Many of you know Illinois is now operating under new legislation. If you haven’t had a chance to review the legislation, you’ll want to do so before filing this year’s unclaimed property report.
One change to take note of is the repeal of the general business-to-business exemption. Not only is the exemption no longer allowed, holders are expected to report all records that they’ve kept back for the last 5-years. You can find that piece of the legislation here.
If you have taken the exemption anytime within the last 5 years, make sure to review your records and prepare to submit those funds with this year’s report. There is the possibility that the state would never find out if you didn’t report the retroactive property, but it would definitely come out in an audit. It’s up to you to decide if you want to take that gamble.
You may even wish to review your internal policies about taking exemptions for other states. While it’s not likely that other states will repeal their exemptions retroactively, we realize now that it is a possibility.
For many years, I have urged holders to be cautious about taking exemptions and the Illinois repeal is a good example of why. If you are interested in taking any state exemptions, make sure to do your homework. If in doubt, perhaps the best thing to do is turn the funds over to the state.
Of course, the best course of action may be to increase your due diligence efforts. If you can reunite the property with the rightful owner, then there is no need to decide whether to exempt or report the property.
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Get in touch with a Sovos unclaimed property expert to learn more about managing your unclaimed property compliance processes.
