To avoid costly interest and penalties, filing unclaimed property accurately and timely is now even more important for companies.
In a recent case, the New York Supreme Court essentially said companies are automatically liable for interest on any unclaimed property they have in the state – even if they’re not specifically assessed for it.
A new standard for UP?
As you know, many states have unclaimed property statutes letting them assess penalties and interest for late filings. But, historically, few states aggressively enforce these rules. States typically assess penalties and interest during regular audits or on a case-by-case basis, explain the escheatment experts at Keane.
This court decision – that interest on late unclaimed property isn’t dependent on direct contact from authorities – means the state doesn’t have to be knocking on your door to trigger liability for businesses.
In fact, it could change the whole unclaimed property landscape, Keane says, putting many companies on the hook for interest they didn’t know they owed.
And though this case is happening in a New York courtroom, you know all too well that where one state goes, others follow. Depending on how this plays out, other states could look to adopt similar approaches for compliance.
Lead by example
With a dozen different responsibilities on your finance team’s plate, unclaimed property reporting may not be top of mind until those fall or spring reporting deadlines roll around.
But you can use this real-life legal case as a prime example for your team of why consistently monitoring unclaimed property, staying on top of state-specific requirements and hitting those deadlines is so important.
Educate your team on the concrete dollar amounts of interest and penalties, the legal implications and other keys for compliance. If they see unclaimed property is something you and other leaders are prioritizing, they’ll be more inclined to prioritize it, too.
