Comparison with rules in adjacent states: Illinois has the following provision in their unclaimed property law:
If property reported to the administrator is virtual currency, the holder shall liquidate the virtual currency and remit the proceeds to the administrator. The liquidation shall occur anytime within 30 days prior to the filing of the report under Section 15-401. The owner shall not have recourse against the holder or the administrator to recover any gain in value that occurs after the liquidation of the virtual currency under this subsection (756 ILCS 1026/15-603(i)).
Summary of factual data and analytical methodologies: 2021 Wis. Act 87 provided virtual currency that is presumed abandoned is subject to the unclaimed property laws and the holder is required to convert to U.S. currency prior to delivery to the administrator. However, it did not provide a time frame for converting. The department looked for timeframes used among other states. Delaware and Kentucky require liquidation 90 days prior to reporting deadlines and Illinois requires liquidation 30 days prior to the reporting deadline. With high levels of volatility, a shorter amount of time to convert the property minimizes the potential difference in valuation that can occur between conversion and delivery to the department. Analysis and supporting documents used to determine effect on small business: This rule order makes changes that are consistent with current published guidance. It makes no policy or other changes having an effect on small business. The department recognizes there may be an economic advantage or disadvantage to the owner of the virtual currency if the value of the virtual currency increases or decreases after liquidation.
Anticipated costs incurred by private sector: There may be costs incurred to convert virtual currency to U.S. currency; however, this cost is required to be incurred as a result of the law. There are no anticipated costs as a result of this proposed rule.
Effect on small business: It is unknown how much time is needed for small businesses to convert virtual currency to U.S. currency for purposes of reporting and delivering to the department.
Agency contact person: Please contact Ann DeGarmo at (608) 266-7179 or ann.degarmo@wisconsin.gov if you have any questions regarding this proposed rule. Place where comments are to be submitted and deadline for submission: Comments may be submitted to the contact person shown below no later than the date on which the public hearing on this proposed rule is conducted. Information as to the place, date, and time of the public hearing will be published in the Wisconsin Administrative Register.
Ann DeGarmo
Department of Revenue
Mail Stop 6-40
2135 Rimrock Road
P.O. Box 8933
Madison, WI 53708-8933
SECTION 1. Chapter Tax 10 is created to read: UNCLAIMED PROPERTY
SECTION 2. Tax 10.01 title is created to read:
Tax 10.01 virtual currency.
SECTION 3. Tax 10.01 (1) and (2) are created to read:
(1) A holder that is required to report and remit virtual currency to the department as provided under s. 177.0307, stats., shall liquidate the virtual currency within 30 days prior to the November 1 due date of the report. (2) A holder that meets the requirement in sub. (1), and substantially complies with ss. 177.0501 and 177.0502, stats., is considered to have delivered the virtual currency in good faith and is relieved of liability arising after payment and delivery of the virtual currency to the administrator. SECTION 4. Effective date; general. This rule shall take effect on the first day of the month following publication in the Wisconsin Administrative Register as provided in s. 227.22 (2) (intro.), stats.
