Creating a Decision Tree: Exemptions and Deductions

Transcription

1 Creating a Decision Tree: Exemptions and Deductions Marilyn Henry UnitedHealth Group Loredana Pfannenbecker PwC 1

2 UPPO Presentation Disclaimer Use of the Unclaimed Property Professionals Organization, Inc., (UPPO) name or copyrighted materials in this presentation does not constitute an endorsement by UPPO of a member, vendor, product or service. The content represents the opinions of the author and not necessarily those of UPPO. This information is not intended as legal advice and should not be used to replace the advice of legal counsel. 2

3 UPPO Antitrust UPPO has a policy of strict compliance with federal antitrust laws. UPPO members and/or meeting attendees cannot come to understandings, make agreements, or otherwise concur on positions or activities that in any way tend to raise, lower or stabilize prices or fees. Members and/or attendees can discuss pricing models, methods, systems, and applications, as well as certain cost matters that do not lead to an agreement or consensus on prices or fees to be charged. However, there can be no discussion as to what constitutes a reasonable, fair or appropriate price or fee to charge for any service or product. Information may be presented with regard to historical pricing activities so long as such information is general in nature and does not include data on current prices or fees being charged in any trade area. Any discussion of current or future prices, fees, discounting, and other terms and conditions of sale, which may lead to an agreement or consensus on prices or fees to be charged, is strictly prohibited. 3

4 CPE Credit CPE credit is available at this conference. However, NASBA rules require proof you attended the sessions. For UPPO to provide verification of attendance, you MUST be scanned in AND out of each session to be eligible to receive credit(s). Please see the room monitor(s) at the back of room to have your name badge scanned. 4

5 Exemptions Business-to-business Exemptions Payroll Exemptions Gift Card Exemptions Agenda Deductions Administrative Exemptions De Minimis Exemptions Flowcharts - How can a company determine which exemptions and deductions to take? Business-to-business Exemptions Gift Card Exemptions Deductions 5

6 Exemptions Business-to-Business: Exempts certain transactions between two commercial or business entities. (Ex: Illinois, Indiana) Some states require an ongoing business relationship in order for the exemption to apply. (Ex: Arizona, Texas) Some states exempt only specific property types, such as credit balances. (Ex. Iowa, North Carolina) Payroll: Exempts wages under a certain threshold amount. Ex: Kentucky and Michigan exempts all wages $50 or less. 6

7 Gift Card/ Merchandise Credit Exemptions Gift Card Exemptions Some states completely exempt gift cards and merchandise credits from unclaimed property. (Ex: Florida, Maryland, Ohio) Delaware allows holders to apply a gross margin reduction to amounts owed. Other states allow a deduction of 40% of the amount owed. (Example: Missouri, Nevada, West Virginia) 7

8 Deductions Administrative Deductions Colorado Holders can deduct 2% of the value or $25, whichever is less New York The cost for certified mailing may be deducted from the property as a service charge De minimis Property Deductions: Allows the holder to exclude from reporting any amounts below a set threshold amount. Florida Florida excludes credit balances, customer overpayments, security deposits and refunds having a value of less than $10. Idaho Holders incorporated in Idaho with property valued at $50 or less is exempt if the owner s last known address is in Idaho. 8

9 Business to Business Exemptions Texas Illinois Does the holder have a current relationship with the vendor? Does your state of incorporation have a B2B exemption? Yes. Does your holder take the exemption? No. Does your holder perform due diligence and escheat these amounts? Yes. No. No issue Does your state of incorporation have a right to this property even though it is addressable to another state? Possibly. The State of Incorporation can include this amount when calculating the error rate. 9

10 Gift Card Exemptions Maryland Does your state of incorporation have a Gift Card exemption? Yes. No. No issue. Similar to the B2B exemption. If the State of incorporation does not have the exemption these amounts may be included when calculating the error rate. 10

11 Deductions Administrative Deductions De Minimis Colorado Florida Yes. Does your holder take the deduction? No. Does your holder escheat these amounts to the State? Yes. Does your holder take the deduction? No. Does your holder escheat these amounts? 11