ARTICLE | February 6, 2026

Why Washington Created This Program

Washington’s approach to economic nexus has broadened the state’s reach over remote sellers, including those headquartered outside the United States. A business does not need a physical presence in the state to trigger tax obligations. Regular sales into Washington, exceeding $100,000 in Washington-sourced gross receipts, or other sustained business activity may be enough to establish substantial nexus.

Many international sellers remain unaware of these thresholds or assume that the absence of U.S. income tax filing requirements means no state exposure. In practice, that assumption often proves costly. When noncompliance is identified through audit or enforcement, Washington can assess multiple years of back taxes, interest, and penalties. The IRSVP exists to encourage voluntary compliance before enforcement occurs.

Who the Program Is Designed For

The IRSVP is narrowly tailored. It applies only to businesses headquartered outside the United States that have not previously registered or filed Washington taxes during the statutory period and have not been contacted by the Department of Revenue regarding compliance. Participation also requires good-faith disclosure; businesses that engaged in tax evasion or misrepresentation are excluded.

The program is available only during the defined window. After May 31, 2026, international sellers will be subject to Washington’s standard voluntary disclosure or enforcement processes, which typically involve longer lookback periods and higher penalties.

Why the Benefits Matter

The most significant advantage of the IRSVP is its reduced lookback period. For Business & Occupation tax, Washington limits the review to four prior years plus the current year. For uncollected retail sales tax, the lookback is reduced to just 12 months. Outside this program, exposure can extend substantially further, particularly when a business is discovered through audit.

Penalty relief further reduces risk. Eligible sellers may receive partial or full waivers of penalties that would otherwise apply for failure to register, underreporting, or late filing. While statutory interest still accrues, the overall financial impact is often materially lower than post-audit assessments.

The option to apply anonymously adds another layer of protection. Businesses can confirm eligibility without immediately disclosing their identity, giving decision-makers time to evaluate exposure and next steps.

How the Disclosure Process Works

The program follows a structured sequence designed to move sellers from uncertainty to resolution:

1. The seller submits an online application, either anonymously or with full disclosure, including business details, Washington-sourced revenue information, and supporting documentation.
2. The Department of Revenue reviews the submission and confirms eligibility. Incomplete applications may delay approval.
3. Once approved, the Department issues a voluntary disclosure agreement. The seller must sign and return the agreement within 30 days to remain in the program.
4. The Department calculates tax liability, shares a draft assessment for review, and issues a final invoice. Payment is required by the stated due date.

The Risk of Waiting

If Washington identifies a noncompliant international seller before voluntary disclosure, the consequences escalate quickly. Lookback periods can extend up to seven years, penalty exposure increases significantly, and the opportunity for anonymous resolution disappears. In many cases, the financial difference between voluntary disclosure and audit discovery is substantial.

This risk is compounded by improved data sharing, marketplace reporting, and audit targeting, which make it increasingly difficult for remote sellers to remain unnoticed.

Strategic Takeaways

Washington’s International Remote Seller Voluntary Disclosure Program reflects a broader shift in how states approach global commerce: economic presence now matters as much as physical presence. For international businesses with U.S. customers, waiting for certainty can be far more costly than acting on informed risk.

This program offers a brief window to address Washington exposure under materially better terms than traditional voluntary disclosure or audit resolution. Our team works closely with international sellers to assess Washington nexus, quantify potential liability, and determine whether participation aligns with broader U.S. tax and compliance strategies.

For businesses with Washington sales and unanswered compliance questions, now is the time to evaluate options—before that opportunity closes. Contact your LG Advisor today for more information or to setup a consultation use the form below.