Polsinelli Commentary on the Final Opportunity Zone Regulations

Polsinelli
Contact

Polsinelli

Treasury issued final Opportunity Zone Regulations on December 19, 2019 (“Final Regulations”).  These Final Regulations update the first two rounds of Proposed Regulations (issued on October 29, 2018 and April 17, 2019).1 The Final Regulations clarified some key issues in connection with investing in and forming Qualified Opportunity Funds (“QOF”) and the QOF’s investments in Qualified Opportunity Zone Businesses (“QOZB”).2 Practitioners, commentators and investor groups pushed on many of the topics covered in the Proposed Regulations, and most of the issues covered were resolved very favorably in the Final Regulations. That said, there was at least one unwelcome surprise in the preamble to the final Regulations. A summary of the key issues and Polsinelli’s observations is below.

Some Key Points:

  • Treasury expressed strong reservations in the preamble on allowing opportunity zone benefits where a property owner sells its property to a QOZB or QOF and reinvests the proceeds from the sale back into the relevant QOF. Treasury stated that these transactions would be re-characterized as contributions of property by sellers in exchange for QOF interests, thereby precluding the seller from receiving opportunity zone benefits, and disqualifying the property as a qualifying asset (because it was not purchased).  This is true regardless of whether the property seller is a related party under the opportunity zone rules.  In other words, it appears that whether the seller ends up with less than 20% of the capital or profits interest in the buyer is totally irrelevant; 
  • Proposed rules on investment of gains from the sale of section 1231 property (real/depreciable property used in a trade or business) are eliminated – investors can invest the gross amount of gain from the sale of 1231 property (though investors relying on the proposed rules for investments made during the 180 day period beginning on December 31, 2019 are protected);
  • The Final Regulations add a third 180-day investment period for capital gains from property sales by flow-through entities.  Now, qualified gains from partnership and S corporations can be invested in the 180 days beginning on the date of the sale, the 180 days beginning on the last day of the entity’s tax year, and during the 180 day period beginning on the due date (without regard to extensions) of the entity’s tax return.
  • The Final Regulations clarify that each payment on an installment sale is a separate eligible gain in the year received (regardless of when the underlying sale occurred, even if prior to 2018);
  • Investors who hold QOF investments for 10 years can realize OZ benefits by excluding all gain from the sale of QOF interests, QOZB interests, and, critically, from assets held by QOZB partnerships and S corporations (except inventory sold in the ordinary course of business);
  • The working capital safe harbor may be expanded to up to 62 months if there is more than one qualifying investment relating to the same overall safe harbor plan;
  • “Original Use” of vacant property is expanded to include property that was vacant for one year prior to the designation of its location as an eligible opportunity zone census tract or for property that has been continuously vacant for 3 years;
  • “Substantial improvement” test now allows aggregation of tangible personal property, and even buildings, in some circumstances; 
  • Allows one 6 month “cure” period if a QOF fails a testing date;
  • Makes clear that gains from interim sales of assets when an investment in a QOF is held for less  than 10 years must be recognized by investors (although eligible capital gains derived on or before December 31, 2026 may be deferred by making a qualifying investment in a qualified opportunity fund);
  • “Clarification that (i) transfers by gift or in a divorce are inclusion events and (ii) transfers upon death are not inclusion events (related rules are adopted for beneficiaries and estates); and
  • Allows QOFs to merge in certain circumstances;

Explanations and Polsinelli Observations

I.  Investing Qualified Gains

  • Transactions Involving Sales of Property and Reinvestment of Gains in Buyer Will NOT Receive Opportunity Zone Benefits. The preamble to the Final Regulations states:

…an eligible taxpayer’s gain from a sale to or an exchange of property with an unrelated QOF (acquiring QOF), as part of a plan that includes the investment of the consideration received by the eligible taxpayer back into the acquiring QOF [or QOZB], is not eligible gain to the eligible taxpayer….

