Escape From New York — It Will Cost You

Farrell Fritz, P.C.
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If I Had a Dollar . . .

How many times have you sat with a client who wants to leave N.Y. for a jurisdiction with a more pleasant “tax climate?” A place where the combined state and local personal income tax rate does not approach 12.87-percent,[i] where the sales tax is well below 8.875-percent,[ii] where the estate tax rate is nowhere near 16-percent, and where the real property taxes are not the highest in the country.[iii]

The client has already identified this sanctuary; in fact, they have purchased a beautiful oceanfront residence[iv] in this Shangri-La, one that they claim puts their N.Y. apartment to shame (though they may keep the N.Y. property as an investment or hotel substitute). What’s more, they’ve moved all of their valuables and other cherished personal belongings to this new home.

When you ask whether they have changed their “living pattern” or adapted their activities to their “tax haven,” they reply that they now spend almost eight months of the year there, have joined local clubs and cultural organizations, have taken up surf fishing, and host all major family gatherings at their new home.[v]

Active Business Involvement

Then you turn the discussion to the source of the client’s wealth and cash flow: their business, headquartered in N.Y., and held in a business entity that is treated as a pass-through for tax purposes.[vi]

The client claims they are still active in the day-to-day management of the business – the internet and video-conferencing are wonderful things, they say. They maintain an office at the place of business, and they always visit the business when they’re in N.Y. The business pays them a generous “salary,”[vii] and periodically makes distributions.

You ask whether they plan to sell the business and, if so, when? In due course, they say, though probably sooner rather than later – they have no family member or key employee who is interested and/or capable of succeeding them, and they want to maximize the net proceeds from the sale.

You explain that, notwithstanding everything they have done to establish a new home outside N.Y.,[viii] they will remain subject to N.Y.’s personal income tax at least as to the income generated from their business, including a portion of their salary.[ix] The incredulous looks on their faces tell you to continue explaining. Even if N.Y. acknowledges that they are nonresidents, you tell them – and this is not a foregone conclusion based on the above facts – they will remain subject to N.Y. income tax on their N.Y. source income, which includes their share of the S corporation’s income that is sourced in N.Y.[x]

What’s more, you tell them, the fact that they are still very active in their N.Y. business may be enough for N.Y. to establish that they remain domiciled in N.Y.[xi], especially when one factors in their continued ownership of the N.Y. residence. You remind them that, in order to establish a change in domicile, they must demonstrate that they have “abandoned” N.Y. as their home and have “landed” elsewhere. Thus, the sale of the business may be the factor on which the abandonment of their N.Y. domicile depends; unfortunately, the sale itself will be subject to tax in N.Y.

Even if the sale of the business were not a necessary element in securing nonresident status – for example, where the clients have successfully changed their status vis-à-vis the business into that of passive investors[xii] – the gain from such sale may remain subject to N.Y. income tax as NY-source income, as illustrated by a decision of the Division of Tax Appeals just a few weeks ago.[xiii]

The Stock Sale

Taxpayer was an individual nonresident of N.Y. during the years 2009, 2010 and 2011. Through July 31, 2009, Taxpayer owned 50-percent of the shares of Target, a corporation that had elected to be treated as an S corporation for Federal and N.Y. income tax purposes.[xiv]

Target’s shareholders (including Taxpayer; the “Sellers”) entered into a stock purchase agreement with Purchaser (a corporation) pursuant to which the Sellers would sell all of the issued and outstanding shares of Target stock to Purchaser. Under the terms of the agreement, the Sellers and Purchaser agreed to make an election under Section 338(h)(10) of the Code (the “Election”). Accordingly, though the transaction was structured as a sale of stock, the effect of the Election was that Target was deemed to have sold all of its assets in a taxable transaction, Purchaser was treated as having purchased the assets, so as to receive a step-up in the basis of the assets, and Target was deemed to have then liquidated.[xv]

Prior to closing on the sale of Target to Purchaser, and prior to agreeing to make the Election, Taxpayer consulted with his CPA regarding the tax consequences of the transaction, including specifically whether the Election would subject Taxpayer’s sale proceeds to N.Y. income tax. Taxpayer was advised that, at the time of the sale (i.e., in 2009), a stock sale that was treated as a deemed sale of assets pursuant to the Election did not change the nature of the transaction for N.Y. income tax purposes. Specifically, Taxpayer was advised that under a then recently-issued decision of the Tax Appeals Tribunal (Baum),[xvi] a transaction such as the proposed stock sale would be treated, for N.Y. purposes, as the sale of an intangible (i.e., a sale of stock), notwithstanding the deemed asset sale treatment for Federal tax purposes; thus, as a nonresident, Taxpayer would not be subject to N.Y. tax on the gain from such a sale.

