U.S. Tax Reform: Impacts and Opportunities for Mexican Businesses, Part 2 - An Overview of the Tax Act's Effects on Various U.S.-Mexico Corporate Structures

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HIGHLIGHTS:

  • As noted in Part 1 of this series, new H.R. 1, informally known as the Tax Cuts and Jobs Act (Tax Act), has been the most important change to the U.S. tax code in a generation.
  • In Part 2, this client alert continues to address the Tax Act's most important implications on corporations and individuals in a Mexico-U.S. context.

As noted in Part 1 of this series, new H.R. 1, informally known as the Tax Cuts and Jobs Act (Tax Act), has been the most important change to the U.S. tax code in a generation. For companies across a variety of sectors the Tax Act has potential implications for both Mexican direct investment into the U.S. and for U.S. direct investment into Mexico. In this Part 2, we continue to address the Tax Act's most important implications in a Mexico-U.S. context.

This client alert does not represent a full analysis of the matters presented and should not be relied upon as legal advice.

A. Mexican Corporations and Individuals with Businesses and Investments in the U.S. – Corporation v. Pass-through

As a result of the Tax Act, the gap between the new 21 percent U.S. corporate rate and the 37 percent rate on pass-through business income (assuming the 20 percent deduction on pass-through income is not applicable) might affect decisions on whether to structure business operations through a U.S. pass-through entity or a U.S. corporation. The best alternative will generally depend on the specific circumstances in any given case.  

Structure 1: Mexican Corporation or Individual Shareholder with U.S. Subsidiary Corporation

The reduced corporate rate could at first glance incentivize operating in corporate form. However, a second level of tax exists when cash is distributed from a U.S. corporation.

Besides the 21 percent corporate tax payable by U.S. corporations, a U.S. withholding tax of 30 percent (generally reduced to zero percent, 5 percent or 10 percent as the case may be underthe U.S.-Mexico Income Tax Treaty) will apply when such income is distributed as dividends from such U.S. corporation to Mexican shareholders.

This will result in a combined U.S. federal income tax of up to 44.7 percent [21 percent + 30 percent (1-0.21)], assuming no reduced treaty rate is available, for Mexican corporate or individual shareholders with respect to a U.S. corporation's income or gain that is distributed to them, as opposed to a 54.5 percent effective rate under the previous law.

Under this structure, a Mexican corporation should recognize the distributed amount as taxable income in Mexico and pay the corresponding tax at a rate of 30 percent. In case of Mexican individuals, they should also recognize the income and pay an additional definitive tax of 10 percent over the dividends received from the U.S. corporation.

The Mexican corporation will generally be able to obtain a foreign tax credit in Mexico for the income taxes paid by the U.S. subsidiary and for the taxes withheld in the U.S. upon a dividend distribution. On the opposite side, a Mexican individual shareholder will not be able to credit in Mexico the taxes paid directly by the U.S. subsidiary in the U.S. Only the taxes withheld in the U.S.

Structure 2: Mexican Corporation with a U.S. Pass-Through Entity or Direct Business in the U.S.

Mexican corporations with a U.S. trade or business or, with respect to beneficiaries of the U.S.-Mexico Income Tax Treaty, a U.S. permanent establishment (USPE) or Mexican corporations with an interest in a pass-through entity, such as a partnership or a Limited Liability Company (LLC)1 treated as such, doing business in the U.S., will be subject to a flat U.S. federal corporate income tax of 21 percent on such U.S. trade or business income, as opposed to the previous maximum 35 percent rate.

A Mexican corporation generating business income in the U.S. through a USPE or a pass-through entity is also subject, at yearend, to a U.S. "branch profits tax" at a rate of 30 percent (generally reduced to zero percent, 5 percent or 10 percent as the case may be under the U.S.-Mexico Income Tax Treaty) applicable on the Mexican corporation's after-tax U.S. business income, irrespective of distributions. This will result in the same combined U.S. federal income tax rate as in Structure 1 of 44.7 percent, assuming no treaty rate is available.

If instead, passive income, not effectively connected to a U.S. trade or business, is generated in the U.S. through a U.S. pass-through entity, such entity will not be subject to tax in the U.S. But the Mexican corporate partner of the same will be subject to a 30 percent domestic withholding tax on gross U.S. source passive income, reduced or eliminated in certain circumstances under the U.S.-Mexico Income Tax Treaty, and should also generally recognize this income on a current basis, irrespective of any actual distribution, paying income tax at the rate of 30 percent minus available foreign tax credits, if any.

Structure 3: Mexican Individual with a U.S. Pass-Through Entity or Direct Business in the U.S.

