Unclaimed Property Reporting - Are You In Compliance?

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Most states require the holder of “abandoned” or “unclaimed” property to report (and remit) such property after the expiration of a certain number of years (the “holding period”). These “escheat” laws generally apply to any property which does not legally belong to the holder, although some states exempt certain types of property, such as gift certificates and business-to-business transactions. Examples of reportable property include dormant bank accounts, stocks and bonds, insurance premium refunds, uncashed payroll checks, uncashed accounts payable checks, uncashed operating fund checks, credit balances, customer deposits, uncashed death benefit checks and unused gift certificates or gift cards.

Reporting obligations for abandoned and unclaimed property (with the exception of tangible personal property) are generally governed by the laws of the state of the legal owner’s last known address rather than the laws of the state where the property or the business is located. If the owner’s address is unknown, or if the owner’s state of residence does not require reporting of the property, the unclaimed property is reported to the holder’s state of incorporation (or to the state of domicile for unincorporated holders). The length of the “holding period” varies from state to state and by type of property.

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Topics:  Abandoned Property, Audits, Due Diligence, Escheat, Gift-Cards, Reporting Requirements, Unclaimed Property

Published In: Administrative Agency Updates, General Business Updates, Finance & Banking Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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