Conclusion
statutory revisions impact multiple industries, there are several that directly impact unclaimed property reporting and compliance in the energy sector, specifically the following: 1. Conversion from a non-current to pay (“NCTP”) to current to pay (“CTP”) 2. Reduction dormancy period from 5 years to 3 years for most property types 3. Increased records retention period to 10 years after the later of the date the report was filed or the last date a timely report was due to be filed, unless a shorter period is provided by rule of the administrator 4. Inclusion of a 5-year transitional period 5. Elimination of the deduction of 2% or $25, whichever is greater, of the property’s value 6. Increase interest rates and penalties for non- compliance As the basins and shale plays are widespread in Colorado and its contiguous states, it is highly probable that holders operating in this region will have landowners and businesses in Colorado. In the event there has been a loss of contact with the landowners or any other party to whom unclaimed property is due with a last known address in Colorado, the property would be reportable to the state once the dormancy period has been met. With the reduction of the dormancy period from 5 to 3 years, and the transitional provision applying to bring forward property that would have been due had the new shorter dormancy periods been in effect for the past five years, holders will more than likely realize an increase in unclaimed property reportable to Colorado. In the event a holder is incorporated in the State of Colorado, and the aforementioned conditions are met for owners for whom the address is missing, the property should be reported to Colorado. As the statutory update became effective July 1, holders must update their unclaimed property procedures to address the change from NCTP to CTP, as well as apply the 3 year dormancy period. Failure to update this information will result in non-compliance with the state’s law in future filings. Non-compliance with the statute puts holders at risk of being assessed penalties and interest, the amount of which, as noted above, has also increased.
SOVOS KEANE sincerely hopes that you find our articles useful and valuable. If there is any specific subject matter applicable to the industry of which you wish for us to address in the future, we ask that you reach out using the contact information in the “ABOUT THE AUTHOR” section.
*************** About the Author:
Gary Joseph, MBA, CIA Senior Consulting Manager SOVOS KEANE Consulting and Advisory
Gary Joseph assists companies operating in the energy sector with Unclaimed Property compliance. Gary has over a decade of experience in the Unclaimed Property space, formerly serving as both an Audit Manager and Program Leader for a 3rd party audit firm and now assisting clients in various engagements including audit defense, voluntary disclosure agreements, establishing policies and procedures and obtaining overall compliance. He resides in Houston, Texas!
Phone: (267) 566-3962 Email: gjoseph@keaneup.com Email: gary.joseph@sovos.com
*************** SOVOS Acquires KEANE
On July 23, 2020, SOVOS acquired the reporting and consulting divisions of KEANE. Together, SOVOS KEANE continues to solve a range of challenges for holders in the energy sector as well as other industries. The combination of the two companies creates new synergies the likes of which has not been seen across industries or practices. Should anyone have any questions regarding the new business combination, feel free to reach out to the author or any other member of the SOVOS KEANE Consulting team!
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N a t i o n a l A s s o c i a t i o n o f D i v i s i o n O r d e r A n a l y s t s
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