What would you do with $1 billion? This astounding 10-digit figure is the approximate value of unclaimed property held by the State of Arizona and belongs to roughly one million current or former Arizona residents. Chances are one in seven of finding unclaimed property if you live in the Grand Canyon State! So, what exactly is unclaimed property?
It’s a financial asset owed to an individual or business where there has been no owner contact for a specified period of time, usually one to three years, measured from the date of the transaction. Common examples of these assets are outstanding payroll and vendor checks, abandoned checking and savings accounts, unreturned security deposits, etc. These assets go unclaimed for a variety of reasons including changes in people’s addresses, death of the owner/holder, business dissolutions and so on.
What do business owners need to know?
In order to maintain compliance with Arizona’s laws and regulations, organizations are required to report unclaimed property to the Arizona Department of Revenue on an annual basis (on or before November 1 of each year). Arizona requires holders (organizations) to send due diligence notifications for any property with a value of $50 or more. These letters must be sent each reporting cycle to the apparent owner at the last known address no less than 120 days prior to filing your unclaimed property report with the state. The notice should inform the owner that the holder is in possession of unclaimed property that will be turned over to the state unless the owner claims it from the holder before the report is filed. At the same time, those unclaimed amounts should be escheated (remitted) to the state, where they will continue the attempts to locate the owner of the property.
If you have never filed this form or have remitted unclaimed property in the past, the state can and does perform unclaimed property audits on companies and you can be subject to penalties and interest for not complying with Arizona law. The state does offer organizations with past-due property a way to come into compliance through a voluntary compliance program that allows you to self-report up to ten years of unclaimed property and avoid those fines.
Additional details on the types of assets that are subject to unclaimed property laws, the associated “abandonment” criteria, filing and remittance forms can be found at www.azunclaimed.gov. If you operate in another state, most states have some form of unclaimed property law that must be adhered to. Every business should be aware of the laws in each state it operates, which may mean using the work of an attorney to sort this all out.
What do you need to know?
You can go www.azunclaimed.gov and perform your own search to see if you’re the heir to a fortune!
Matt Waller, CPA