California Issues Quarterly Newsletter; Veiled Threats

The California State Controller's office has issued its most recent quarterly newsletter for holders of unclaimed property.  The newsletter contains a listing of common reporting errors made by holders of unclaimed property, as well as a helpful listing of upcoming dates and deadlines.

The primary substance of the newsletter, however, is a reminder from California about the appropriate "rules of jurisdiction."  While the entry purports to provide a "remind[er]" about the jurisdictional reporting rules, it is also clear that California issuing a thinly-veiled warning to holders that all California property (no matter how de minimis) should be reported to California as opposed to other states. 

Among the warnings:
  • Even if a another state is willing to receive "incidental" California items, California will still assess an "interest penalty";
  • Late reports will be subject to a "late filing interest assessment";
  • Other states cannot indemnify a holder for California property delivered to another state.
The latter warning is odd.  Technically, whether or not the receiving state can indemnify a holder for anything is, quite obviously, up to the receiving state.  Nonetheless, the point is that California will not abandon its pursuit of a holder simply in light of evidence that Califonria property was reported elsewhere.

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