Webinar Recap - June 2017

June 2017

What Every Business Should Know About Delaware Unclaimed Property SB13 & Corresponding Regulations

Should your company be participating in the Delaware SOS VDA program?

Launched in 2012, the VDA Program was created to address concerns about Delaware’s ongoing unclaimed property audit program and to encourage more companies to comply with their legal responsibilities as they relate to abandoned property.
 
The program is designed to make abandoned and unclaimed property compliance for Delaware companies cheaper, faster and easier. To date, more than 800 companies have enrolled, and more than 400 VDAs have been settled. The process is rigorous, but fair, and it provides Delaware corporations with a more predictable and efficient means of coming into compliance.
 
To learn more, BDO USA, LLP's SALT practice invites you to listen to, What Every Business Should Know About DE Unclaimed Property SB13 & Corresponding Regulations, an informative webinar featuring the Honorable Jeffrey Bullock from Delaware Department of State and Geoffrey Sawyer from Drinker Biddle & Reath LLP.

If your company is uncertain if it is compliant with its obligations under the law, then this webinar can assist you in identifying the appropriate steps for reconciliation. Failure to address your company’s unclaimed property compliance can potentially lead to liabilities, including interest and penalties in multiple jurisdictions.
 
In this presentation, you will learn:
  • What the SOS VDA program is and why it was enacted
  • What types of companies fall under the program purview
  • A step-by-step approach for converting an audit to a VDA
  • How Delaware’s latest rule proposals should impact your firm’s approach


This is the second webinar in a two-part series designed to help you learn more about the latest changes to Delaware's unclaimed property laws, how they will impact your business and what you can do to stay ahead of them. You can also listen to part one, Updates on Delaware Unclaimed Property Regulations, recorded on Feb. 21, 2017.


About the Delaware SOS VDA Program

 
At its core, the DE VDA program is a settlement program, enabling the holder of unclaimed property to manage the VDA process and present its findings to the State for validation. After entering and completing the program, holders that fulfill their future annual reporting requirements are protected against an unclaimed property audit for historic liabilities for the property types and entities reviewed as part of the SOS VDA.
 
The program was designed to assist companies with reaching a final agreement on past due liabilities as quickly as possible. It was also designed to provide a lower cost solution that enables a company to come into 50-state compliance in a more business friendly and collaborative manner. The program assesses no interest and penalties, and gives a holder certainty regarding past due liability.
 

Common questions about DE unclaimed property laws

 
My company is a Delaware corporation, but has no operations in the state. What unclaimed property laws apply?

  • In general, the laws of states where your company has operations and Delaware law will apply. This is because under the sourcing rules laid out in Texas v. New Jersey, holders source unclaimed property first to the state of last known name and address on their books and records. If no address is known, the unclaimed property is reported and remitted to the holder's state of domicile (e.g., state of incorporation or formation). 
  • Given these rules and current state practice, for those years where actual address property is determined (e.g., base period) one would report any unclaimed property due and owing to that state. For years outside the base period (e.g., projection period) there is an estimation back to the end of the look-back period (currently 15 transaction years in Delaware).  
Does Delaware require negative reporting?
  • No. The statute of limitations provision was changed such that the statute begins to run when the duty to report is triggered, so holders no longer have to file a negative report to commence the running of the statute of limitations.
How does the new statute of limitations provision differ from the old?
  • The old statute of limitations provision would not begin running until a holder filed a report, even a negative report. As such, the state could conduct an audit of company within the new SOL period. This is mitigated somewhat if a company has a robust filing history or has filed VDAs in the states where it has escheat obligations.
 


For more information, visit: https://legis.delaware.gov/BillDetail/25389