Some states faced with sinking tax collections and rising debt are going after unused gift cards that bolster their revenue.
South Carolina is considering legislation that would give the state the right to collect unclaimed gift-card credit. A similar measure in Texas to allow the collection of unused credit even from cards that have no expiration date ****** that state's House this spring and stalled in the Senate. Texas already collects unused gift cards with expiration dates.
Since the recession began, states have been aggressively tapping so-called abandoned property -- anything from gift cards to dormant bank accounts and safety-deposit boxes. About half the states collect unused gift cards after a period of two to five years.
States are "looking under every rock," said Mary Bernard, a tax expert at Kahn, Litwin, Renza & Co., an accounting and business-consulting firm based in New England.
Each year Americans spend about $65 billion in gift cards -- excluding bank-issued prepaid cards -- but don't redeem $6.8 billion, according to research by TowerGroup, a financial-consulting firm.
