The Delaware Department of State recently sent a new round of letters to companies they identified as likely not being in compliance with Delaware’s unclaimed property laws. The purpose of these letters is to invite the companies into the state’s unclaimed property voluntary disclosure program (“Program”). If the company decides to not enter the Program, there is risk of audit. Below is a high-level overview of the Program, as well as certain considerations that must be weighed in response to the invitation letter.
The World Health Organization has officially declared the coronavirus outbreak to be a pandemic. In addition to the cost on human life, the rapid spread of COVID-19 has left a trail of economic damage affecting business revenues. COVID-19 has caused complete or partial shutdown of factories, supply chain disruptions, and labor shortages, and has impacted demand in certain industries. This impact will also be felt by U.S. state, and local governments.
Baker McKenzie attended the U.S. Supreme Court’s oral arguments yesterday in South Dakota v. Wayfair, Docket No. 17-494. At issue in the case is whether the Court should abrogate the physical presence nexus standard that it first articulated in National Bellas Hess v. Dep’t of Revenue, 386 U.S. 753 (1967), and later affirmed in Quill Corp. v. North Dakota, 504 U.S. 298 (1992). The Court’s decision could have a profound impact on sales and use tax nexus in the United States by altering the limitations currently imposed on a state’s ability to require out-of-state retailers to collect such tax.
Since the beginning of 2017, Delaware’s abandoned and unclaimed property law has undergone continuous statutory and regulatory changes, e.g., the enactment of SB 13 (Delaware’s new unclaimed property statute) and SB 79 (an amendment to SB 13), as well as the promulgation of final regulations from the Secretary of State (the “SOS”) regarding estimation practices in its voluntary disclosure agreement (“VDA”) program. To read our prior coverage relating to these unclaimed property developments in Delaware, see Delaware Issues New Abandoned and Unclaimed Property Regulations, Technical Correction to Delaware’s Unclaimed Property Overhaul Legislation Includes Extension of Time to Convert an Audit to a Voluntary Disclosure Agreement, and UPDATE: The Delaware Secretary of State Releases the Final Version of its Estimation Regulations With No Substantive Changes.