Sales tax glossary
What is a look-back period?
A look-back period is the span of past time a state reviews when assessing unpaid tax. In a voluntary disclosure agreement, states commonly limit it to a few recent years. In an audit, the statute of limitations governs it, and that period can be unlimited if returns were never filed.
Example
A business that never registered in a state applies for a voluntary disclosure agreement. The state agrees to assess only the most recent few years, not every year since the business had nexus.
Why it matters for sellers
The look-back period sets the size of your potential liability. Coming forward voluntarily usually shortens it, while waiting for the state to find you can lengthen it.
Related terms
This definition is general information, not tax or legal advice. Rules vary by jurisdiction and change over time.
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