Ohio's Permanent Escheat Law: What the Nation's First Stadium-Funded Unclaimed Property Takeover Means for Your Books

You have a $847 payroll check from 2019 still sitting in your outstanding checks list. A vendor credit for $312 you never cleared. A customer overpayment you wrote off to income last year because "they'll never claim it." In 49 states, you could sit on that paperwork forever and still file a report when the dormancy clock runs out — the state would just hold the money for the owner indefinitely. In Ohio, that safety net now has an expiration date, and the clock is already running.

Just before midnight on July 1, 2025, Ohio approved its $60 billion two-year budget (Am. H.B. 96). Buried inside is a provision that does something no state has done at this scale: it permanently takes legal ownership of unclaimed property after ten years and moves it out of the Unclaimed Funds Trust Fund to pay for major sports and cultural facilities — starting with $600 million for a new domed stadium in suburban Cleveland. If you operate in Ohio, owe money to Ohio residents, or ever had an Ohio address on file, your bookkeeping for old checks and credits just became a legal deadline.

What Actually Changed: Custody Became Ownership​

Unclaimed property law in the United States has been custodial for more than seventy years. You — the business — hold the money, and after a dormancy period with no owner contact, you turn it over to the state. The state holds it as a perpetual custodian. The owner or heir can claim it at any time, even 30 years later. That promise is written into every version of the Uniform Unclaimed Property Act since 1954 and is why holders are relieved of liability after reporting.

Ohio's amendment to Ohio Revised Code 169.03(I) breaks that model. The language is blunt: after the new deadline passes, "all property rights, legal title to, and ownership of unclaimed funds and interest vest solely in the state."

The New Timeline: Claim It or Lose It​

The law creates two buckets:

• Property reported to Ohio on or before January 1, 2016: Deemed abandoned and escheated to the state on January 1, 2026, if no valid claim is filed on or before that date. State publications and later guidance have described this as a December 31, 2025/January 1, 2026 cutoff — effectively, you had through the end of 2025 to claim the oldest tranche. A March 2026 preliminary injunction in Franklin County Common Pleas has currently paused that transfer while a constitutional challenge is heard, with the federal court in Columbus also leaving the underlying Takings Clause claim alive after denying an early injunction in December 2025. In practice, owners of the oldest funds are in a litigation-induced pause, not a safe harbor.

• Property reported after January 1, 2016: A rolling ten-year clock. Funds are deemed abandoned and vest in the state on the tenth anniversary of the date they were reported. Money reported on January 1, 2017, would vest on January 1, 2027 if still unclaimed, and so on. The Ohio Department of Commerce has signaled it will apply this retroactively.

In other words, Ohio has created a ten-year bar date on owner claims where none existed before.

Where the Money Goes​

On or as soon as possible after the vesting date, the Director of Commerce must remit the escheated funds to the newly created Ohio Cultural and Sports Facility Performance Grant Fund (Ohio Code 123.282 and 229.40, Fund 5CY1). The enacted budget appropriates $1 billion to that fund for 2026, with $600 million earmarked as the state's contribution to the $3 billion Brook Park domed stadium and mixed-use project south of Cleveland. Additional grants from the same pool are contemplated for other Ohio professional teams and cultural facilities.

Ohio was holding roughly $4.8 billion in unclaimed funds as of mid-2025. State filings in the litigation described $1.7 billion to $1.9 billion as scheduled for the first transfer, including the $600 million stadium grant. The plan envisions the grant being repaid over time from tax revenues generated at the new facility, but the transfer itself is permanent under the statute.

Why Ohio Is Now an Outlier​

This is not how escheatment normally works.

In nearly every other state, the state's use of unclaimed money — whether Florida depositing it in the State School Fund or Louisiana backing transportation bonds — does not cut off the owner's right to be paid. You can still claim it in perpetuity. The federal justification for these laws has always been that the state is a better, more permanent custodian than a business that might dissolve.

Only a handful of narrow exceptions exist, and Ohio dwarfs them:

• Indiana: permanent escheat after 25 years.
• Hawaii and Rhode Island: a 10-year bar, but only for property valued at less than $100 and $50, respectively.

The National Association of Unclaimed Property Administrators (NAUPA) and the National Association of State Treasurers both opposed the Ohio provision. NAUPA's white paper on time-bars notes that the Uniform Law Commission only rejected the argument that holders are better custodians than states because it assumed states would honor claims in perpetuity. NAUPA wrote that its view "would quite likely have been different, if states established a bar date for owner claims."

Even Ohio's own Attorney General wrote to the governor urging a veto, warning that the timeline "makes Ohio an outlier nationally and risks inadvertently harming taxpayers unaware they have money in the state's unclaimed funds." A former officeholder announced plans to sue before the bill was even signed, on Takings Clause grounds — that the state is taking private property for public use without compensation.