The preamble indicates that Treasury will treat such transactions as contributions of property by the seller to the QOF in exchange for an interest in the QOF, followed by a contribution by the QOF of the property to the QOZB.  Moreover, it apparently does not matter at all whether the seller ends up with less than 20% of the capital or profits interest in the buyer, making hash of the related party rules.  Moreover, Treasury’s view means that not only would the investor’s investment be ineligible for opportunity zone benefits (it would be treated as a tax –free contribution under Section 721 of the Code), but, even more importantly, the property could not ever be qualified opportunity zone business property because it was not acquired by the QOZB by “purchase.”  

Polsinelli Observations:  Although the language is a bit ambiguous – does the investor have to reinvest all of “the consideration” for the investment to be disqualified? – until the situation is clarified QOFs should not accept reinvestments of gains from the sale of the property acquired by the QOF (or QOZB). Also, Treasury’s view is based on general tax principals rather than a specific opportunity zone regulation, and so in theory every opportunity zone investment from the start of the program that involves a sale of property and reinvestment of the gain by the seller is at risk.  Finally, although the language in the preamble is limited solely to situations where the seller reinvests “the consideration received….back into the acquiring QOF [or QOZB]” any investment by a property seller into the buyer structure carries at least some risk of being re-characterized as a tax free contribution of property under section 721 of the Code.

  • Gross Section 1231 Gains Can Be Invested During 180 Day Period Beginning on Date of Sale.  The Proposed Regulations provided that only net Section 12313  gains could be invested, and then only during the 180 day period beginning on the last day of the taxable year (December 31 for calendar year taxpayers), because only at that time would an investor be able to know whether or not there was net Section 1231 gains.  This resulted in a sometimes lengthy window between recognition of the Section 1231 gain and the ability to invest such gain in a QOF and a requirement to manage Section 1231 losses to make sure there were net Section 1231 gains at the end of the year.

The Final Regulations eliminate all differences between Section 1231 gains and other eligible gains.  That is, gain from each sale of 1231 property can be invested without regard to other sales of 1231 property, and on a gross basis, without taking into account any other Section 1231 gains or losses.  The general tax treatment of net Section 1231 gains or losses is now done without including the invested Section 1231 gains, which will now be accounted for in 2026 (or in the year of disposition of the QOF interest, if earlier). 

The Final Regulations also confirm that gross Section 1231 gains can be invested directly by partnerships and S corporations that sell the property.  There had been concern that Treasury would only permit the investors in flow through entities (and not the flow through entity itself) to invest Section 1231 gains because, arguably, that was where the netting for Section 1231 gains occurred. 

Polsinelli Observation:  Investors and sponsors were concerned that subsequent Section 1231 losses could eliminate Section 1231 gains, and “initial funding loan” mechanisms where being used to bridge the gap between sale date and the day you could invest the gains as equity into a QOF.  The Final Regulations eliminate the need for this complex structuring.  The Final Regulations also grandfather 2019 investments of Section 1231 gains under the proposed rules.

  • Beginning of the 180 Day Window for Flow-Through (Schedule K-1) Gains. The Proposed Regulations provided that if certain flow through entities, such as partnerships, S corporations, and certain non-grantor trusts (entities for which the investors receive a Schedule K-1 with the investor’s allocation of the entities’ tax items) did not invest any capital gains directly, then the investors could elect to invest the capital gains themselves, with the 180 day window beginning on either (i) the 180 day window beginning on the date of the capital gain event or (ii) the 180 day period beginning on the last day of the flow through entities taxable year.  This provided partners (especially passive partners), who may not otherwise realize a sale had occurred an opportunity to invest.

The final Regulations added an additional option for investors with gains from flow-through entities.  In addition to the two options listed above, the final regulations allow investors to invest gains from pass-through entities during the 180 day window beginning on the due date for the pass-through entity’s tax return, without extensions (generally March 15th for calendar year flow through entities).  