Based upon the foregoing advice, that N.Y. tax would not be imposed on the gain from the sale transaction, Taxpayer agreed to forego continued negotiations seeking an increased purchase price (or gross-up) for any additional taxes resulting from the Election.[xvii]

As consideration for the sale transaction, Taxpayer received a cash payment plus an installment obligation. The installment obligation qualified for installment method reporting under the Code,[xviii] permitting recognition of gain only upon receipt of principal payments on the installment obligation.

The Issue is Joined

Target filed a Federal S corporation tax return,[xix] and a corresponding N.Y. tax return,[xx] for the short period spanning January 1, 2009 through July 30, 2009,[xxi]reporting a capital gain, on an installment basis, in excess of $6.0 million; on its N.Y. return for this short period, Target reported a 100-percent N.Y. business allocation percentage (“BAP”).[xxii]

N.Y. Amends the Tax Law

On August 11, 2010, the N.Y. Tax Law[xxiii] was amended to specifically provide that a non-resident S corporation shareholder must treat the sale of stock subject to an Election as the sale of assets, and must apportion the sale proceeds to N.Y. in accordance with the S corporation’s BAP, without consideration of any deemed liquidation (the “2010 Amendments”).

On August 31, 2010, the N.Y. Department of Taxation and Finance[xxiv] issued a memorandum providing public notice and guidance with respect to the 2010 Amendments.[xxv] This memorandum noted that the amendments were retroactive and, specifically, were effective for tax years beginning on or after January 1, 2007 and any other taxable year for which the period of limitations on assessment remained open.

Taxpayer Files

On October 14, 2010, Taxpayer filed his 2009 N.Y. nonresident income tax return,[xxvi] reporting thereon his share of the foregoing capital gain. By virtue of Target’s 100-percent BAP, Taxpayer reported 100-percent of his share of the gain arising from the sale as N.Y. source income. However, on the same return, Taxpayer reported a N.Y. subtraction modification removing 100-percent of the foregoing allocated capital gain resulting from the deemed asset sale of Target from his N.Y. adjusted gross income.

Installment Payments

For the years 2010 and 2011, Taxpayer received income from the installment payment obligation arising from the sale.

Taxpayer did not file an amended return for the year 2009, and did not file any N.Y. nonresident income tax return for either 2010 or 2011. As a consequence of this reporting position, Taxpayer did not pay any N.Y. personal income tax on the proceeds arising from the sale of Target to Purchaser.

The Audit

The Department examined the final S corporation return filed for Target for the short period spanning January 1, 2009 through July 30, 2009, and Taxpayer’s corresponding reporting of his share of Target’s income. The Department’s review of Taxpayer’s and Target’s returns resulted in a determination that the transaction was properly treated as a deemed asset sale under Section 338(h)(10) of the Code, with the proceeds from the transaction constituting NY-source income to the extent of Target’s BAP.

For 2009, the Department determined that Taxpayer should not have removed the capital gain from the deemed asset sale from his return. In turn, the entire gain was treated as NY-source income, allocable as based on Target’s BAP of 100-percent, and was subject to N.Y. tax.

For 2010 and 2011, the Department determined that Taxpayer was obligated to file and report the installment payments arising from the deemed asset sale as NY-source income, allocable to N.Y. based on Target’s BAP of 100-percent, and subject to N.Y. tax.

The Department issued a notice of deficiency to Taxpayer, asserting additional N.Y. personal income tax for the years 2009, 2010 and 2011.[xxvii]

Taxpayer protested the notice of deficiency.

Division of Tax Appeals

The question before the Division was whether the Department properly determined that a nonresident individual’s gain from the sale of the stock they owned in an S corporation was required to be included in that individual’s NY-source income where the parties to the transaction had elected to treat the transaction as a sale of assets under Section 338(h)(10) of the Code.

Taxpayer argued that the asserted deficiency should be canceled because the retroactive imposition of tax liability under the 2010 Amendments constituted a violation of the Due Process Clauses of the U.S. and N.Y. Constitutions.[xxviii]

Taxpayer maintained that he reasonably relied upon the Tribunal’s opinion in Baum, according to which the substance of the transaction remained a sale of stock, notwithstanding that the parties to the stock sale had made the Election; therefore, the gain from the sale was generally not NY-source income to a nonresident and was not required to be included in the N.Y. income of an S corporation, or to be passed through to its shareholders.[xxix]

The Division reviewed the aftermath of the Baum decision, specifically as it related to Taxpayer.

