If your company has been selling into Florida, hiring employees in the state, or storing inventory without being registered for the required taxes, you could face significant back taxes, interest, and penalties.

The Florida Voluntary Disclosure Program (VDP), also known as a Voluntary Disclosure Agreement (VDA), is designed for businesses to come forward before the Florida Department of Revenue (FDOR) makes contact. The program can limit your look-back period, remove penalties, and help you achieve compliance without the uncertainty of an audit.

Why the Florida Voluntary Disclosure Program Matters for Businesses

Florida does not impose personal income tax, but it actively enforces sales and use tax, corporate income tax, and reemployment tax. The FDOR uses advanced data analysis, cross-state information sharing, and marketplace reporting to identify unregistered businesses.

Once the FDOR sends a notice, makes a phone call, or issues a nexus questionnaire, your eligibility for the program ends. Applying proactively is essential for businesses that want to control their exposure.

Taxes Covered Under Florida’s Business VDP

Florida’s program can resolve liabilities for:

  • Sales and use tax (including discretionary sales surtax).
  • Corporate income tax and franchise tax.
  • Reemployment tax (employer payroll tax).
  • Certain other state-administered taxes and fees.

It is often more efficient to include all outstanding liabilities in one disclosure to prevent future audits on undisclosed obligations.

Florida Voluntary Disclosure Program Overview

Feature Details
Administered By Florida Department of Revenue
Eligible Taxes Sales and use, corporate income, reemployment
Typical Look-Back 3 years for most taxes, 5 years for some corporate income cases
Penalty Relief 100% waiver of penalties
Interest Relief Not generally available
Anonymity Yes, if filed through a representative
Deadline After Agreement 60 to 90 days to file and pay

Eligibility Requirements for Florida Businesses

To qualify, your business must:

  1. Not be currently registered for the tax type you are disclosing, or be registered but have unfiled past periods.
  2. Not have been contacted by the FDOR about the liability.
  3. Be prepared to file and pay within the agreed timeframe after the application is approved.

If your business has already been contacted, the VDP will not be available. In that case, you will need to work through the standard audit or settlement process.

Common Nexus Triggers for Businesses in Florida

Economic Nexus for Sales and Use Tax

Remote sellers must register if they exceed:

  • $100,000 in gross revenue from sales into Florida during the previous calendar year.

Marketplace facilitators must collect and remit sales tax on behalf of their sellers. However, sellers are still responsible for remitting tax on direct sales made outside of marketplace platforms.

Physical Presence Nexus

  • Office, warehouse, or other business facility in Florida.
  • Employees or independent contractors performing services in the state.
  • Inventory stored in a Florida third-party fulfillment center or warehouse.

Corporate Income Tax Nexus

  • Doing business or earning income in Florida.
  • Owning or leasing property in the state.
  • Sales representatives or agents operating in Florida.

Benefits of Florida’s Business VDP

  • Penalty abatement: Waiver of all late filing, failure-to-register, and negligence penalties.
  • Reduced look-back period: Often three years for sales tax instead of the full statutory reach.
  • Pre-determined terms: The agreement is negotiated in advance, providing certainty.
  • Anonymity: The business can apply through a representative, revealing its identity only after eligibility is confirmed.

Example: A remote seller with unregistered sales in Florida since 2018 may only need to file back to 2021, significantly reducing liability compared to a standard audit.

Step-by-Step Florida VDP Process for Businesses

Step Actions Timeline Responsibility
1. Assessment Confirm nexus and estimate liability Days 1 to 5 Internal team or SALT counsel
2. Anonymous Application Submit information through a representative Days 6 to 10 SALT counsel
3. FDOR Review Confirm eligibility and issue agreement terms Days 11 to 20 FDOR
4. Registration Obtain tax account numbers Days 21 to 25 Operations
5. Filing & Payment File all required returns and remit tax and interest Days 26 to 60 Accounting / Commenda
6. Closing Receive formal closing agreement from FDOR Days 61 to 90 SALT counsel

Businesses must meet all deadlines to maintain penalty relief.

Florida Compared to Other State VDPs

State Sales Tax Look-Back Penalty Relief Interest Relief Anonymity
Florida 3 years 100% No Yes
Georgia 3 years 100% No Yes
Texas 4 years 100% No Yes
California 3 years 100% No Yes

Florida’s look-back period and penalty relief terms are in line with other pro-business VDP programs, although it does not offer interest forgiveness.

Key Considerations Before Applying

  • Gather comprehensive data: Sales, payroll, and property records for the look-back period must be accurate and complete.
  • Bundle all liabilities: Addressing all tax types at once reduces the risk of future audits.
  • Use a representative: A SALT attorney or CPA can maintain anonymity during the initial stages.
  • Automate data preparation: Commenda Global Sales Tax can integrate with platforms such as Shopify, Amazon, NetSuite, and Stripe to compile data quickly and accurately.

Maintaining Compliance After Completing the VDP

Completing the program is the first step toward long-term compliance. Businesses should:

  • Monitor nexus thresholds each year.
  • Keep registrations current for all applicable taxes.
  • File returns and pay taxes on time to avoid reinstating penalties.
  • Maintain detailed tax and transaction records for at least seven years.

When Businesses Should Use the Florida VDP

The program is a strong option if your business:

  • Has unregistered taxable sales or other activities in Florida.
  • Recently exceeded the $100,000 economic nexus threshold.
  • Identified tax exposure during a merger, acquisition, or funding round.
  • Wants to address liabilities before the FDOR makes contact.

How Commenda Helps Businesses with Florida Voluntary Disclosure Agreements

Commenda helps businesses manage Florida VDP filings by:

  • Conducting multi-state nexus analysis, including Florida.
  • Preparing and submitting anonymous applications through legal partners.
  • Aggregating and reconciling sales data from multiple channels.
  • Generating Florida-compliant returns for quick submission.
  • Tracking filing and payment deadlines to protect penalty relief.

With Commenda, your business can go from application to signed closing agreement in weeks.

Book a Demo to see how Commenda can streamline your Florida VDP process.

FAQs on Florida’s Voluntary Disclosure Program for Businesses

1. Can interest be waived under Florida’s VDP?

No. Florida waives penalties but requires payment of interest.

2. What is the typical look-back period for sales tax?

Usually three years for eligible businesses.

3. Can a company disclose multiple tax types in one application?

Yes. This is recommended to save time and reduce the risk of additional audits.

4. What if the FDOR has already contacted the business?

The company will not be eligible for the VDP and will need to work through the audit process.

5. Are remote sellers eligible?

Yes. Remote sellers are among the most common participants in the program.

6. How long does the Florida VDP process take for businesses?

It typically takes 60 to 90 days from anonymous application to closing agreement.