Mexican individuals with a USPE or a pass-through entity generating business income will be subject to a U.S. federal income tax at the new graduated tax rates with a maximum rate of 37 percent, instead of the previous maximum rate of 39.6 percent.

The additional deduction of up to 20 percent of "Qualified Business Income" derived by a Mexican individual through pass-through entities engaged in a "Qualified Trade or Business" would in effect reduce that maximum rate down to 29.6 percent [37 percent (100 percent-20 percent)]. Yet, a Mexican individual will be restricted to fully apply such deduction in specific circumstances (e.g., if the business has no sufficient W-2 wages payable to employees or depreciable property, or if the business is not a Qualified Trade or Business).

On the other hand, if the U.S. pass-through entity earns U.S. source passive income, not effectively connected with a U.S. trade or business, there will be no tax liability in the U.S. at the entity level. However, the Mexican individual will be subject to a 30 percent withholding tax in the U.S. on a gross basis, reduced in certain circumstances under the U.S.-Mexico Income Tax Treaty.

In Mexico, this income should be accumulated by the individual and subject to a tax at the relevant marginal tax rate of a maximum 35 percent minus available foreign tax credits, if any. In addition, a definitive tax of 10 percent would apply over the received distributions. These rates, however, may change in certain cases where the Mexican anti-deferral (CFC) regime, would also be applicable.

B. Investments in U.S. Real Estate

Passive rental income from real property located in the U.S. and the gain from its sale is subject to tax in the U.S. regardless of the foreign investor's personal tax status. The method by which real property income will be taxed depends on whether the foreign person who owns the property is treated as engaged in a U.S. trade or business or engaged in merely a passive activity.

Rental income

Rental income was left untouched by the Tax Act. If a Mexican invests in real property in the U.S., does not engage in substantial management in the U.S. (including through agents) of such property, and obtains only rental income out of the same, a withholding tax of 30 percent (not reduced by the U.S.-Mexico Income Tax Treaty) will be applicable to the gross receipt of the rents. A Mexican resident may elect to treat such passive rental income as effectively connected to a U.S. trade or business, in which case no withholding tax but ordinary corporate and individual progressive rates would apply over a net basis, in addition to U.S. branch profits tax for Mexico corporations. Under this election, mortgage interest, real property taxes, maintenance, repairs and depreciation may then be deducted in determining net taxable income, although the owner will have to file U.S. tax returns.

Dispositions of U.S. Real Estate Property

As under current law, Mexican individuals or corporations are not subject to U.S. income tax upon the sale of stock in a U.S. corporation unless the U.S. corporation is sufficiently invested in real property such that it is treated as a "U.S. Real Property Interest."

The disposition of a U.S. Real Property Interest by a foreign person is subject to the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA), which includes U.S. withholding on gross proceeds. A U.S. Real Property Interest includes any real property in the U.S. and generally stock of a U.S. corporation whose value derives more than 50 percent from investments in U.S. real property. U.S. Real Property Interests held by partnerships are attributed proportionally to their partners.

Under FIRPTA, any gain or loss realized by a non-U.S. resident from a direct or indirect disposition of real property, including gains derived from real estate investment funds, will be treated as if such gain were effectively connected to a U.S. trade or business.

Mexican corporations are generally subject to the following taxes if a gain is derived, directly, from the sale of a U.S. Real Property Interest or, indirectly, through a pass-through entity: 1) a U.S. 21 percent federal corporate income tax over the gains (as opposed to a previous 35 percent), collected in advance through a 15 percent withholding by the purchaser on gross proceeds,2) a U.S. branch profits tax of 30 percent over the after-tax profits or dividend equivalent amount (reduced to zero percent, 5 percent or 10 percent under the U.S.-Mexico Income Tax Treaty) in cases other than sales of U.S. corporations treated as U.S. Real Property Interests, and 3) to a 30 percent Mexican corporate tax on the gain realized subject to reduction by the foreign tax credits for the income taxes mentioned in 1 and 2, under certain circumstances.

Mexican individuals, on the other hand, are generally subject to the following taxes if a gain is derived from a direct sale of a U.S. Real Property Interest, or indirectly through a pass-through entity: 1) a U.S. 37 percent or 29.6 percent (if the 20 percent partnership deduction applies) income tax over the gains, unless it is deemed as a long-term capital gain in which case a maximum 20 percent U.S. income tax rate should apply, collected in advance through a 15 percent withholding2 applied by the purchaser over the gross amount of the price, and 2) to a Mexican maximum marginal tax rate of 35 percent over the gain realized subject to reduction by the foreign tax credits for the income tax mentioned in 1 above, under certain circumstances.