Post-Baum

On July 31, 2009 (i.e., after the decision in Baum), Taxpayer sold all of his shares in Target to Purchaser. The Baum decision was issued prior to the sale of Target, and was specifically relied upon by Taxpayer for his reporting position regarding his share of the gain from the sale, as received in the year of the transaction.

At that time, the Tax Law did not specifically address how a N.Y. nonresident’s gain from the sale of stock in a N.Y. S corporation would be impacted where such sale was treated, pursuant to an Election, as a deemed sale of the assets of the S corporation to the buyer, followed by a deemed liquidation of the S corporation.

In response to the result in Baum, N.Y. amended the Tax Law, effective August 11, 2010,[xxx] so as to address the issue of nonresident shareholders’ treatment of income related to an Election. Specifically, the Tax Law was amended to provide that, if the shareholders of an S corporation made an Election, there would be included in their income, for N.Y. tax purposes, the portion of the gain from the deemed asset sale that was derived from or connected with N.Y. sources. However, when a nonresident shareholder exchanged their S corporation stock as part of the deemed liquidation that follows the deemed asset sale, any gain recognized would be treated as the disposition of an intangible asset and would not be treated as NY-sourced.

The foregoing amendments to the Tax Law were made applicable “to taxable years beginning on or after January 1, 2007.”

The Division stated that the legislative findings accompanying the adoption of these amendments explained that they were necessary to correct the Baumdecision, which had “erroneously overturned” longstanding policies that nonresident S corporation shareholders who make an Election following the sale of their shares are taxed in accordance with the transaction being treated as an asset sale producing NY-source income.[xxxi]

On August 31, 2010, the Department issued a memorandum providing public notice and guidance with respect to the 2010 Amendments.[xxxii] This memorandum stated that the 2010 Amendments were effective for tax years beginning on or after January 1, 2007, and for any other taxable year for which the period of limitations on assessment remained open.

The August 11, 2010 effective date of the 2010 Amendments, and the August 31, 2010 issuance date of the Department’s memorandum, predated the October 14, 2010 filing of Taxpayer’s N.Y. tax return for 2009.

The Division’s Analysis

It was settled law, the Division stated, that the 2010 Amendments could be applied retroactively to tax years beginning on or after 2007, without violating the Due Process Clauses of the United States and New York State Constitutions. It was likewise well settled, the Division continued, that the interpretation and application of the Tax Law by Baum prior to the 2010 Amendments, as espoused by Taxpayer, was incorrect. Consequently, the manner in which Taxpayer’s 2009 tax return was filed, in October of 2010, was likewise incorrect.

Taxpayer did not contest these facts or the facial validity of the retroactivity of the 2010 Amendments. However, Taxpayer did contest the retroactive application of the 2010 Amendments to his particular circumstances, maintaining that such application resulted in an “as applied” violation of his due process rights.

Taxpayer pointed out that his transaction took place after, and in reliance on, the Tribunal’s decision in Baum. Accordingly, Taxpayer argued that the resulting “extra level of reliance” tipped the scale in his favor, and required a conclusion that the deficiency at issue represented an unconstitutional application of the 2010 Amendments.

The Division responded that acceptance of Taxpayer’s argument would have required the Division to ignore the legislative findings that the 2010 Amendments served to clarify and confirm the Department’s longstanding and correct interpretation of existing law, whereby gains from a deemed asset sale under Section 338(h)(10) of the Code were not excluded from a nonresident’s NY-source income as gains from the disposition of intangible assets, but rather are included to the extent of the S corporation’s N.Y. BAP.

At the time of enacting the 2010 Amendments, the legislature was aware of the Baum decision, and of the consequences resulting therefrom. It recognized that such amendments were necessary in order to cure the incorrect decision reached in Baum, to clarify the concept of Federal conformity, to avoid taxpayer confusion in preparing returns, to avoid complex and protracted litigation, and to prevent unwarranted refunds so as to stem the loss of revenue that would result from such incorrect decisions.

