It is common as an accountant to see a business void an un-cashed check after a while or to write off an over-payment from a customer who hasn’t returned in a couple years. It seems that few people know that it is required by Arizona law to report and remit unclaimed property to the Arizona Department of Revenue. The goal of this law is to reunite unclaimed property with its rightful owner. Compliance with these state requirements is simple and can save you headaches down the road. Here are a few simple things you should know.
Unclaimed property reports must be filed annually before November 1st of each year and they include any property that has been deemed as unclaimed for the twelve months preceding July 1st of the same year.
Unclaimed property includes any financial asset owed to a business or individual that has not been claimed. Attempts should be made to contact the property owner prior to filing. If no contact is made for a period of one to three years, then the property may be considered unclaimed. Different types of property are considered abandoned after a certain number of years. For more details on abandonment periods visit Arizona’s unclaimed property website at www.azunclaimed.com.
If a holder of unclaimed property has a last known address for the owner, no legal claim against the owner, and the value of the property is over $50, then Arizona law requires that a holder of unclaimed property must send a letter to the property owner 120 days prior to presumption that the property has been abandoned.
If efforts to locate the owner fail, the property should be included on an unclaimed property filing and remitted to the state. Once you are ready to file your unclaimed property returns, www.azunclaimed.gov will walk you through each step of filing. Some helpful notes while filing are:
1. Each different type of property remitted requires a different cover page. Make sure you use the appropriate form for each type of property.
2. Ensure that you select the appropriate relationship code to identify the type of owner for the property.
3. Include all known data regarding the owner. The more data the state has, the more chance that the property will reach its rightful owner.
4. Make checks payable to Arizona Department of Revenue, Unclaimed Property Unit.
5. Keep records of unclaimed property for five years after filing.
Please visit www.azunclaimed.gov for more details on filing and for all the necessary forms needed to complete your Arizona filing. Most other states have similar systems for reporting and remitting unclaimed property; however, the rules vary from state to state so seek out the state’s department of revenue for more details.
Rex Platt, CPA