Voluntary Disclosure Agreement (Publication 178)

Generally, use tax applies when a person or business in California purchases tangible personal property (merchandise) from a retailer outside of this state that will be used, consumed, given away, or stored in this state and the retailer does not collect California use tax on their sales. For further information, please see publication 110, California Use Tax Basics.

If you owe California use tax as a purchaser of tangible personal property for use in this state, or if you are an out-of-state business that should be collecting use tax on sales of tangible personal property from California consumers, you are encouraged to apply for participation in the appropriate voluntary disclosure program.

What is Voluntary Disclosure?

The California Department of Tax and Fee Administration (CDTFA) administers two distinct voluntary disclosure programs for reporting use tax. The In-State Voluntary Disclosure Program (Revenue and Taxation Code section 6487.06) is available to an in-state purchaser with the purpose of reporting use tax on purchases of tangible personal property from a retailer outside of this state. The Out-of-State Voluntary Disclosure Program (Revenue and Taxation Code section 6487.05) is available to an out-of-state business with the purpose of reporting use tax on sales to consumers in California. Both programs provide the following benefits for participants:

  • Limits the time the CDTFA can assess use tax to the prior three years. Otherwise, the applicable statutory period is eight years.
  • Allows the CDTFA to waive late filing and late payment penalties.
  • Allows applicants to anonymously describe their circumstances and obtain a written opinion on whether the CDTFA will approve their voluntary disclosure request.

Potential Disqualification for the Franchise Tax Board (FTB) Voluntary Disclosure Program

The CDTFA online registration has an optional field for applicants to disclose their Secretary of State (SOS) number during the completion of the online registration process. If you intend to apply for the voluntary disclosure program with the FTB, please note that establishing your SOS number prior to applying for the FTB program will disqualify you from participating in the voluntary disclosure program with the FTB. For more information regarding the FTB Voluntary Disclosure Program, please visit www.ftb.ca.gov.

See below for more information regarding the CDTFA In-State and Out-of-State Voluntary Disclosure Programs.

For more information

Additional information, including copies of referenced publications and law sections and the location of our CDTFA offices, are available on our website or from our Customer Service Center at 1‑800‑400‑7115  (TTY:711).

Please note: This publication summarizes the law and applicable regulations in effect when the publication was written, as noted above. However, changes in the law or in regulations may have occurred since that time. If there is a conflict between the text in this publication and the law, decisions will be based on the current law and not on this publication.

Revision September 2020