A couple of small mistakes can turn into a huge mess of debt over time, especially when you're dealing with the confusing world of American sales tax.
Washington just cleared a path through the danger zone with a rare amnesty program meant to help bring foreign sellers into compliance without crippling penalties.
Washington usually takes a brutal stance on unpaid sales taxes. If the state catches you before you come forward, the lookback can stretch far beyond the standard 4 years. Unregistered businesses face a 7-year lookback plus the current year when they are discovered through an audit, while the 4-year period applies only to registered businesses or to a normal voluntary disclosure. And penalties that can stack up to nearly 40%.
Thankfully, the state is temporarily flipping the script for international businesses.
Washington will run a temporary International Remote Seller Voluntary Disclosure Program from February 1 through May 31, 2026. During this 4-month window, eligible businesses can come forward, report past Washington tax liabilities, and qualify for a limited 1-year lookback, along with penalty relief tied to the penalty structure in WAC 458 20 228.
That is a concrete financial win that rarely happens in U.S. tax enforcement. You get to fix your compliance history for a quarter of the usual cost.
The program is built around three main benefits that flow from Washington’s normal penalty and interest rules.
1. Limited lookback:
2. Washington may waive specific penalties that normally apply under WAC 458 20 228, including:
3. Single consolidated assessment:
Applications cannot be submitted before February 1 or after May 31, 2026.
A business must not have registered or filed taxes in Washington for the last four years, including the current year.
The business must not have evaded taxes or misled anyone regarding their obligations to Washington tax responsibilities.
Domestic companies do not qualify. However, a non-U.S. business with a separate U.S. affiliate can still qualify if the foreign entity meets the criteria.
The 12-month lookback applies only if you failed to collect sales tax. If you collected tax and didn't remit it, you face an unlimited lookback and full penalties.
Normal Washington interest rules still apply to unpaid tax, even when penalties are waived.
For some, Washington's program can wipe out years of unpaid liability. However, the deeper challenge is operating long-term in a country designed with an aggressive and confusing sales tax system.
To handle that with confidence requires specialist sales tax expertise, which most foreign teams simply don’t have.
TaxValet acts as your Fractional Sales Tax Department. We take the entire weight of compliance off your shoulders so you can build your US business without looking over your shoulder.