Whether that challenge succeeds or fails, the bookkeeping consequence for you is already real: Ohio has signaled it wants to be an owner, not a custodian, after ten years.

What Counts as Unclaimed Property (You Have More Than You Think)​

If you run a small business, unclaimed property is not a weird corner of the law. It is the normal debris of running a ledger.

The Four Buckets Every Small Business Creates Without Realizing​

1. Uncashed payroll checks and contractor payments. Final paychecks, bonus checks that were reissued, or a contractor who moved and never deposited.

2. Uncashed accounts payable checks and voided checks. Vendor checks that were lost, duplicated, or written to a business that closed. Even voided checks can count if the underlying obligation was not reissued.

3. Customer and vendor credits, overpayments, and unrefunded deposits. That credit memo you issued when you double-billed, the $200 security deposit you never returned, the overpayment a customer sent and you decided to "apply to next time" but never did. Auditors look here first because credits are the most misreported category.

4. Other intangibles. Unredeemed gift certificates, uncashed rebate checks, undelivered refunds, royalty payments, insurance proceeds, dormant customer accounts, and uncashed dividend checks if you have investors.

You cannot write these off to income because the payee didn't cash the check. Until the dormancy period expires and you properly report and remit, the liability stays on your books as an obligation to the owner — or to the state as custodian (and in Ohio, soon as owner).

Your Duties as a Holder in Ohio​

You are a "holder" if you operate in Ohio or hold funds due to an Ohio resident — even if you are incorporated elsewhere. Physical presence is not required; the last known address of the owner controls where you report.

Dormancy Starts Ticking Without You Noticing​

Ohio's dormancy periods are defined in Ohio Revised Code 169.02. The general period is five years for many property types, but common business items are shorter:

• Wages, payroll, and salaries: 1 year from the date payable.
• Accounts payable, vendor checks, and most business-to-business obligations: 3 years.
• General intangible property not otherwise specified: 5 years.
• Gift certificates and store credits: Generally 3 years after expiration or issuance, subject to federal card rules.

Dormancy is measured from the date the funds became payable or the last owner contact — not from when you discovered the old check. A payroll check dated January 15, 2023, with no owner contact, would be reportable in Ohio as early as your 2024 report after one year.

Ohio requires an annual Report of Unclaimed Funds even if most of your property is below the aggregate threshold. The state's reporting deadline is November 1 for most holders (May 1 for life insurance companies), covering the period through June 30. You file through the Ohio Department of Commerce Division of Unclaimed Funds portal.

Due Diligence Before You Report​

Before you remit, Ohio requires a good-faith effort to find the owner for property above a threshold (currently $50). For many business holders, that means mailing the state-approved OUF-8 Notice of Unclaimed Funds to the owner's last known address between certain dates before your report. The notice must describe the property, the amount, and what the owner must do to prevent reporting.

Keep copies of every notice, returned mail, and owner response. If the owner responds, you pay the owner directly and remove the item from your report. If the owner does not respond, you remit to the state and keep detailed records proving you tried.

This is not a courtesy step. Due diligence is both your last chance to clear the liability correctly and your audit defense.

Reporting and Recordkeeping​

• Do not net credits. Report the gross obligation. You cannot offset a $500 uncashed check with a $200 credit you think the same owner owes you.
• Report property, not estimates. Auditors routinely reject estimated liabilities where underlying records are missing. If you reconstruct, document your methodology.
• Keep holder records for at least 5 to 10 years. Ohio can audit holders well beyond the current report year, and the new 10-year vesting rule means state interest in old property will only grow. Hold due diligence files, bank statements, check registers, and prior reports.
• File a negative report if required. If Ohio asks for confirmation that you have no reportable property in a given year, respond. Silence is not compliance.
• Reconcile before you remit. Your unclaimed property liability in your ledger should agree to your report total. If it doesn't, you have either missed property or overstated income.

The New Deadline Puts Pressure on Both Sides​

If You Are Owed Money​

The practical takeaway in the Reed Smith client alert is direct: any entity that ever had an Ohio address should search the Ohio Division of Unclaimed Funds website to see if the state is holding its property.

The state's searchable database is at com.ohio.gov/divisions-and-programs/unclaimed-funds. Search your legal name, prior trade names, and personal name if you are a sole proprietor. The Division reported more than 133,000 Ohioans starting claims in June 2025 alone after the stadium news broke, and claims paid in fiscal 2025 topped $109 million — a sign that publicity is driving a surge.

File quickly if you find something — especially for older property — but understand the caution flagged by counsel: filing a claim can invite the Division to review your own compliance as a holder. For businesses, it is worth searching as an owner and auditing yourself as a holder in the same week.