Polsinelli Observation:  This additional window acknowledges that many investors wouldn’t learn about a capital gain event until the receipt of the Schedule K-1, and this provides the investors additional time upon learning upon the capital gain event.  Investors should consider adding provisions to operating agreements providing that the manager of the partnership or other flow-through entity will notify the investors of capital gain events, at a minimum by the unextended due date of the entity’s tax return.  It also can extend the investment period to as much as 21 months after the original sale.

  • Beginning of the 180 Day Window for Installment Sale Gains. The final Regulations provide that eligible capital gains include gains recognized under the installment method (provided such gains otherwise qualify as eligible gains). Taxpayers can treat the first day of the 180 day window for investing such gain as either the date a payment on the installment method is received or the last day of the taxable year such installment gain is recognized.  

Polsinelli Observation: The Regulations specifically provide that gains realized after January 1, 2018 from a pre-2018 installment sale are eligible gains for opportunity zone investment.  When a capital asset is sold on the installment method, taxpayers should consider whether to opt out of the installment method entirely in order to make a full OZ investment in the year of the sale (for example, if the taxpayer has a current OZ opportunity) or if it would be more beneficial to recognize the gain over time to allow many smaller OZ investments over time.

II.  10-Year Exit

  • Even More Favorable Resolution to Sales of QOZB Assets vs. OZ Fund Interests. The Proposed Regulations allowed QOFs organized as partnerships, S corporations and REITs to sell their assets (e.g., interests in QOZBs) and, assuming that the investor has held the investment in the QOF for more than 10 years, the investor would pay no capital gains tax. A QOZB does this by making an election to exclude all gains recognized during the taxable year from income, except for income from sales of inventory in the ordinary course of business.  

     

The final regulations expand on this by (1) permitting any sale of assets at any level, including a QOZB selling its assets, and (2) allowing exclusion of all gain by investors who have held their QOF interests for at least 10 years, including any gain arising from recapture.  The only exception to this benefit is for inventory sold in the ordinary course of business.  Note that any reinvestment of such proceeds (with the gain excluded) is treated is a non-OZ investment (“fresh equity”) and that portion of an investor’s investment does not get further OZ benefits.  This ability to exclude gains when a QOF or QOZB sell assets does not apply to investors in QOF organized as C corporations.
Polsinelli Observation:  This change will allow fund sponsors to organize more traditional multi-asset investment funds without having to worry about finding a buyer willing to acquire the equity interests in the QOZB.  This also eliminates the distinction between selling a QOF interest, where all gain was excluded, and sales of QOF assets, where only capital gains were excluded from tax, but not ordinary income, from things like hot assets or recapture. Note also that the Final Regulations do not modify the tax treatment of sales of assets within the QOF investor’s 10-year holding period.  These are still taxable transactions (although such gains may potentially be deferred by being reinvested into a QOF).

III.  QOF and QOZB Testing and Qualifying Property

  • Self-Constructed Property is “Purchased” for Opportunity Zone Purposes.  The Final Regulations confirm what many had assumed, that self-constructed property intended to be used in the trade or business is a qualified asset.  The materials used for the construction of the property must themselves be qualified opportunity zone business property.  The Final Regulations further state that such property is considered “acquired” when significant work of a physical nature begins, and provides a safe harbor when 10% of the total expected construction cost is expended.  The FAQ accompanying the final regulations states that, for purposes of the 70% test, self-constructed property is valued at the “purchase price as of the date when significant work of a significant nature begins.”

Polsinelli Observation: The meaning of the term “purchase price” is unclear, but clearly includes costs incurred by a testing date.

