On May 24th, Michigan Governor Rick Snyder signed into law HB 4563 which will exempt common business transactions between two or more businesses from Michigan unclaimed property laws. Any credit balances, overpayments, deposits, refunds, discounts, rebates, credit memos or unidentified remittances held or owing in any transactions between businesses created on or after April 1, 2009 will no longer be subject to escheatment to the state. Because of the state’s dormancy periods, this law will exempt such items that would have been reportable on Michigan’s 2013 reporting deadline (7/1/2013) and thereafter.
The new Michigan law specifically does not exempt outstanding checks, drafts or similar instruments. Therefore there will not be any ambiguity about whether the exemption applies to uncashed vendor checks issued by one business to another, as was prevalent in other states which previously passed similar B2B exemptions. Michigan joins a growing number of states exempting business-to-business transactions from the reach of unclaimed property requirements, in recognition that businesses settle potential credits in the course of their day to day operations.
For more information, go to: Michigan B2B Exemption