On June 24, 2019, the U.S. Senate Finance Committee, through its Chairman Chuck Grassley (R-IA) and Ranking Member Ron Wyden (D-OR), sent a letter to U.S. Treasury Secretary Steven T. Mnuchin encouraging him to consider all available tools, including Section 891 of the tax code, to convince the French Government to abandon its potential digital services tax (“DST”). Under Section 891 of the tax code, a double rate of U.S. tax may be imposed on citizens and corporations of foreign countries applying discriminatory taxation on citizens or corporations of the United States.

On June 26, 2019, the French General Assembly and Senate reached agreement on the text of the DST draft law, which generally constitutes the final step in the legislative process before the final vote. This tax would amount to 3% of the revenues received by large companies for the provision of digital services in France from 2019 to 2021. According to Senators Grassley and Wyden, the DST “would unfairly target certain U.S.-based multinational companies, apply retroactively to the beginning of this year, and potentially lead to significant double taxation."

U.S. Supreme Court Denies Cert In Section 232 Challenge

Seth Atkisson

On June 24, 2019, the United States Supreme Court declined the American Institute for International Steel’s (“AIIS”) unusual request to have the Supreme Court directly hear its appeal without the ruling of an appeals court. Instead, the AIIS will have to first present its appeal to the U.S. Court of Appeals for the Federal Circuit. The group is appealing the March 25, 2019 ruling of the U.S. Court of International Trade that President Trump’s use of Section 232 of the Trade Expansion Act of 1962 to impose steel tariffs was lawful. The Supreme Court’s ruling that AIIS must follow the normal course of appeals leaves open the possibility that the Supreme Court will hear the case at a future date, but the Supreme Court’s review is not guaranteed. The Court will decide whether to hear the appeal only after the U.S. Court of Appeals for the Federal Circuit issues a ruling in the case.