Voluntary Disclosure Program
The Voluntary Disclosure Program encourages unregistered businesses to comply with City license and tax laws by voluntarily registering and paying prior period tax and license obligations.
If your business has established nexus in Tacoma and is required to register and report taxes according to the Tacoma Municipal Code, review the application process below. Nexus is the connection between a taxing jurisdiction and business activity and must be established before City license and tax is required. Generally to meet nexus, a physical presence is necessary. A business is physically present in Tacoma if the business has real or tangible property or employees in the City. A business is also considered to be physically present in Tacoma if the business, either directly or through an agent or other representative, engages in activities to establish or maintain a market for its products or services in Tacoma.
Businesses can come forward through the Voluntary Disclosure Program by submitting a written request or filing an application. Under the Voluntary Disclosure Program, the “look back” period is generally limited to four years plus the current year. Penalties will be waived; however, interest will be imposed at the statutory rate on any tax due.
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If our records indicate your business has not previously been registered or contacted by the City notifying you of City licensing requirements, your business will qualify for the Voluntary Disclosure Program. If you don’t know if your business has been registered or previously contacted by the City, call (253) 591-5252.
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The Voluntary Disclosure Program can offer you the following benefits:
- The “look back” period is limited to a period of four years plus the current year
- Penalties can be waived, which include:
- 29% tax penalty
- 50% license penalty
- Penalties can be waived, which include:
- The City can summarize your unreported tax liability in a single tax assessment
If your business is discovered through the City’s efforts (e.g., enforcement, investigation, audit), you may be liable for license, tax, interest, penalties, and a “look back” period of ten years plus the current year.
- The “look back” period is limited to a period of four years plus the current year
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To begin the voluntary disclosure process, submit the following items:
- Application requesting voluntary disclosure
- Schedule (by year) of gross income generated in Tacoma and deductions
- Business Activity Questionnaire
- Confidential Taxpayer Information Authorization (if applicable)
If the application is approved, the City will prepare a draft tax assessment for your review. Once the assessment is finalized, a Notice of Assessment will be mailed requesting payment. Payment must be received according to the payment instructions on the Assessment. Additional interest and late payment penalties will accrue if the Assessment is not paid in full by the due date.
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If your application is not approved, you will receive an explanation from the City, along with further instructions.Â
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If you would like the City to work with a third-party representative on your behalf, you must provide a completed Confidential Taxpayer Information Authorization at the time of disclosure for the City to correspond with them regarding your confidential taxpayer information.
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If a business that is currently registered discovers that it has underreported tax obligations, amended returns should be filed and submitted with the additional tax due, including interest. To amend returns, please go to Amend a Tax Return for instructions.