The “door is open” for Delaware's new unclaimed property voluntary disclosure agreement program which is being implemented by the Secretary of State and differs significantly from the old VDA program, which was administered by the State Escheator, the unclaimed property practice atAlston & Bird LLP's explains in this week’s issue of the Weekly State Tax Report .
Most notably, the new program offers shortened look-back periods to holders that agree to participate by a certain date.
Unlike the look-back period for the Old VDA Program, which requires holders to report property dating back to 1991, S.B. 258, enacted July 11, 2012, provides that holders who enter the New VDA Program with the Secretary of State by June 30, 2013 and complete the VDA by June 30, 2014, will be eligible for a shortened look-back period to 1996, the group states.
Holders who enter the New VDA Program after June 30, 2013 but before June 30, 2014, but still complete their VDA by June 30, 2015, will be eligible for a shortened look-back period to 1993. Holders may not apply for the New VDA Program after June 30, 2014, according to the group.
The new program might be an offer some holders will find difficult to refuse.
Delaware’s Secretary of State has engaged in a targeted outreach campaign, sending two sets of letters to what is understood to be more than 500 companies which their databases indicate a likelihood of noncompliance with Delaware's unclaimed property laws, the group explains. In November 2012, Secretary of State Jeffrey Bullock first informed the recipients of these letters that the New VDA Program exists, and that the “door is open” to all companies that wish to register and participate, the group states.
Importantly, the Secretary sent a follow-up letter in mid-January 2013 to the same group of companies (with the exception of those that had already applied to participate in the New VDA Program) that reinforces the potential risk of not responding to the Secretary's invitation, noting that although the Division of Revenue stopped issuing unclaimed property audit notices in July 2012 (when the New VDA Program law was passed), the Division of Revenue is authorized to re-commence issuance of such audit notices after Feb. 1, 2013, according to the group.
Indeed,Alston & Bird has been advised informally that a new batch of audit notices will likely be sent out by the State Escheator/Division of Revenue in early February, providing an additional incentive for Delaware-incorporated companies that are not currently in full compliance to consider whether the New VDA Program presents an opportunity to come into compliance with the law on a more favorable basis than options that previously were available (and certainly on a more favorable basis than will be the case if the company is selected for audit).
Check out the complete story in this week’s issue of the Weekly State Tax Report by the attorneys at Alston & Bird in which they review the new program and caution holders on the terms and conditions as well as identify some of the possible benefits.
In other developments…
Morrison & Foerster releases its Winter 2013 edition of State and Local Tax Insights , which contains, among other things, a look at sales tax nexus developments in California and beyond.
Wal-Mart favored over hospitals in nonprofit pinch: taxes , Romy Varghese of Bloomberg.com reports.
GOP governors seek to reshape taxes , USA Today reports.
The Texas Supreme Court will hear oral arguments in a major sales and use tax case , by the Texas State and Local Tax Law Blog.
Why replacing state income taxes with bigger sales taxes doesn’t make sense , by the Center on Budget and Policy Priorities.
The depth and length of cuts in state-local government employment is unprecedented , according to a new report by the Nelson A. Rockefeller Institute of Government.
2013 is a good year to repair (if not replenish) state rainy day funds , according to a new report by the Center on Budget and Policy Priorities.
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