sometimes have penalties for not taking advantage of it if they find you after the fact, but a VDA is usually a better solution.
And the reason why the VDA is a better solution is because in most instances, the amnesties don't have a limited look back period. In other words, let's say that you've had exposure for the last eight years. And you want to enter an amnesty. You got to pay eight years worth of back tax and then [00:03:00] perhaps some penalty and perhaps some interest, or maybe they'll waive both, but you're still paying eight years worth of back tax.
And that can really add up, especially over an eight year period. So let's use California. In a VDA there, if they find you, they're going to go back eight years. But if you enter into a VDA, then that's only three years. That's that limited look back period. So right away, you're removing five years worth of
back taxes and five years worth of penalty. And then the three years in the VDA, there's no penalty. So you still have to pay a hundred percent of the interest, it's a great tool. So that's why I usually like VDAs better than amnesties. However, in this amnesty, in certain instances there is a limited look back period.
So it's 36 months, it's three years. The amnesty is a much simpler [00:04:00] process than a VDA. VDA is a fairly formal process in most states. So it's a simpler process. It's also available in more instances. A lot of times a VDA is not available if you're already registered with the state where an amnesty is. A lot of times a VDA is not available if you've already been contacted by the state where an amnesty is available.
So there are certain times an amnesty could be better than a VDA, but in general, because of that limited look back period, I like the VDA better. In this instance, you've got a three year look back period with the Massachusetts amnesty and it's going to waive the penalty there, most penalties if not all penalties.
So that's a pretty good program. The fact that it's easier, it's available to more people. I would want to use the amnesty in this instance over a VDA. And that's not [00:05:00] usually what I would say. Usually, I would only use an amnesty if I absolutely had to, if a VDA was not available or just didn't make financial sense.
So this media, excuse me, this amnesty starts on November 1st of 2024. It runs through December 31st of 2024. So it is a short period. It's a 60 day period that this window is going to be open. And if you have any past exposure, now's the time to take advantage of it. I think that this is a really good program.
If you want to know more about it if you're eligible for it, if you should take advantage of it, please reach out. We can go through your specific facts and circumstances and decide if, or help you decide if this is something that you should take advantage of. But if you have exposure in other states remember VDA is usually the better program.
And in most [00:06:00] states if the state contacts you, the VDA is off the table. So you always want to be proactive. Once you find out you have issues, you'll want to look at getting them better because amnesties in general are few and far between. They may offer them 10 years apart. So it's not like they're there all the time where a VDA is there all of the time.
Never a true amnesty except if you're doing something through the streamlined sales tax program. And the only state that has a true amnesty for sales tax right now through that program is the state of Tennessee. So that's a great amnesty to utilize. But when it comes to normal amnesties, you still have to pay the back tax.
In this instance, you still have to pay all of the interest. You don't have to pay most penalties or all penalties depending on your circumstances. It is available for in state people. It's available if you've been contacted before. So I think this is a really good [00:07:00] program and it's something that if you have exposure or you think you may have exposure, it's definitely worth looking into what you rarely hear me say when I'm talking about amnesties.
So that's all I've got for you today. Ellie, you have any questions?
Ellie Moffat: I was just going to say so much so that we're making a podcast about it. It's such an exception to the rule here that there, that is why the podcast exists about it.
Michael Fleming: Absolutely. Normally, I don't even let people know that there's an amnesty and unless they don't qualify for the VDA, but I'm excited about this amnesty.
It's a really good amnesty. And these are few and far between where I come out and say, Hey, take advantage of this amnesty. And this is one of those.
Ellie Moffat: Yes. So take heed. And this if you have more questions, like Mike said, please reach out. We're happy to help you determine if this is a good program for you.
And if you have other needs for solutions or services, we offer many. Please reach out. We'd [00:08:00] love to hear from you again. We'd love to work with you. You can reach out to me directly at emoffat. That's E M O F F A T at sales tax and more. com or go to our website sales tax and more. com and thank you so much for listening.
We love having you here
Michael Fleming: Thank you everyone, and we hope to see you on the next installment of the Sales Tax and More Podcast. Bye. Bye.