The Division explained that, by making the 2010 Amendments retroactive, the legislature “evinced both its clarifying and corrective aims.” In doing so, it drew no distinction between transactions that predated or postdated the decision in Baum, notwithstanding that some taxpayers could claim to have relied on Baum. The legislature did not limit the retroactive reach of the 2010 Amendments by any reference to the Baum decision, but rather extended retroactivity to all open years upon the foregoing clarifying and correcting justification bases. Thus, the Division concluded, the legislature’s intended sweep of retroactivity included those who could have relied on Baum.

In sum, the imposition of the tax at issue was not an unconstitutional application of the law in violation of constitutional due process standards. Accordingly, Taxpayer’s petition was denied, and the notice of deficiency sustained.

Planning?

The cost of moving to Shangri La may not be insignificant, especially for an individual N.Y. resident who owns an interest in a closely held business that operates within the state, who actively participates in the management of such business, and who is dependent upon the cash flow from the business.

For one thing, the individual’s continued ownership and involvement in the business may very well tip the scales toward a finding of continued resident status.[xxxiii]

If the individual were able to change the nature of their relationship to the business from that of an owner-participant to that of a passive investor, their continued association with the N.Y. business may not be as harmful to their claim of having abandoned their N.Y. domicile. In fact, the transition of managerial duties to another person may evidence an intent to begin a new “way of life” outside the state. Of course, this requires that the owner find someone who is capable of, and interested in, assuming these duties. The owner will certainly have to compensate this person at a level commensurate with their responsibilities; at the same time, the owner will have to cease taking a salary themselves.

Even if the owner were to successfully convert their status to that of a passive investor, if the business is owned through a pass-through entity (“PTE,” such as an S corporation or a partnership/LLC), the owner will still be subject to N.Y. income tax on their pro rata share of the PTE’s NY-source income.[xxxiv] What’s more, if the individual owner were to sell the business, it is unlikely that the buyer would agree to purchase the stock (in the case of an S corporation) without requiring an Election in order to step-up the basis of the underlying assets. As in the case of the taxpayer in the decision discussed above, that could result in significant NY-source income.[xxxv]

Did someone say “C corporation?” Don’t cut your nose to spite your face. There are Federal income taxes to consider – don’t lose sight of that.

Bottom line: there’s a lot of planning that has to precede the implementation of any steps to change a business owner’s resident status vis-à-vis N.Y.

—————————————————————————————————

[i] N.Y.S. at 8.82%, N.Y.C. at 3.876%.

[ii] N.Y.S. at 4.0%, N.Y.C. at 4.875%.

[iii] Whether in an absolute sense or as a portion of home value, depending upon the county.

[iv] Feel free to substitute a golf course, mountainside, or anything else that tickles your fancy – this is my post.

[v] Of course, they’ve also registered to vote there, and have registered their cars there.

[vi] An S corporation (IRC Sec. 1361), or an LLC that has not checked the box to be treated as an association (Reg. Sec. 301.7701-3).

[vii] Which, for our purposes, would include a guaranteed payment in the case of a partnership. IRC Sec. 707(c).

[viii] For the purpose of avoiding N.Y. tax.

[ix] See TSB-M-06(5)I for a discussion of the “convenience of the employer” test and the determination of the ratio of N.Y. working days to total working days.

[x] Tax Law Sec. 631(a). We’re focusing on the State’s taxation of nonresidents here.

[xi] See, e.g., Matter of Herbert L. Kartiganer et al., 194 AD2d 879.

[xii] According to the N.Y.’s Nonresident Audit Guidelines, a taxpayer’s continued employment, or active participation in N.Y. sole proprietorships and partnerships, or the substantial investment in, and management of N.Y. corporations or limited liability companies, is a primary factor in determining domicile. If a taxpayer continues active involvement in N.Y. business entities, by managing a N.Y. corporation or actively participating in N.Y. partnerships or sole proprietorships, such actions must be weighed against the individual’s involvement in businesses at other locations when determining domicile. The degree of active involvement in N.Y. businesses in comparison to involvement in businesses located outside N.Y. is an essential element to be determined during the audit.

[xiii] In The Matter of the Petition of Franklin C. Lewis, DTA No. 827791 (N.Y. Div. Tax App. 6/20/19).

[xiv] Generally, an S corporation does not pay income tax at the corporate level, but passes its income and deductions through to its shareholders, who report the same on their personal tax returns.

[xv][xv] Reg. Sec. 1.338(h)(10)-1(d).

