The Missouri House gave first-round approval Tuesday, April 15, of House Bill 1075, legislation sponsored by Rep. Rocky Miller (R-Tuscumbia) that would block the state’s false claims to business unclaimed property.
“All too often, the unclaimed property that is being reported to the state isn’t truly unclaimed property,” said Tracy King, vice president of governmental affairs for the Missouri Chamber of Commerce and Industry. “This is not the state’s money, and it is not the state’s job to take these transactions and dump them into the general revenue.”
Some states have implemented aggressive strategies to target unclaimed business property because if the state can’t find the rightful owner of the property, the state can keep the property. The Council on State Taxation, a national tax association, began ranking states based on their unclaimed property laws in 2008. While most of the states have made improvements over the years, Missouri has remained in the bottom-ranked states in the country with only Delaware, Mississippi and New York with lower rankings.
“House Bill 1075 would take Missouri from the bottom four states in the rankings to one of the top 10 states for fair treatment of business unclaimed property,” King said.
The three main provisions of HB l075 would:
• Create a business-to-business exemption for unclaimed property: Currently, if a business has outstanding credits or other transactions with another business, the state treasurer can audit the company and require them to pay into the state unclaimed property fund.
• Establish a three year period of limitations: There are statutes of limitations in both federal and state tax laws. If a business files a report in good faith, they would be assured that they will not be subject to audit, resulting in penalties and interest. The penalties and interest could be significant and the uncertainty would create considerable business planning risks. The statute of limitations defined in this bill is similar to the one for tax law. The state would have three years after the filing of the report to audit the businesses’ records and to assess any addition property.
• Provide a fair appeals process: Currently, a business has little recourse if it disagrees with the Missouri Treasurer’s treatment of its unclaimed property. Under this legislation, a business can appeal to a circuit court if it is unsatisfied with the Treasurer’s ruling.
“Compliance with Missouri’s unclaimed property laws is a hidden cost of doing business,” King said. “This legislation is a good step toward blocking this money grab, while making it easier for businesses to stay in compliance and stay in business.”