In any given year, it is not uncommon for a holder to have no unclaimed property to report to one or more states. Does this mean you have no reporting obligation? Not necessarily. Some states still require that you file a “negative” report. This negative report indicates to the state that the holder has no property to report for the given report year, while demonstrating ongoing compliance with the state’s unclaimed property requirements.
The states are split on the matter of negative reports, so it is important to check with the state(s) in question before filing. Approximately half the states require negative reports to be submitted. In these states, failing to submit even a negative report will cause the holder to be considered out of compliance. Other states do not require negative reports but will accept them if they are filed., and a handful of states do not accept negative reports at all.
A few examples can illustrate the variation in negative reporting requirements across the states:
- Nevada requires negative reporting for three years after the submission of a positive report. After that, negative reports are not accepted.
- In California, if a notice report is negative, a negative remittance report should not be filed. However, if the notice report is positive, a negative remittance report should be filed.
- Connecticut requires a negative report only if the holder is domiciled in Connecticut.