What Business Owners Should Know About Reporting Unclaimed Property in Texas

February 13, 2019

TEXAS UNCLAIMED PROPERTY

Annually, businesses (“holders”) should review their records and, if they hold property that is presumed abandoned (“unclaimed property”), as of March 1st, are required to file a report with the Texas Comptroller of Public Accounts.  The report is due by July 1st. 

What is unclaimed property?  Unclaimed property is any financial asset or tangible property that has been abandoned by the owner.  Abandonment is based on loss of contact and is determined by: 1) the date of last contact; and 2) the property type. The second point, property type, is important as it dictates the length of the abandonment period for reporting purposes. 

Contact: There are two elements of owner contact that determine whether the property held becomes unclaimed: 1) method of contact; and 2) date of last contact (“DLC”). These two elements are intertwined, as only a valid method of contact can prove when a last contact took place.  For abandoned and unclaimed property purposes, the states use the DLC as the date the statutory dormancy period begins. The DLC is considered to be the last time an owner showed interest in the property. As of 2018, the holder may prove an owner’s knowledge of the property through several methods of contact: U.S. mail, phone, email, and face-to-face. Phone and face-to-face contact must be documented in writing with the date and time of the conversation. For U.S. mail documentation, it should be noted that mail not returned by the post office does not, by itself, qualify as contact with that owner or activity on the account.

Property Type: Discussed below in the five basic steps of reporting. 

FIVE STEPS FOR REPORTING UNCLAIMED PROPERTY

1. Determine Dormancy – Dormancy is the amount of time from the last contact between the holder and the property owner. Dormancy periods range from one to fifteen years depending on the property type. We will cover the two most common types, refunds and payroll. 

Refund checks have a dormancy of three years.  For example, a refund check not claimed as of March 1, 2018, would have a dormancy period starting on March 2, 2018, and ending on March 1, 2021, the annual report cut-off date. 

Wages and payroll checks have a dormancy period of one year.  This type of property unclaimed as of March 1, 2018, would be included on the annual report with a cut-off date of March 1, 2019. Refer to the Relevant Dates section for a table that shows the reporting date based on the dormancy period.    

2. Notifying Property Owners – By May 1st, due diligence notices are due.  These notices alert owners that their unclaimed property will be reported. 

Who gets included in the due diligence notice?  Holders should review records by March 1st of each year to determine if contact was made with owners after the abandonment period. Owners with abandoned property valued at more than $250 should receive a notice. A sample letter can be found here. The notice must include the following language:

  • You (the holder) are holding the property; and
  • You (the holder) may be required to deliver the property to the Comptroller’s office on or before July 1st if the property is not claimed.

It should be noted that: 

  • If mail has been returned by the post office as a result of a previous mailing, a second notice to the last known address is not required.
  • No notice is required if the holder does not have record of an address.

3. Preparing Your Report (due July 1st) – All property not previously reported to the Comptroller’s office, and unclaimed for the applicable period of abandonment or longer, should be included in your report. Holders are required to report all available owner information including: 

  • The last contact date;
  • Relationship code;
  • Social Security number;
  • Last known address; and 
  • Property descriptions. 

This information is important for verifying ownership during the claims process. If you do not include the last contact date, property and relationship code, your report will be rejected. Property and Relationship codes can be found on pages 37 – 44 of the “Unclaimed Property Reporting Instructions” here

For example, a patient refund check would have a property code of MS05 and in most cases the relationship code of SO for “Sole Owner.” Submitting as much information as possible with your report reduces the need for the State Comptroller’s office contacting you, the holder, for additional information.

4. Submit Report & Payment – If the property owner is not found after due diligence, the property must be included on the report filed with the Comptroller (due July 1st). The report must be submitted electronically via one of the approved online submission methods below: 

Information must comply with data entry standards. Reports on CDs, spreadsheet or other physical media are not permitted and will not be accepted. After the transmission is complete, you will receive two notifications. 

  • The first is the Holder Summary which is displayed on your screen immediately after submission. 
  • You will receive the second notification in an email containing your confirmation/report ID number shortly after submission. The confirmation number must be included with your payment. Acceptable payment methods include check, wire or ACH debit/credit through the State of Texas Financial Network, TEXNET. Enrollment in the TEXNET Program, specific for unclaimed property, is required prior to sending ACH payments. Texas enrollment information can be found here.

  Checks should be made payable to: 
      Texas Comptroller of Public Accounts
Unclaimed Property

Remittances should be mailed to:
Texas Comptroller of Public Accounts
Unclaimed Property Division
P.O. Box 12019
Austin, Texas 78711-2019

5. Archive Data – Holders are required to keep information relating to reported unclaimed property for ten years after reporting it to the Comptroller’s office.

RELEVANT DATES:

All property (except life insurance) - Report year is March 2, 2018 through March 1, 2019

  • Due diligence due by May 1, 2019 (refer to step 2)
  • Report and payment due by July 1, 2019 (refer to steps 3 and 4)

Abandonment Periods: March 2nd – March 1st of the following year

Property
Type
Abandonment
Period
Last
Contact
Date
Anniversary
Date of Last
Contact
Report
Year
Due
Date
Payroll 1 year 01/15/2018 01/15/2019 2019 07/01/2019
Payroll 1 year 03/03/2018 03/03/2019 2019 07/01/2019
Refund 3 years 01/15/2018 01/15/2021 2021 07/01/2021
Refund 3 years 03/03/2018 03/03/2021 2021 07/01/2021

 

All other reporting resources, including a Reporting Instructions Manual, can be found here.