The Texas Voluntary Disclosure Program offers a rare opportunity to fix tax compliance gaps before they become audit nightmares. If your business has unfiled sales tax returns or unreported liabilities, this program can help you come clean—while limiting penalties, interest, and exposure. But navigating the VDA process correctly is critical. One wrong step can cost you eligibility or trigger a deeper investigation.
That’s why businesses across Texas turn to experts like Hands Off Sales Tax (HOST). From VDA preparation to full compliance restoration, HOST helps you regain control—confidently and quietly—before the state comes knocking.
What Is the Texas Voluntary Disclosure Program (VDP)?
Texas businesses that uncover past tax liabilities can avoid the worst consequences by applying through the state’s Voluntary Disclosure Program (VDP). This program offers a confidential way to disclose tax obligations and resolve them proactively—before the Texas Comptroller finds you first.
Key Features of the Texas VDP:
- Eligibility: Available to businesses or individuals who have not been previously contacted by the Texas Comptroller about the tax in question. You must voluntarily come forward and have no history of prior compliance issues for that tax type.
- Benefits:
- Limited Look-Back Period: Generally capped at four years, even if your liability stretches back further.
- Penalty Waiver: Most penalties are fully waived for approved applicants.
- Interest Relief: While interest is usually still owed, it may be reduced in some cases depending on circumstances.
- Confidentiality: The process can be initiated anonymously through a third-party representative.
- Fast-Track Option: Texas offers an expedited process to speed up VDP resolution.
The Texas VDP is a second chance for businesses to fix issues quietly—and on their terms.
Is VDA Right for Your Business? (Decision Matrix)
Not every tax issue calls for a Voluntary Disclosure Agreement (VDA)—but for many businesses, it’s the smartest way to resolve hidden liabilities. Let’s break down when the Texas VDP is the right move.
Common Scenarios Where VDA Makes Sense
- Unfiled Nexus States: You’ve created nexus in Texas (via sales, inventory, or remote employees) but never registered or filed returns. A VDA limits your exposure to just four years and waives penalties—ideal for long-standing non-compliance.
Late Filings: You registered but missed returns sporadically. If the Comptroller hasn’t contacted you yet, VDA may still apply—but it depends on your filing history and the tax type. - Collected but Not Remitted: If you collected Texas sales tax and failed to remit it, a VDA can still apply—but the Comptroller will expect full payment of tax and interest. This scenario carries higher scrutiny.
VDA vs. Audit Risk
| Scenario | Audit Risk | Best Path |
| Never registered in Texas | High | VDA |
| Inconsistent filings | Medium | Possibly VDA or amended returns |
| Known liabilities, no contact | High | VDA |
| Received audit notice | VDA not allowed | Prepare for audit |
If you’re unsure where your business fits, a compliance specialist like HOST can help analyze your exposure and choose the safest resolution path.
Step-by-Step VDA Process & Timing
The Texas Voluntary Disclosure Program offers a clear, taxpayer-friendly process—but timing is everything. Once you begin, you’ll need to act quickly to stay compliant and protect your penalty waivers.
1. Initial Anonymous Outreach via BART
All Texas VDAs begin anonymously with a company representative initiating the VDA process by contacting the Business Activity Research Team (BART) in writing. This allows your representative (often a consultant or CPA) to initiate disclosure without revealing your identity.
Submit the written request by email to [email protected]; or mail to:
Texas Comptroller of Public Accounts
Business Activity Research Team
- O. Box 13003
Austin, Texas 78711-3003
2. Eligibility Confirmation & Agreement
Once your submission is reviewed, the Texas Comptroller will confirm if you’re eligible. Key requirements include:
- No prior contact from the Comptroller
- Voluntary disclosure of tax liability
- Registration and filing within the provided timeline
After approval, you’ll receive a formal Voluntary Disclosure Agreement outlining terms. Once the signed VDA is returned to the Texas Comptroller, and the taxpayer name has been disclosed, BART will complete the review process and obtain the signature of the Audit Division director.
3. 60-Day Reporting Window
After signing the agreement, you have 60 days to:
- Register for the appropriate tax accounts
- Submit all returns for the agreed lookback period (typically four years)
- Pay tax due (penalties waived; interest may still apply)
If needed, you may request a one-time 30-day extension, but this must be approved in advance.
4. Fast-Track VDA (Optional)
Texas also offers a Fast-Track VDA process for simple cases (e.g., limited sales activity, single tax type). This reduces back-and-forth and expedites approval.
Toolkit: DIY VDA Readiness
Before reaching out to the Texas Comptroller, it helps to have a basic toolkit in hand. This allows you to assess your risk, visualize your options, and estimate the potential benefits of using the Voluntary Disclosure Program.
VDA Timeline Chart
Here’s a sample timeline:
- Day 1–3: Anonymous submission via BART
- Week 1–2: Comptroller review & eligibility confirmation
- Week 2–3: Sign agreement
- Day 1–60 post-agreement: File returns, pay liability
Quick Savings Calculator
Use this simple formula to estimate potential savings:
Total tax due x Penalty (10%) + Interest (variable at ~4–6%) = Estimated waived cost
For example, $50,000 in unpaid tax could mean ~$5,000+ in waived penalties alone.
