News and Insights

Texas Update On Naupa Voluntary Compliance Effort

Tax Development Nov 12, 1999

An unprecedented national cooperative effort is underway to assist holders of unclaimed property comply with state law. Thirty-nine states and the District of Columbia have participated in a Voluntary Compliance Program that was originally slated to end on October 31, 1999. Several states have agreed to extended the deadline until October 31, 2000. States participating in this one year extension period may waive penalties and interest on holders who turn over their unclaimed property.

Many businesses hold a wide variety of valuable property that has not been claimed by their rightful owners for one or more years. Examples are dormant accounts, uncashed checks, unused gift certificates, customer credits, and security deposits. Corporate headquarter accountants might not be aware of unclaimed property held by far-flung operating units and subsidiaries. Each state has its own statute of limitations for remitting the unclaimed property.

States participating in the amnesty program are offering holders of unclaimed property a "carrot and stick" approach. If they voluntarily comply, the penalties and interest may be waived. If they do not voluntarily comply, states may begin aggressive audits of unclaimed property. The auditors could look back as far back as 10 years to identify unclaimed property and assess penalties and interest that may exceed 100 percent of the property's value.

Most states and the District of Columbia participated in the original voluntary compliance period. The eleven states that did not formally join the program were California, Colorado, Florida, Georgia, Idaho, Massachusetts, Mississippi, Montana, Nevada, New Jersey, and Oklahoma.

The following states have agreed to extend the October 31, 1999 deadline in their voluntary compliance effort. Unless otherwise stated, these states have agreed to extend their amnesty program through October 31, 2000. These states include:

New Hampshire
New Jersey
North Carolina
North Dakota (until 12.31.99)
South Carolina
Utah (until 12.31.00)
Virginia (until 12.31.99)
West Virginia (until 4.1.00)

Ryan & Company, a nationally recognized leader in state and local tax services, is ready to assist businesses with unclaimed property issues. Eric L. Stein, a principal in Ryan & Company's Austin, Texas office, is familiar with unclaimed property requirements across the country. Mr. Stein was appointed as the national liaison between the American Institute of Certified Public Accountants and the National Association of Unclaimed Property Administrators.

For more information, contact Eric L. Stein at 512.476.0022 or e-mail to