Generally speaking, such an election at the federal level may be advantageous to a purchaser due to the stepped-up basis of the assets deemed to have been purchased for future depreciation and/or amortization purposes. This reduces the cost of the acquisition for the purchaser by allowing them to more quickly recover their investment in the transaction.

At the same time, such an election may be disadvantageous to the seller, due to a possibly greater federal tax liability as the result of being taxed at a higher rate on gain from the sale of assets than would be the case on gain from the sale of stock.

Since N.Y.’s income tax is a federal “conformity based” system, such an election can carry with it N.Y. state tax implications for both residents and nonresidents.

[xvi] Matter of Baum, Tax Appeals Tribunal (the “Tribunal”), February 12, 2009.

[xvii] The selling shareholders of a target corporation should always compare the net after-tax proceeds following a sale of stock coupled with a Sec. 338(h)(10) election with the net proceeds following a stock sale without such an election. It is not at all unusual for a seller to negotiate with the buyer for an increase in the purchase price by an amount such that the seller will end up with the same net proceeds had no election been made. On the one hand, the election is made jointly by the seller and the buyer; moreover, the amount of the increase will, itself, be amortizable by the buyer. On the other hand, a gross-up may cause the deal to be too expensive for the buyer.

[xviii] IRC Sec. 453.

[xix] IRS Form 1120-S.

[xx] Form CT-3-S.

[xxi] This omitted the date of the stock sale. The target’s S corporation election would normally terminate on the date of the sale – because of the ineligible C corporation buyer – such that the target’s last day as an S corporation is the immediately preceding day. However, when an election is made under IRC Sec. 338(h)(10), the target’s S corporation election continues through the end of the sale date in order to allow the pass-through to the target’s shareholders of the gain resulting from the deemed asset sale.

[xxii] Since its incorporation in N.Y. in 2002, 100% of Target’s receipts had been apportioned to N.Y. in its franchise tax filings.

[xxiii] The “Tax Law;” Section 632(a)(2).

[xxiv] The “Department.”

[xxv] See TSB-M-10 [10] I.

[xxvi] Form IT-203.

[xxvii] Plus interest and penalties.

[xxviii] Taxpayer also argued that the gain from the sale of Target was not subject to N.Y. tax because Target’s proper N.Y. BAP should have been zero, and not 100-percent as reported by Target. In almost all cases, the contents of the return constitute an admission by the filing taxpayer. What’s more, the taxpayer will rarely be allowed to disavow their own return position.

[xxix] https://www.taxlawforchb.com/2018/04/new-york-reminds-us-sale-of-intangible-property-may-be-taxable-as-sale-of-real-property/

Nonresidents are subject to N.Y. personal income tax on their N.Y. source income. NY-source income is defined as the sum of income, gain, loss, and deduction derived from or connected with N.Y. sources. For example, where a nonresident sells real property or tangible personal property located in N.Y., the gain from the sale is taxable in N.Y.

In general, under the Tax Law, income derived from intangible personal property, including gains from the disposition of such property, constitute income derived from N.Y. sources only to the extent that the property is employed in a business, trade, profession, or occupation carried on in N.Y. From 1992 until 2009, this analysis also applied to the gain from the disposition of interests in entities that owned N.Y. real property. However, in 2009, the Taw Law was amended to provide that items of gain derived from or connected with N.Y. sources included items attributable to the ownership of any interest in real property located in N.Y. For purposes of this rule, the term “real property located in” N.Y. was defined to include an interest in a partnership, LLC, S corporation, or non-publicly traded C corporation with one hundred or fewer shareholders, that owns real property located in N.Y. and has a fair market value that equals or exceeds 50% of all the assets of the entity on the date of the sale or exchange of the taxpayer’s interest in the entity.

[xxx] Section 632 (a) (2).

[xxxi] The “act is intended to clarify the concept of federal conformity in the personal income tax and is necessary to prevent confusion in the preparation of returns, unintended refunds, and protracted litigation of issues that have been properly administered up to now.”

[xxxii] TSB-M-10(10)I.

[xxxiii] Query whether they can move the business out of N.Y.? For our purposes, I am assuming that is not the case.

[xxxiv] The number of times I’ve been involved in a resident audit where the taxpayer already pays N.Y. income tax on all of their business income under these facts! Of course, the state is looking to also tax their investment income.

[xxxv] The seller may be able to negotiate a gross-up in the price to account for this tax liability.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at: privacy@jdsupra.com.

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
  • New Relic - For more information on New Relic cookies, please visit www.newrelic.com/privacy.
  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

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This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.