On the other hand, gains from dispositions of an interest in a partnership whether U.S. or foreign, are also subject to the FIRPTA tax to the extent of U.S. Real Property Interest owned by the partnership, and to a 15 percent withholding if 50 percent or more of the value of the gross assets consists of U.S. Real Property Interests and 90 percent or more of the value of the gross assets consists of U.S. Real Property Interests, plus cash. Even if the sale is not subject to FIRPTA withholding, the disposition may be subject to 10 percent withholding under new section 1446(f). See Section D below.

There is no silver bullet that resolves all of the issues FIRPTA presents to Mexican investors. In many cases an approach may solve disclosure requirements but will not address their tax duties. In this respect, structures such as a leveraged-blocker structure, a shared-appreciation-mortgage structure, foreign-trust-and-disregarded-subsidiary structure and foreign-blocker-with-incorporated-LLC-subsidiary structure should be analyzed under the light of the new rates and provisions applicable on interest deduction limitations.

C. Sale of a Mexican Subsidiary

The Tax Act does not provide for a specific tax exemption of gain realized from a sale of any foreign subsidiary.

However, gain from the sale of a CFC could be exempted from U.S. taxation based on the implemented participation exemption under the Tax Act to the extent that the gain is treated as a dividend.3 Such gains should be treated as dividend to the extent of the undistributed and untaxed earnings of the CFC under section 1248, which may be increased by a section 338 election on the part of a U.S. buyer, under which the foreign target corporation would have been deemed to have sold the foreign target's underlying assets, increasing the amount of ordinary "dividend" income in the hands of any U.S. seller.

However, consideration must also be given to the amount of global intangible low-taxed income (GILTI) and Subpart F income that would be triggered upon such an election and deemed sale of assets.

Although the gains from the sale of a Mexican subsidiary could be treated as dividends for U.S. tax purposes, the transaction should still be treated as a sale of stock for Mexican tax purposes in which gains will be deemed as Mexican source income and generally subject to a 25 percent over the gross paid amount or 35 percent income tax in Mexico over the gain amount,4 payable directly by the seller if both parties are non-Mexican.

If under the Tax Act such gain is characterized as a dividend exempt in the U.S. under the participation exemption regime, then access to foreign tax credit in the U.S. for the tax paid in Mexico by the U.S. seller could be compromised. Each sale of a Mexican target among U.S. corporations has to be carefully studied to see if any U.S. tax election is advantageous.

Now, under the Mexican Income Tax Law, a non-Mexican seller of a Mexican target can either pay tax over any Mexican source capital gain derived from the sale of the target at a rate of 25 percent applicable over the gross paid amount or, if the U.S. seller so opts, at an alternative rate of 35 percent applicable over the net gains amount5 (Net Election). The Net Election, however, is only available to sellers not residents in countries with a "territorial tax system."6

Until 2013, the Mexican Income Tax Law transitory provisions had a list citing the countries with a territorial system. Not anymore. Now, this determination will generally depend on how this regime is commonly understood under international tax principles.

Territorial taxation is the imposition of tax exclusively on domestic source income exempting any income arising outside the country irrespective of whether the income is derived by a resident or a nonresident. That is, the taxpayer's residence country relinquishes any tax jurisdiction over the income earned outside its borders. This way double taxation is eliminated by exempting the foreign source income from residence country tax.

Given the new participation exemption regime in the U.S., there may be space to argue that a U.S. seller of a Mexican target will not be eligible to make a Net Election under Mexican Income Tax Law. However, the enacted participation exemption under the Tax Act should not be sufficient to render the U.S. a territorial system and hence the Net Election unavailable to U.S. sellers of Mexican targets.

Over the last three decades, most Organization for Economic Cooperation and Development (OECD) countries have shifted toward quasi-territorial tax systems and away from residence-based or "worldwide" systems. However, no country in the OECD has a pure territorial tax system with no limits or restrictions.

In countries such as Hong Kong, Denmark or France, tax exemptions over foreign source income are limited to certain types of income (i.e., active business income earned in foreign countries). Further, the exemption is sometimes restricted to income that has been subject to tax, or subject to a minimum rate of tax, in the foreign country. In other jurisdictions, foreign source income is included in income but only for the limited purpose of determining a taxpayer's average tax rate as if the foreign income were taxable. Belgium, Finland, Germany and The Netherlands use this exemption with progression method.

