Unclaimed Property News - Delaware Offers a Carrot

by Ken Urish 11. July 2012 15:15
By virtue of its being the legal home for a large majority** of corporate America, Delaware is the big dog in the world of abandoned or unclaimed property. Policies and procedures regarding the reporting of unclaimed property are under scrutiny by state treasuries across the country because it is increasingly seen as a key resource to plug budget holes. Very understandable, since recoveries by states are literally found money. Because Delaware leads the country in unclaimed property receipts by a wide margin, it is significant that Governor Jack Markel is about to sign into law a new and alternative Voluntary Disclosure Agreement Program (“VDA”). The program is designed to be an incentive for holders to bring their reporting into compliance with Delaware’s laws, in return for a reduced look-back period. The earlier participants enroll the shorter the look-back period will be. Enrollees by 6-30-13 will be limited to a 1996 look-back period; those that wait until 6-30-14 may be eligible for a 1993 period. Delaware’s current VDA requires reporting back to 1991. Will this program increase compliance? State treasurers nationwide will be watching with great interest, as will those of us that practice in the area of unclaimed property recovery. For more details on Delaware’s new VDA, please see this state and local tax alert.     ** More than 900,000 business entities have their legal home in Delaware including more than 50% of all U.S. publicly-traded companies and 63% of the Fortune 500 (source: State of Delaware).
Categories: Tax