If your business is domiciled in the state of Delaware or is currently doing business in the state, your company may have significant Delaware unclaimed property reporting obligations. Delaware entities are subject to the state’s unclaimed property reporting laws. Unclaimed property is generally reported to the state of the last known address of the owner. However, when the last known address is not available, property should be reported to the holder’s state of domicile.
Delaware has aggressively pursued collection of unclaimed property for a number of years. Recently, Delaware has been contacting non-reporting businesses via written correspondence and inviting them to enter into a voluntary disclosure agreement (VDA). Recipients of these invitations from Delaware should review their obligations and respond to the state accordingly. Businesses that fail to respond to Delaware may end up receiving an unclaimed property audit notice.
Delaware’s VDA program allows a business to become compliant with the state’s unclaimed property reporting laws. The benefits of the VDA program include a limited lookback of 10 report years (15 years when accounting for the dormancy period), waiver of penalty and interest, and the ability to control the review process and avoid an examination. Since most businesses do not retain records or have systems that maintain documents for 15 years, Delaware allows and expects VDA participants to estimate the liability for periods where records are not available. For more information about the current voluntary disclosure program, visit www.vda.delaware.gov or contact your Schneider Downs state and local tax professional.
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The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at contactSD@schneiderdowns.com.
Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.