If You Hold Money​

The ten-year vesting clock does not change your reporting deadline, but it changes the state's incentive to enforce it. A state that permanently keeps money after ten years has a stronger reason to find non-reporters than a state that must pay owners forever. Expect more:

• Voluntary disclosure programs promoted alongside enforcement.
• Third-party audit firms working on contingency, asking for records going back well beyond your last filing.
• Questions about late-reported property now that "reported on or before January 1, 2016" has become a legally meaningful cutoff.

Cleaning up before you are contacted is almost always cheaper. Penalties and interest on late-reported Ohio property can be 10% or more, and indemnification in an M&A deal will not save you from the underlying failure to report.

Compliance Mistakes That Trigger Audits​

Mistake 1: Writing off old checks to income. "Stale-dated" does not mean "yours." Nationally, low compliance is often willful non-compliance combined with the mistaken belief that old liabilities can be taken into income. They cannot.

Mistake 2: Keeping vendor credits in an aging "catch-all" account. A credit balance sitting in Accounts Receivable for two years with no customer contact is not a revenue opportunity; it is likely reportable. Aged credits are the single most common audit finding, and auditors will extrapolate from a sample.

Mistake 3: Treating voided checks as resolved. If you voided a check but never reissued payment or documented owner contact after the dormancy period, the underlying obligation may still be unclaimed. A void without payment is not escheatment compliance.

Mistake 4: No due diligence or generic letters. Sending an internal email or posting a notice in a lobby does not satisfy Ohio's mailed OUF-8 requirement. Keep the mail receipts.

Mistake 5: Inconsistent records across systems. Your payroll system shows an uncashed check cleared, your general ledger still shows a liability, and your unclaimed report shows neither. Auditors love that mismatch; it proves weak controls and justifies a broader look-back.

Mistake 6: Filing only one property type. Some businesses correctly report payroll but forget vendor credits entirely. The report must capture all property you hold, not just the easy category.

A Simple Year-End Clean-Up Checklist for Ohio Holders​

You don't need a law firm to catch 90% of the risk. You need a quarterly habit that ties to your bank reconciliation.

1. Run an outstanding-check report as of June 30 and December 31. Flag checks outstanding longer than 90 days. Anything outstanding beyond the dormancy period with no owner contact is a candidate.
2. Age your credit balances. Pull an Accounts Payable and Accounts Receivable credit balance report aged over 180 days. Research each one: was it refunded, applied, or truly owed?
3. Search Ohio's unclaimed funds site for yourself and your vendors. If you find your own business listed, file the owner claim and pull the underlying records — whoever reported you did the job you need to copy.
4. Reconcile the unclaimed liability account. Create a General Ledger liability account called "Unclaimed Property Due to Ohio" if you don't have one. Every item you plan to report sits there, not in revenue or in a suspense account.
5. Mail due diligence early. For your November 1 report, send OUF-8 notices by the state's window (typically late summer) so undeliverable mail returns before you file.
6. Report and remit on time, even for small amounts. Ohio's aggregate reporting allows you to report many sub-threshold items in bulk, but you must still report them. "Too small to matter" is how interest accrues.
7. Document your methodology and keep it for a decade. If Ohio's new 10-year vesting clock survives court review, your records from today may be the difference between a clean audit in 2035 and a multi-year reconstruction engagement.

If you use plain-text accounting, this maps cleanly: outstanding checks are liabilities with a dated payee, credit balances are liabilities with an owner address, and your June 30 snapshot becomes a version-controlled report you can diff year over year. See the docs for holding liability accounts and dated transactions.

What to Watch Next​

The litigation is moving on two tracks and neither has reached a final merits decision:

• A Franklin County Common Pleas class action led to a March 2026 preliminary injunction that blocks the state from moving the funds while the court considers whether permanent escheat violates Ohio constitutional provisions. The magistrate found challengers substantially likely to succeed on the merits.
• A federal Takings Clause suit survived a motion to dismiss in December 2025, with the court denying a preliminary injunction but allowing the constitutional claim to proceed. The Sixth Circuit rejected an early appeal of that denial in March 2026.

Unless the General Assembly amends the law, the practical effect is a court-ordered pause — not a repeal. The prudent approach is to act as if the ten-year bar will take effect, claim what you are owed now, and bring your own holder compliance current before the next reporting cycle. If the law is struck down, you will have lost nothing but gained clean books. If it is upheld, you will have beaten a deadline that permanently extinguishes a property right.

Simplify Your Financial Management​

The lesson from Ohio's shift is broader than one state: small liabilities you ignore — an uncashed payroll check, a vendor credit you never cleared — don't disappear. They age, they acquire legal consequences, and they eventually require paperwork that is far more expensive than a monthly reconciliation.

Keeping a disciplined, owner-by-owner ledger of what you owe and why makes both owner claims and holder reports straightforward. Beancount.io gives you plain-text accounting that is transparent, version-controlled, and AI-ready — so your outstanding checks, credit balances, and due diligence mailings are all traceable in one place. Get started for free and see why businesses that want control over their financial data are switching to plain-text accounting.