VDA vs Audit: Cost/Time Comparison
| Factor | VDA Route | Audit Route |
| Lookback Period | 4 years max | Up to 8 years (if fraud suspected) |
| Penalties | Waived | Full 10% or more |
| Interest | Possibly reduced | Full interest applies |
| Time to Close | ~2–3 months | 6–12+ months |
| Legal Risk | None | Potential criminal referral |
Having these tools ready lets you walk into a consultation—or file a VDA—with confidence.
Industry Spotlight: When VDA Makes Strategic Sense
The Texas Voluntary Disclosure Program (VDP) isn’t just for businesses in distress—it’s often a strategic move for companies looking to clean up nexus issues, mitigate penalties, or prepare for expansion. Here’s where it makes the most impact.
E-Commerce Sellers: Remote Nexus & Audit Amnesty
Online sellers who triggered nexus in Texas via remote sales—especially those with inventory in fulfillment centers or large transaction volumes—are often unaware they owe tax. The Texas VDP allows these sellers to resolve liabilities before they’re flagged for audit.
If caught before disclosure, sellers face full penalties and interest—making voluntary action the safer route.
Multistate Businesses: Texas First, Then Nationwide
Texas is not part of the MTC National Nexus Program, but completing a VDA here first can serve as a launchpad before tackling compliance elsewhere.
Unclaimed Property Holders: Separate VDA Path
Businesses with unclaimed wages, refunds, or credits may be subject to unclaimed property audits. Texas has a separate VDA for this—offering a 10-year lookback but with significant penalty relief if done proactively.
Understanding these use cases helps businesses act before exposure becomes liability.
Post-VDA: Sustain Compliance & Build Peace of Mind
Completing a Texas Voluntary Disclosure Agreement (VDA) is only half the battle. To avoid falling back into risk territory, businesses must implement strong compliance habits and controls immediately after the agreement is closed.
Internal Control Enhancements
Post-VDA is the perfect time to install or upgrade internal processes. These include:
- Sales tax matrix documentation to define taxability by product/service
- Defined filing calendars with responsible team members assigned
- Periodic internal audits to spot early errors before state notices arrive
Monthly Reconciliation & Automation
Staying compliant is easier with consistent reconciliation:
- Match reported sales tax to general ledger entries and POS data monthly
- Use automated sales tax software to reduce manual errors and improve tracking
Texas encourages using Webfile for returns and payments, streamlining oversight and reducing missed deadlines.
Registration & Ongoing Compliance
Once disclosed, the business must stay registered and up-to-date on:
- Rate changes by locality: Texas Local Rate Locator
- Certificate renewals and accurate exemption handling
- Timely filings for future periods to avoid reopening audit exposure
A well-handled VDA isn’t just a one-time fix—it’s a springboard to long-term peace of mind through structured tax discipline.
Why HOST Is the Partner You Need for Texas VDAs—and Beyond
Navigating the Texas Voluntary Disclosure Program (VDP) may seem straightforward, but the risks of missteps are real. From eligibility pitfalls to improper record prep, even small errors can derail your compliance goals. That’s where Hands Off Sales Tax (HOST) comes in.
End-to-End VDA Management
HOST provides full-service support through every stage of the Texas VDP process:
- Anonymous pre-clearance with the Comptroller via BART
- Eligibility review to confirm if your business qualifies
- Filing support including sales/use tax returns and documentation
- Penalty/interest abatement optimization
- Fast-track VDA preparation, where applicable
HOST handles the communication and filing on your behalf—so you don’t have to guess or worry.
Full-Spectrum Sales Tax Compliance
Beyond VDAs, HOST offers a complete compliance suite to help you avoid future exposure:
- Nexus analysis and registration across all U.S. states
- Monthly sales tax return filings
- Sales tax audit defense and controversy support
- Resale certificate generation via ResaleCertify
- Marketplace and platform integration (Shopify, Amazon, Stripe, etc.)
- Voluntary disclosure support for other jurisdictions
Whether you’re a remote seller, SaaS provider, or multistate retailer, HOST is your one-stop shop for simplifying sales tax complexity—and staying audit-ready.
From Cleanup to Confidence: Why Now Is the Time
The Texas Voluntary Disclosure Program isn’t just a way out of tax trouble—it’s a way forward. By addressing past liabilities before the state comes knocking, you protect your business, your peace of mind, and your future growth. But getting it right takes precision, strategy, and expertise.
That’s where HOST comes in. From eligibility to final filings, HOST guides you through every step of the VDA process and helps you build airtight compliance systems going forward.
Ready to resolve your exposure the smart way? Reach out to HOST today and reclaim control with confidence.
Frequently Asked Questions (FAQs)
1. Who qualifies for the Texas Voluntary Disclosure Program?
Any business or individual not currently registered or under audit with the Texas Comptroller may qualify. To remain eligible, you must not have been contacted by the state about your tax liability before applying.
2. What taxes can be disclosed under the VDA?
The program covers most Texas taxes, including sales and use tax, franchise tax, and others. There’s a separate VDA process for unclaimed property liabilities as well.
3. How long is the look-back period under the Texas VDA?
Typically, the Texas VDA limits the look-back to 4 years. This means you only need to report and pay liabilities for the most recent 48 months instead of a longer audit period.
4. Can I file a Texas VDA anonymously?
Yes. Your representative (like HOST) can initially contact the Texas Comptroller anonymously to confirm eligibility before disclosing your identity.
5. What happens after I complete the VDA?
Once you fulfill the agreement (reporting, payment, registration), you’re considered compliant moving forward. HOST can help you implement systems for monthly reconciliations, automation, and multi-state compliance to avoid future surprises.
