While the amnesty program provides many benefits, the Department’s VDA program may offer better terms for taxpayers that are eligible. Specifically, the VDA program typically offers non-filers a shorter look-back period than the look-back offered by the amnesty program. For example, a remote seller that has not previously collected Pennsylvania tax or filed Pennsylvania returns, and that wants to concede nexus, may find that the look-back period under the VDA program is several years shorter than the look-back under amnesty. The benefits of the more limited VDA look-back can, in many cases, exceed the benefit of reduced interest under amnesty.

The following chart illustrates a few other key differences (and some similarities) between the amnesty and VDA programs for corporate net income tax (similar considerations apply for other tax types):

Because the VDA program will continue to operate during amnesty, taxpayers that are eligible for both programs can weigh the benefits and risks of both programs, and choose the one that is best suited for the company. If you are a non-filer considering coming forward under Pennsylvania’s amnesty program, make sure that you compare the benefits with Pennsylvania’s VDA program. You may find that the standard VDA program terms provide greater relief.

Client Alert 2017-114