Voluntary Disclosure
Voluntary compliance is the cornerstone of our tax system. The South Carolina Department of Revenue relies on the assistance of all taxpayers in collecting and remitting the various taxes owed. Accordingly, there is a voluntary disclosure procedure for taxpayers who have sufficient South Carolina business activity or connection ("nexus") to have a filing requirement but have not registered to collect or remit South Carolina taxes.
The voluntary disclosure program is designed to (1) encourage non-filers to come forward voluntarily and begin paying taxes without incurring penalties and (2) allow the Department to maximize compliance with limited resources.
All companies and individuals who have been conducting business in South Carolina and have not filed required tax returns in the past are encouraged to contact the department for a determination of nexus and initiation of voluntary disclosure procedures.
Multistate Tax Commission (MTC)
South Carolina is a member of the Multistate Tax Commission's National Nexus Program. If you wish to enter into agreements with more than one state, or want to learn more, please
visit the MTC website for more information on how to apply.
Voluntary disclosure requests sent through the MTC Program can be emailed to
SCMTC@dor.sc.gov.
For more information, please see
RP20-2 (Voluntary Disclosure of Nexus).
What are the qualifications for voluntary filing status?
To qualify as a voluntary filer, you must not:
- Be registered, filing, or have been previously contacted by SCDOR with respect to the tax for which you are requesting a voluntary disclosure agreement.
- Have outstanding tax liabilities other than those reported through the voluntary disclosure.
- Be involved in an audit or litigation with the Department.
- Have requested an advisory opinion regarding matters relating to the existence of nexus.
- Request a voluntary disclosure for non-business individual income taxes.
- Fail to respond timely and completely to a nexus questionnaire (if requested by the Department).
How do I request a voluntary disclosure agreement?
Mail or email a written request containing the following information:
- A description of the company's activities in South Carolina;
- The date the company started its activities in South Carolina;
- The type of tax involved and tax periods;
- The reasons for noncompliance with South Carolina tax law;
- A statement that the company has not been contacted by the South Carolina Department of Revenue for audit prior to the request;
- An estimate of the company's tax liability for the past three years;
- The company's proposed terms of settlement;
- The type of presence the company has in South Carolina - physical or economic (met the $100,000 threshold and is a
remote seller).
Email your VDA requests to
SCVDA@dor.sc.gov.
Mailing address: SCDOR,
Nexus/Discovery Section, PO Box 125, Columbia, SC 29214-0970
Does South Carolina enter into agreements with taxpayers who choose to be anonymous?
If a taxpayer is submitting a request through the Multistate Tax Commission, than South Carolina will not enter into an agreement with the taxpayer if they choose to remain anonymous. Upon disclosure of the taxpayer's name and Federal ID, the Department will accept the taxpayer's application.
However, if the taxpayer does not come to us through the Multistate Tax Commission, than we can enter into an agreement if they choose to remain anonymous, so long as they meet all other qualifications.
Can a company headquartered in South Carolina qualify for the voluntary disclosure program?
No, only companies headquartered outside of South Carolina are allowed to participate in the voluntary disclosure program.
Once my voluntary agreement is accepted, should I be proactive and register an account with the Department for the tax that I am voluntarily filing?
No. The taxpayer should
not register and/or file any accounts with the Department for the tax that they are voluntarily filing with our program. All documents are to be submitted directly to the Nexus Auditor assigned to your case.
The Nexus Auditor will register all accounts, process all documents, and send a bill upon completion.
Once my voluntary agreement is accepted, how long do I have to submit my documentation?
You will have 60 days from the date of acceptance to submit all documents requested.
For Sales and Use Tax, do I need to provide returns?
In lieu of returns for Sales and Use Tax, the SCDOR requires a
spreadsheet, which outlines the taxable sales for each month by jurisdiction.
If I have any exempted sales on my spreadsheet, do I need to provide a certificate for them?
Yes. Any sales that are exempt should have a
valid re-sale and/or exemption certificate provided. Please note that the certificate must be completed it its entirety to be considered valid.
Is there a minimum tax liability to qualify as a voluntary filer?
There must be a minimum tax liability for the lookback period of $500.
What taxes are eligible?
- Income Tax
- “C” Corporation Sales
- “S” Corporation
- Partnership
-
Sales & Use Tax
-
Sales Tax
-
Use Tax
-
Accommodations
-
Bank
-
Tax Exempt Organizations (Eleemosynary)
-
Sole Proprietorship
Can I pay taxes owed online?
Once your voluntary disclosure agreement is confirmed and you have received a bill from the Nexus Auditor, you can pay online using our free tax portal,
MyDORWAY.
For assistance with setting up an online account, making payments, and filing returns, go to
MyDORWAY Help.
Whom do I contact if I have any questions?