In fact, many countries with territorial-like systems such as Australia, Canada, Japan and the United Kingdom do exercise residence-based taxation over certain types of foreign-source income, such as passive income or income earned in certain low-tax foreign jurisdictions, such as in the U.S. where U.S. holders of foreign subsidiaries should continue to include Subpart F income and GILTI in the U.S. tax base.

Even when now many OECD members have implemented such regimes and offer some exemption or deduction for dividend income, as well as gain on the sale of foreign affiliate shares, there has not been any precedent in which the use of the Net Election by a foreign seller of these European countries has been controverted by the Mexican authorities.

The limitation has been typically applied to more pure territorial systems similar to those in countries such as Bolivia, Costa Rica, Guatemala, Panama and Uruguay where no, or no minor, limits on its application exist.  

D. Sale of a Partnership Interest

In the pre-Tax Act era, the sale by a Mexican individual or corporation of an interest in a U.S. partnership (including an LLC taxed as a partnership), was not subject to U.S. federal income or withholding tax provided that the partnership did not hold a U.S. Real Property Interest. The Internal Revenue Service (IRS) has historically taken the position that dispositions of interests in partnerships engaged in a U.S. trade or business give rise to effectively connected income, but the U.S. Tax Court held contrary to the IRS position in 2017.

The Tax Act reverts such court decision in favor of the historical IRS position and provides that any gain recognized by a Mexican investor on the sale of an interest in a partnership with a U.S. trade or business will be subject to U.S. tax. Such sale will also be subject to the U.S. branch profits tax if the Mexican seller is a corporation. As of 2018, the Tax Act also requires the U.S. buyer of such interest to withhold 10 percent of the seller's realized amount as an advance tax payment of the Mexican seller.

E. Transfer of Property from a U.S. Person to a Mexican Corporation

Prior to the Tax Act, in certain circumstances, a transfer of property to a Mexican corporation for use by such Mexican corporation in the active conduct of a trade or business outside of the U.S. was not a gain recognition event. Now, in all cases, there will be an imposition of U.S. tax on built-in gains realized on property, including intangibles, transferred from the U.S. to a Mexican corporation.

Regarding intangible property, such transfer gives rise to a deemed arm's length royalty over the property's useful life. The Tax Act specifies that goodwill, going concern value, and workforce in place shall be treated as intangibles for this purpose.

As a result, transfers of assets by a U.S. person to a Mexican corporation will be subject to this new burden. It is expected that this could have a significant impact over oil and gas companies that usually send resources like these into Mexican corporations.

F. Full Depreciation of Certain Qualified Property

In the U.S., as in Mexico, the cost of assets that produce benefits over time to a taxpayer's business (such as plants or equipment) is generally capitalized and recovered through depreciation or amortization allowances.

As a way to encourage business investment, the Tax Act provides for a full immediate depreciation for capital expenditures of "Qualified Property," generally tangible property with a recovery period of 20 years and certain computer software, as opposed to the prior law immediate expensing of 50 percent with remaining basis recovery over several years depending on the property's statutory useful life. This new rule applies not only to newly acquired property placed into service but also to used property acquired from unrelated parties other than in a nonrecognition transaction.7

To maximize the benefits of this provision, certain structuring alternatives like recasting a stock sale as an asset acquisition for U.S. tax purposes or a sale-leaseback transaction could be considered.

For example, if a U.S. tax resident is selling a Mexican Subsidiary to a U.S. purchaser, it could be desirable to recast the originally stock sale as an asset sale, since a 100 percent immediate expensing would be available to the purchaser in the U.S., so long as the underlying assets falls within the "Qualified Property" definition. Yet, this election must be treated with care since such an election may also cause net harm to a U.S. seller due to giving rise to GILTI and/or Subpart F income.

Individuals will be even keener than corporations to opt for these actual or deemed asset acquisitions of Qualified Property as a result of materially higher tax rates applicable to them.

It might seem attractive for Maquilas in Mexico that are owners of the machinery and equipment to sell such machinery and equipment to a U.S. entity. By doing so, the Maquila entity will turn into a pure service provider for the U.S. entity and the latter could immediately expense its cost. Yet, in these scenarios it is likely that the U.S. entity could end up creating a permanent establishment in Mexico. Generally, U.S. entities are exempted of creating a permanent establishment as a result of the legal and economic relationship that they have with enterprises that carry out Maquila operations in Mexico. However, this is true as long as such machinery and equipment have not been owned before by the enterprise performing the toll manufacturing operation in Mexico. 

Immediate expenses of the Qualified Property could lead to businesses borrowing money to immediately acquire assets that they can expense. Therefore, the Tax Act also established new limits to interest deductions.

