Washington’s New International Remote Seller Voluntary Disclosure Program: Why Its Better Than the Traditional VDA

In late 2025, the Washington Department of Revenue introduced a limited International Remote Seller Voluntary Disclosure Program, creating a unique compliance opportunity for foreign‑based businesses selling into Washington. This program is specifically designed for international remote sellers and marketplace facilitators that have not yet registered or reported Washington Business and Occupation tax or Washington sales and use tax.

Both domestic and foreign taxpayers are eligible for the traditional VDA program offered by the state of Washington. However, the limited international remote seller VDA program offers some unique opportunities and benefits that are not available via the traditional VDA program. Below, we will discuss the program overview, eligibility requirements, comparisons to the traditional VDA program.

PROGRAM OVERVIEW

The International Remote Seller Voluntary Disclosure Program runs from February 1, 2026, through May 31, 2026. It allows qualifying international sellers to voluntarily disclose prior Washington tax liabilities and register for future compliance under favorable terms. The program is intended to bring foreign and international sellers into compliance without the extended lookback periods and penalties that typically apply in an audit or enforcement context.

ELIGIBILITY REQUIREMENTS

To qualify, a business must:

1. Be headquartered outside the United States and have no physical presence in Washington.
2. Not be currently or previously registered with the Washington Department of Revenue within the current statutory period (four years plus the current year).
3. Not have had any prior enforcement contact, such as an audit or compliance inquiry, within the statutory period.
4. Not be a business with a history of tax evasion or intentional misrepresentation, which will trigger ineligibility.

KEY BENEFITS

One of the most significant benefits of the international VDA program is the reduced lookback period. The Washington excise tax return is composed of two main components. The first is the Business and Occupation Tax (B&O). The B&O Tax is a gross receipts tax. It is measured on the value of products, gross proceeds of sale, or gross income of the business.

Washington, unlike many other states, does not have an income tax. Washington’s B&O tax is calculated on the gross income from activities. The new and limited international remote seller VDA program limits the tax liability for B&O purposes to four years plus the current year.

Uncollected retail sales tax is limited to the prior 12 months, which is the primary difference between the standard VDA program, where the Department can generally assess seven years plus the current year.

Eligible participants will also receive substantial penalty relief. The Department may waive up to 39 percent of penalties, including assessment penalties, unregistered penalties, and late payment penalties. While interest remains due at statutory rates, the reduction in penalties can materially lower overall exposure.

The program also provides a streamlined resolution process. All liabilities are combined into a single assessment, and businesses may apply anonymously, with identity disclosure required within 15 days.

COMPARISON TO WASHINGTON’S STANDARD VOLUNTARY DISCLOSURE PROGRAM

Washington’s traditional VDA program is available year‑round to unregistered businesses that have not had prior enforcement contact. While it also limits lookback periods and offers penalty relief, it is not tailored specifically to international sellers, and the lookback period is lengthier than the limited international remote seller VDA program.

The international program is limited to foreign‑headquartered businesses and includes a unique 12‑month lookback for uncollected retail sales tax. Domestic affiliates of international sellers do not qualify under this program and must instead consider the standard VDA if eligible.

This means for retail sales tax purposes, under the traditional program and assuming a constant sales figure year over year, an applicant participating in the traditional VDA program can face an out-of-pocket expense of almost four times the amount as compared to the new international VDA program.

WHY THIS PROGRAM MATTERS

Washington has been increasingly aggressive in identifying non‑compliant remote sellers, including those located outside the United States. In fact, our firm has observced that the Washington Department of Revenue is typically the most aggressive state to issue audits, nexus questionnaires, and so forth to non-registered taxpayers. This temporary program offers international sellers a rare opportunity to resolve and limit prior period exposure with certainty and reduced risk. Businesses with significant Washington sales should evaluate their nexus position and prepare well in advance of the application window.

CONCLUSION

The Washington International Remote Seller Voluntary Disclosure Program represents a limited but valuable compliance opportunity. International sellers that qualify can significantly limit historical exposure, reduce penalties, and establish a clean compliance posture with the Washington Department of Revenue.

With decades of specialized expertise, Sales Tax Helper LLC helps businesses overcome their Washington sales tax challenges effectively and affordably.