Delaware Now Eying Unclaimed Money For the State
Taking a cue from California, Delaware is now planning to tap the unclaimed money funds which has been increasing steadily and has been unused to a great extent. Since 2007, Delaware has received more than $1.7 billion in abandoned property but returned only $46 million.
“As a state, we’re very fortunate to have this revenue source; it keeps taxes down for our citizens,” said Delaware finance Secretary Tom Cook. “But it’s a fine line to walk. We certainly don’t want to be seen or portrayed as being negative to business.”
Delaware is home to more than 1000 of multi-national corporations which translate into a lot of abandoned accounts. Cook also noted that only about 3,000 companies file annual abandoned property reports as required, a fraction of the companies incorporated in Delaware. Last year, for the first time, the amount collected from enforcement actions exceeded the amount taken in from regular collections.
It is a fact that abandoned property has become a major source of revenue for the state of Delaware. Unclaimed money is the third-largest source of revenue, behind only personal income taxes and corporate franchise taxes, totaling half a billion dollars last year. By law states are required to return the unclaimed money or unclaimed property to the actual owners, but a large percentage of these unclaimed monies are still lying in the state treasury.
“It’s hard to believe that companies would not have some kind of a liability,” he said, noting that some Fortune 500 companies are among those not filing the annual reports. “… You would expect there would be higher compliance.”
Delaware plans to utilize these unclaimed money funds for state sponsored development programs and social welfare programs. A lot of organizations and influential personalities have come out in support of this approach. As the funds are lying idle for years and it would be a great service to the state and its underprivileged population if these funds can be utilized to generate employment and raise the standard of living. In spite of this, Delaware is moving very cautiously as far as utilizing the unclaimed funds is concerned.
