The North Carolina Department of Revenue said today it is working with online retailers who operate affiliate programs in the state to resolve issues of tax liability.

The state said it will waive all back sales taxes and penalties for online retailers that sign an agreement by August 31 to start collecting sales tax.

An initiative called the Internet Transactions Resolution Program is the result of discussions between the department and a number of ecommerce retailers.

"We are going to be asking quite a number of them to participate in the program," said revenue Secretary Kenneth Lay. "We have positive indications that several will sign up."

Any retailer that did not register for sales and use tax as a result of an affiliate program in North Carolina at any time is eligible to participate in the program. Retailers may resolve their prior tax liability by registering for sales and use tax and agree to collect and pay those taxes for four years, beginning September 1.

The program begins today and retailers have until June 30 to register for the program. Retailers who do not register will be subject to taxes, penalties and interest.