Arkansas, a fall reporting state, has not been one of the states that regularly charges interest on late reported property. However, they have been sending notices out to holders remitting late property that they may begin charging interest and penalties beginning with the 2012 reports.
The text of the notices includes:
"I am writing in regards to the Arkansas unclaimed property report submitted by [Company Name] on [report submitted date] in the amount of [2011 report amount]. This report included items that should have been reported to our office in prior reporting periods. At this time, we have not elected to assess interest and penalties consistent with Arkansas Code Annotated § 18-28-224 (a) and (b).
Please note that your 2012 report will be due to our office before November 1, 2012. Also note that if your report includes late-reported property in the future, we may elect to assess both interest and a civil penalty."
Arkansas § 18-28-224 (a) and (b) is the Arkansas interest and penalty provisions in their unclaimed property statutes. Those sub-sections read as follows:
(a) A holder who fails to report, pay, or deliver property within the time prescribed by this subchapter shall pay to the administrator interest at the annual rate of two (2) percentage points above the bank prime loan rate as reported from time to time in the Federal Reserve Board Statistical Release H.15 (Selected Interest Rates) or any successor publication on the property or value thereof from the date the property should have been reported, paid or delivered.
(b) Except as otherwise provided in subsection (c), a holder who fails to report, pay, or deliver property within the time prescribed by this subchapter, or fails to perform other duties imposed by this subchapter, shall pay to the administrator, in addition to interest as provided in subsection (a), a civil penalty of two hundred dollars ($200) for each day the report, payment, or delivery is withheld, or the duty is not performed, up to a maximum of five thousand dollars ($5,000).
Barganier expects more states to begin aggressively charging interest on late reported unclaimed property. Interest and penalties are additional revenue for the states, revenue which they do not have to hold in reserve for owners to claim. A robust compliance program should minimize or eliminate such penalties and interest.