Delaware unclaimed property: The iron fist in the velvet glove
Previously published in Indiana Manufacturers Association TaxTalk
INSIGHT ARTICLE |
It has become something of an axiom that Delaware ranks above all others as “The State” in which to incorporate or organize a business. A small, seemingly inconspicuous state, Delaware rolls out the red carpet for new businesses, enticing them to relocate from around the world with an unmatched giant bag of swag containing goodies only dreamed of in other states. The compelling incentives include the low cost of incorporation, low continuing operation fees, lack of sales tax, lack of corporate income tax for Delaware incorporated businesses, absence of stock tax, and a resident agent on every corner. But, there is a serpent in this land of milk and honey, an iron fist in this velvet glove: Delaware’s scorched earth approach to unclaimed property.
In his article, Delaware unclaimed property: The iron fist in the velvet glove, reproduced with permission from the Indiana Manufacturers Association, Tom Chrzanowski explores Delaware’s unclaimed property history, including its voluntary disclosure agreement (VDA) program. Considering Delaware’s position as the go-to state for incorporation and that escheatment rules require unclaimed property to be reported to the state of incorporation if the owner’s last known address is unavailable, it is no surprise that Delaware has a strong interest in bringing companies into compliance with respect to unclaimed property.