Some businesses are beginning to receive letters from the Unclaimed Property Division of the Texas Comptroller of Public Accounts. These letters are being sent out in batched with no clear methodology as far as which businesses will receive their letter, or when they receive it. The letter states that business may not be in compliance with the Texas Property Code. Although this is not unheard of, its not been common In the past and it seems that they are ramping up enforcement for businesses.
Businesses and Texas Property Code
As a business operating in the state of Texas, you are required by Texas Property Code, sections 74.101 and 74.301, to report and deliver to the state any unclaimed property. This includes forgotten utility deposits or other refunds, insurance proceeds, payroll checks, cashier’s checks, dividends, mineral royalties, dormant bank accounts and abandoned safe deposit box contents. For the typical small business, these are usually uncashed checks, payroll or wages, unclaimed customer or vendor credits, abandoned accounts or any other unclaimed financial assets.
Businesses who fail to pay or deliver property to the Texas Comptroller of Public Accounts on or before July 1st of each year are subject to penalty and interest assessments authorized under Texas Property Code, sections 74.705 and 74.706.
If the business does not have any unclaimed property to report, they are required to submit a negative report. All reporting of unclaimed property can be done online on the claimittexas.org website. The negative report takes approximately five minutes to complete and ensure compliance. Although this sounds quite scary, reporting requirements have been in place for a while and have recently begun to be more heavily enforced. If you receive a letter from the Unclaimed Property Division of the Texas Comptroller of Public Accounts, it should be considered a wakeup call.
Businesses generally turn property over to the unclaimed property program after it has been considered dormant for one to five years. Since the unclaimed property program began in 1962, Texas has returned more than $3 billion in unclaimed property to its rightful owners. More than two-thirds of that $3 billion has been returned in less than eight years under the team of the current Comptroller, Glenn Hegar.
If you’ve received a letter from the Unclaimed Property Division, BFG Tax help can help you determine the property being referred to and properly report it. Being compliant with laws is vital to the success of your business and nobody understands that better than us. At BFG Tax Help, we can help you take care of all of your tax and accounting needs, so that you have the time that you need to run your business. Give us a call today to find out how we can help you with your business.