Weekly Round-Up: States Find Unclaimed Property Closes Revenue Gaps

While most states have avoided raising taxes over the past year, many jurisdictions are eyeing alternative sources of revenue, such as unclaimed property. One advantage to this approach is that it generally avoids media scrutiny. Until it doesn’t -- as discovered by Delaware and New Jersey.

Delaware is increasingly relying on unclaimed funds to fill its coffers, delawareonline reported recently. The Delaware Department of Finance expects to collect $631 million in abandoned property next year—up 29 percent, according to the report. In comparison, the article noted that Maryland collected just $78 million in unclaimed property last year.

Delaware has also come under fire for spending about $30 million annually to enforce unclaimed property laws, with a portion of those funds going to third-party auditors “who pore over corporate books for unclaimed cash that can be escheated – turned over to the state,” the story says.

New Jersey’s unclaimed property laws have also been in the news lately. In April, Gov. Chris Christie stood by his state’s requirement that unused amounts on gift cards be remitted to the state. The law is reported to have prompted American Express to pull its gift cards from New Jersey. "If they want to move out, move out," responded Gov. Christie, according to the New Jersey Star Ledger.

Legislation (A.B. 1871) to undo the gift card law is pending in New Jersey’s legislature, but it is unlikely that the governor will support it, reports Michael Rato an attorney who writes the Escheatable blog.

In Other Developments

The Sacramento Beegives a nod to Bloomberg BNA reporter Laura Mahoney for her articles calling into question the impartiality of the California State Board of Equalization.

The U.S. Supreme Courtfinds an Indiana municipality’s disparate treatment of taxpayers survives the rational basis test.

By Steven Roll
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