G. Deductibility of Interest Payments

Multinational corporations have an incentive to lower their worldwide tax burden by taking out loans in high-tax countries, where they can take interest deductions, and lend from low-tax countries, where they can realize interest income at lower rates.

To address this, the Tax Act followed similar measures adopted by countries such as Germany, Japan, Norway and the United Kingdom and the European Anti-Tax Avoidance Directive. It replaces the prior "earnings stripping" interest deduction limitations, applicable only with respect to interest payments by U.S. corporations to foreign affiliates whose debt-to-equity ratio exceeded 1.5-to-1, for a general cap on net business interest expenses,8 whether paid to a related party or not.

Roughly put, the new cap of net business interest deductions will be equal to 30 percent of a taxpayer's annual "Adjusted Taxable Income" (ATI) which resembles EBITDA (and EBIT after 2022). Any disallowed net business interest expense can be carried forward indefinitely.

Generally, ATI is taxable income excluding nonbusiness income and loss, net operating losses and interest, and includes taxable income regardless of whether it is earned in the U.S. or abroad. To that end, inclusions into taxable income by a 10 percent U.S. shareholders of a CFC, foreign branch income and GILTI would increase U.S. taxpayer's ATI, but receipt of any dividends exempt under the new participation exemption would not.

This new limitation along with the new reduced U.S. corporate tax rate may incentivize a U.S.-Mexican multinational group to relocate its debt to the affiliates in Mexico, where interest deductions are more flexible, particularly since such affiliates will be subject to a tax rate higher than in the U.S.

Also, any additional deduction in Mexico, such as these interest deductions, should be appealing to U.S.-Mexican groups because any tax ultimately paid in Mexico could turn into a tax non-creditable in the U.S. under the participation exemption.

It is worth noting that, among other exempt businesses,9 this limitation will not affect the deduction of investment interest. Hence, interest paid or accrued by a U.S. fund, if considered investment interest, should not be subject to the referred cap.

Given the potential tax increase in U.S. companies with leverage, alternative financing structures that provide maximum current deductions, such as sale-leaseback transactions should be put into consideration.

Mexican corporations and individuals with U.S. trade or business income will also be subject to the interest deduction limitation.

H. Recapture of Losses in Foreign Branches

It is common for U.S. startups to adopt a branch form in the beginning of their operations abroad in order to recognize the losses generated in the business in those first years against U.S. income and switch to a corporate form whenever their foreign businesses become profitable. The Tax Act strengthened recapture rules applicable to these U.S. tax benefits, by making all branch losses recognized after 2017 subject to recapture upon the incorporation of a foreign branch.

Then, if a U.S. corporation transfers substantially all of the assets of a Mexican branch to a Mexican corporation, generally, the U.S. corporation would have to include in its gross income an amount equal to the losses incurred by the branch and previously recognized by the U.S. corporation.

I. Carry of a General Partner

Mexican Pension Funds participating as limited partners in foreign Limited Partnerships whose General Partner (GP) is a U.S. person, would have to take into account the new U.S. tax rates when it comes to calculating the carried interest to which the GP would generally be entitled to receive before other partners under a contract.

Market standard provides that distributions should be made to cover the GP's anticipated taxes using the highest combined maximum federal, state, and local individual tax rates to determine the amount of anticipated distributions. However, those provisions were drafted in an environment where the difference between individual and corporate rates in various jurisdictions was not especially significant. Now, the difference is greater. The top individual tax rate is 37 percent, the corporate rate is 21 percent and the deductibility of state and local taxes for individuals is significantly limited. This could result in greater overpayments to certain GPs holding their interest in corporate form. The traditional approach of using the highest combined individual rates to calculate the anticipated distributions to a GP might no longer render similar outcomes.


Notes

A sole-proprietorship LLC or one treated as a partnership for U.S. tax purposes.

2 In case the property is used by the transferee as a personal residence, the withholding rate may be reduced to 10 percent under certain circumstances.

3 Section 1248 of the IRC recast gain as dividends to the extent of CFC foreign earnings and profits. 

4 Taxed on a net gain basis and subject to a tax exemption under the U.S.-Mexico Income Tax Treaty under certain circumstances.

5 Under certain circumstances such gain might be exempted under the U.S.-Mexico Income Tax Treaty.

6 Other requirements apply for the Net Election to be available.

It does not apply to property currently used by the taxpayer.

8 Net Business interest expense is the business interest expense minus its business interest income. For this purpose, business interest expense means interest paid or accrued on indebtedness properly allocable to a trade or business. It does not includes investment interest.

9 This limitation does not apply to businesses with average gross revenue of less than US$25 million and certain entities engaged in a real estate trade or business.

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 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.