New Jersey Unclaimed Property Changes Explained

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New Jersey Unclaimed Property Changes Explained

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Articles | State and Local Taxes | New Jersey Unclaimed Property Changes Explained

New Jersey Unclaimed Property Changes Explained

New Jersey's Administrator for Unclaimed Property has issued guidance to holders of unredeemed travelers checks, money orders, stored value cards and similar instruments. New Jersey recently expanded the reach of its unclaimed property law to this class of property. See New Jersey Unclaimed Property Laws Expanded.

In a letter dated August 18, 2010, the Administrator of Unclaimed Property advised holder of amendments to the State's Unclaimed Property Statute (NJSA 46:308-1 et. seq.). These amendments reduced the abandonment periods for travelers' checks and money orders. In addition, the new law provides for the administration of stored value cards ("SVCs") as unclaimed property.

Stored Value Cards

SVC issuers must obtain the name and address of purchasers and to maintain, at a minimum, a record of the zip code of the purchaser. In instances where an issuer does not have the name and address of a purchaser, the address of the purchaser is assumed to be the address of the place where the SVC is purchased, if that place is located in New Jersey.

An announcement from the Treasurer addressing the requirements for collecting purchaser name and address information will be available on the State's Unclaimed Property Website on or before September 1,2010. In addition to the legal requirements, the Unclaimed Property Administrator requires all companies to maintain data related to a SVC's number and last customer contact date.

The Administrator has advised that inactive SVCs with outstanding balances, issued from July 1, 2003 to June 30, 2008, should be reported to the State before November 1, 2010 (i.e., no later than October 31, 2010).

The new law bars businesses from reporting SVCs in the aggregate. Each SVC with a balance must be reported separately with the required purchaser data, including those cards with a balance of $49.99 or less. Issuers of SVCs are not required to perform due diligence on outstanding SVC balances.

SVCs presented for redemption and honored by an issuer subsequent to the remittance to the State of the SVC's value can be honored by the issuer. The issuer should contact the State's Unclaimed Property Claims section to file a claim for reimbursement. SVC issuers should cancel or destroy cards that have had their balances remitted to the State and were subsequently honored by the issuer.

Failure to timely report unclaimed property risks of an unclaimed property audit with a reach-back period greater than five years.

Kulzer & DiPadova helps its clients and their accounting and financial professionals determine and comply with their obligations under the New Jersey unclaimed property laws.