  • Expansion of the Working Capital Safe Harbor.  The Final Regulations expand the working capital safe harbor for start-up businesses where there are multiple contributions of capital to a QOZB, and therefore more than one working capital safe harbor plan document.  To qualify, each subsequent cash infusion must be covered by an additional working capital safe harbor and the working capital plan for the additional cash infusions must “form an integral part of the plan covered by the initial working capital safe harbor period.” The 62 months is a maximum period regardless of number of cash infusions.  Moreover, the additional infusions must not be de minimis – basically designed solely to obtain the additional period.  The Final Regulations further provide that, during the working capital safe harbor period:

1) NQFP in excess of 5% limit will not cause business to fail to qualify a QOZB;

2) gross income earned will be counted towards the 50% gross income requirement; 

3) tangible property purchased, leased, or improved by a business with cash covered; by working capital safe harbor will count for 70% standard; and

4) intangible property will count toward 40%.

Polsinelli Observation:  As discussed below, although property being improved with cash subject to the working capital safe harbor (and property that is expected to be substantially improved within the requisite 30-month period) is counted for purposes of the 70% test, the Final Regulations do not provide specific guidance on how such property is valued.  Based on rules for self-constructed property, it appears that valuation is based on the actual costs incurred in constructing and improving the property.     

  • Modifications to the Original Use Test.  The Final Regulations modify the rules for when vacant property can meet the original use test.  Vacant property will now meet the original use test if it was vacant for at least one year at the time the opportunity zone containing the property was designated and has remained vacant since such time, or, if the property does not meet this test, if it has been vacant for three years beginning with the date the relevant opportunity zone was designated.  

    The Final Regulations define “vacant” to mean “significantly unused,” which means that more that than 80% of the building or land, as measured by square footage of usable space, is not being used. 

    In addition, so-called “brownfield” sites will automatically meet the original use test and the original use test will be met for land and structures.  Finally, real property (land and structures) purchased from local government will meet the original use test if held by government pursuant to an involuntary transfer (abandonment, bankruptcy, etc.).

  • Modifications to the Substantial Improvement Test.  The most important change from the proposed regulations is that the Final Regulations provide an opportunity to aggregate property and even buildings for purposes of the substantial improvement test.  Previously, commentators were concerned that each piece of tangible property had to be separately considered, no matter how small, and that administrative problems with the test might discourage investors from investing in operating businesses.  The Final Regulations provide some relief, and also allow some aggregation of buildings so that integrated real estate projects can more easily qualify.  

First, a QOZB can include the cost of purchased “original use” assets that otherwise qualify as qualified opportunity zone business property in determining whether a property has been substantially improved if the purchased assets (i) are used in the same trade or business in the opportunity zone (or a contiguous opportunity zone as the non-original use asset and (ii) the purchased assets improve the functionality of the non-original use asset.  The Final Regulations provide an example whereby a hotel can include the cost of linens, furniture, etc. used in the hotel in determining whether the hotel building has been substantially improved.  If this approach is used, the purchased property is not treated as original use property but instead, its basis is added to the non-original use property for purposes of the 70% test.  The non-original use property must still be improved by a non-insubstantial amount.

Second, in some circumstances the Final Regulations allow a QOZB to aggregate the cost of buildings and treat them as a single asset for purposes of the substantial improvement test.  The Final Regulations provide that two or more buildings can be aggregated and treated as single asset if they are on single deed or, if on multiple deeds, if they are contiguous.  Such buildings constitute an “eligible building group.”  The eligible building group must (a) be operated exclusively by the QOF or QOZB; (b) the buildings in the group must share significant centralized business elements, such as personnel, accounting, legal, manufacturing; and (c) the buildings in the group must be operated in coordination with, or reliance upon, one or more trades or businesses.  

Polsinelli Observation:  The new aggregation rules provide a pathway for operating businesses and real estate projects to more easily meet the substantial improvement test.

  • Qualification of Property During Substantial Improvement and Working Capital Periods.  The Final Regulations provide that property that is in the process of being substantially improved (and is reasonably expected to be substantially improved within the 30-month period) or that is the subject of a working capital safe harbor is counted as qualified opportunity zone business property during the improvement period and working capital period, as the case may be.  However the Final Regulations do not provide guidance on what value is counted for purposes of the 70% test.  

