Your Property Records, Like Fine Wine, Need to Age Properly

sovos etm
April 2, 2012
Many companies like to report unclaimed property as soon as it shows up as abandoned on their books. I understand the desire to get the records reported to the state and out of your hair, but you may wish to slow down and let those records age.
Why is this important? One reason is that you are not allowing enough time to find your customers and reunite them with their property. If you can contact that customer, it’s likely your business relationship will continue and you’ll benefit from their patronage for some time to come. Another reason is that many states don’t want you to send records early without their express, written permission.
How do you know when the property has aged long enough to be reported to the state? I’ll give you a quick lesson on calculating dormancy. All states have a list in their handbook or somewhere on their website listing each type of property code they will accept and the dormancy value that is assigned to each code. Each state has a cutoff date, also known as the Period End Date that is used to calculate the dormancy.
For our example, we’ll look at MS05, Customer Overpayments, for the state of Tennessee. The dormancy value assigned to this code is 5 years. The cutoff date for this spring’s Tennessee report is 12/31/2011. You simply take 12/31/2011 and subtract 5 years. This means you will send the state all MS05 property with a last transaction date of 12/31/2006 or earlier. It’s very simple when you look at it this way.
If you’d rather not have to calculate the dormancy manually, you’re in luck. Unclaimed property software can come to the rescue. For example, the business version of UPExchange already contains tables with dormancy values for each property code in every state. When you run a report, the system looks at the cutoff date for the state you are processing and automatically calculates the dormancy based on the last activity date values you have entered, so you only report the records that qualify. If you have permission to report records early, it’s still no problem. You can use a status value of Force on Report and the system will ignore the dormancy calculation.
Whether you rely on a manual process, build your own reporting system, or use a software such as UPExchange, it’s always in your best interest to let your records age appropriately. Of course, it also helps to perform your due diligence and try to contact the rightful owners in the meantime.
Author: Danielle Herring
Product Manager, UPExchange

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Author

sovos etm

Share this post

North America Tax Information Reporting
March 22, 2024
Market Conduct Annual Statement Reminders and More

On the second Wednesday of each month, Sovos experts host a 30-minute webinar, Water Cooler Wednesday, to share the latest updates on statutory filings. In March, Sarah Stubbs shared information about the many filings due after March 1, from Market Conduct Annual Statements to health supplements for P&C and life insurers writing A&H businesses and […]

North America ShipCompliant
March 21, 2024
How Producers Can Build a DtC Shipping Market

Direct-to-consumer (DtC) shipping has become one of the leading sales models for businesses of all sizes and in all markets. The idea of connecting directly with consumers is notably attractive, as it helps brands develop a personal relationship and avoid costly distribution chains. Yet, for all its popularity, DtC is often a hard concept to […]

North America ShipCompliant
March 20, 2024
Key Findings from the 2024 DtC Beer Shipping Report

This March, Sovos ShipCompliant released the fourth annual Direct-to-Consumer Beer Shipping Report in partnership with the Brewers Association. The DtC beer shipping report features exclusive insights on the regulatory state of the direct-to-consumer (DtC) channel, Brewers Association’s perspective and key data from a consumer preferences survey. Let’s take a deeper dive into some of the […]

March 20, 2024
As the World Gets Smaller, Think Bigger About Global Tax Compliance

For the past few weeks back, my colleagues and I have been talking a lot about the importance of a global strategy when it comes to addressing today’s modern tax environments. On the heels of Sovos introducing the Sovos Compliance Cloud, many in our company’s leadership team have blogged about related topics and the critical […]

North America ShipCompliant
March 12, 2024
Florida HR 583 Set to Uncork Larger Format Wine Bottles

This bill was signed into law on March 28, 2024 and takes effect July 1, 2024. Florida wine lovers could soon enjoy a bigger selection of bottles based on a recent bill passed by the state’s legislature (HR 583) that would remove the existing cap on wine bottle sizes. What is Florida’s HR 583 bill? […]