61 taxable income is needed to be subject to the tax. Understanding the nuances of gross receipts taxes can help companies reduce the tax burden. 10. Abandoned/Unclaimed Property Not quite a “tax”, but the requirement to give customer property back to the states for “safe keeping” While not technically a “tax,” most state rules for escheating (i.e., returning) abandoned and/or unclaimed property to the state operates in a similar manner. The main difference is the tax rate on unclaimed property is 100%. The purpose of these rules is to give abandoned property to the state after a prescribed dormancy period so that the rightful owner of such property can reclaim it at a later day directly from the state. Common items of unclaimed property include uncashed checks, unused gift cards, abandoned account payables, among other items. Most states look to the address of the potential claimant of the property for purposes of determining where such money should be escheated, but if the address of the claimant is not known or is in a foreign country, the property must be escheated to the state of incorporation of the entity that holds the unclaimed property. Complying with these requirements for a holder can be complex and. if not done properly, can result in significant amounts of interest and penalties imposed on the holder. Moreover, if an unclaimed property return is never filed, the statute of limitations does not begin to run and the historical liability can become material as the full value of the property must be returned to the state. There are also voluntary disclosure programs to address unclaimed property matters with the state.
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