The Final Regulations also confirm that, while land does not need to meet either the substantial improvement or original use tests, it must meet all other requirements, such as being purchased after December 31, 2017 from an unrelated party.  In addition, to discourage “land banking,” the Final Regulations provide that unimproved land must be improved by “more than an insubstantial amount.”  The Final Regulations do not provide a specific percentage but do give examples of qualified improvements.  These include an irrigation system put in for a farming business or grading land in connection with a construction business as having more than an insubstantial amount of improvement.

  • Treatment of Inventory.  The Final Regulations allow a QOF or QOZB to choose, on an annual basis, to include or exclude inventory in calculation of 90% test (for QOFs) or the 70% tangible property test (for QOZBs), so long as the choice is applied consistently with respect to the semi-annual tests in each period.  If included, inventory produced by an eligible entity after December 31, 2017 meets the original use test.  The Final Regulations confirm that inventory in transit from a vendor to a facility in an opportunity zone or from the facility to customers are considered used in an opportunity zone, even while in transit or temporarily warehoused outside of an opportunity zone for up to 30 days.

Polsinelli Observation:  Including Inventory in the asset test calculation should help make it easier for operating businesses to qualify, as most company’s inventory will have turned over and therefore will generally have been acquired after 2017, and if located or assembled in an opportunity zone should qualify as a “good asset” for asset test purposes.  One issue to consider is whether custom inventory prepared for a QOZB outside of an opportunity zone will be considered in connection with the requirement that 50% of a QOZB’s revenue come from the active conduct of a trade or business in an opportunity zone.

  • Cure Period. The Final Regulations provide that a QOF (or QOZB) can elect to apply a six-month cure period should it fail a 90% test on a testing date.  During this cure period, any QOZB that does not meet its 70% asset test will nevertheless be treated as qualified opportunity zone property.  However, if the QOZB fails the test at the end of the sixth month cure period, and if the QOF fails its 90% test (counting the QOZB as a non-qualified asset), then the QOF will be subject to a penalty that treats the QOF as not qualifying for the entire cure period.   
  • Other Issues. There are a great number of other clarifications in the 544 pages of Final Regulations, including the following:
    • 50% gross income test.  The Final Regulations provide that:
    • The 50 percent gross income can be earned from any opportunity zone.  
    • A QOZB must maintain adequate records and implement sound processes to track the hours worked by and amounts paid to employees and independent contractors.  
    • Guaranteed payments paid to partners in a partnership for services are counted (but not other payments to such partners).
    • The Final Regulations imply that amounts paid to accountants, lawyers and other service providers are counted in the 50% test
    • Real property straddling an opportunity zone. The test:
    • Includes both a square footage and unadjusted cost test
    • The property can be separated by a road, railway, stream, etc.
    • Property is not contiguous if there is only a common corner 
    • Spousal transfers are inclusion events
    • For purposes of the 70% and 90% tests, assets not purchased, such as contributed property or, possibly, QOZB interests owned by a QOF, are valued at their fair market value as of the testing date.
    • There is a safe harbor for the 40% intangible property test, but it is quite opaque.    

1 Polsinelli’s summary of the proposed regulations can be found here and here

This summary assumes familiarity with general opportunity zone requirements.  Polsinelli’s general summary of opportunity zones can be found here.

Section 1231 gains are, generally, gain from depreciable property and real property used in a trade or business held for more than 1 year.

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.

© Polsinelli | Attorney Advertising

Written by:

Polsinelli
Contact
more
less

Polsinelli on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at www.jdsupra.com) (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

  • Email
  • First Name
  • Last Name
  • Company Name
  • Company Industry
  • Title
  • Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at privacy@jdsupra.com.

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • 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.

- hide

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.