Update on Qualified Opportunity Zones: First Set of Guidance Issued

by Ballard Spahr LLP
Contact

Ballard Spahr LLP

The Tax Cuts and Jobs Act introduced a new tax-incentive program known as Qualified Opportunity Zones (QOZs). In 2018, governors of all 50 states, the District of Columbia, and the five U.S. possessions designated more than 8,700 QOZs. The program's benefits include gain deferral and gain elimination for taxpayers who roll over capital gain into a Qualified Opportunity Fund (QOF). 

Specifically, if an investor (1) recognizes capital gain, (2) invests cash in an amount equal to the capital gain in a QOF within 180 days of the date the gain is recognized, and (3) makes an election (on IRS Form 8949) to treat the investment as a QOZ investment, the investor is eligible for the QOZ tax benefits. These benefits include (1) deferral of tax on the rolled-over gain until the earlier of the date the investor sells its interest in the QOF or December 31, 2026, (2) 10% of the investor's roll-over gain is eliminated if on or before December 31, 2026, the investor holds its interest in the QOF for at least five years and another 5% of the roll-over gain is eliminated if the investor holds its interest in the QOF on or before December 31, 2026, for a total of seven years (for a total gain elimination of 15%), and (3) if the investor holds its QOF interest for at least 10 years, the investor will pay no tax on any gain recognized when such QOF interest is sold. There is no tracing of funds to the proceeds of a sale that produces capital gain; the investor may obtain the cash from any source to invest an amount equal to the roll-over gain in a QOF. There are a variety of technical requirements a fund must satisfy to be a QOF. (See below and see our March 1, 2018, e-alert on qualified opportunity zones.)

Investors and promoters of QOFs have been anxiously awaiting guidance from the U.S. Department of the Treasury and the IRS on the issues raised by the statutory language creating this incentive program.  On October 19, 2018, the first set of proposed regulations (Proposed Regulations) and a Revenue Ruling were released providing initial guidance on QOFs. At least two more proposed regulations packages are expected, one this year and one in the spring of 2019. The Proposed Regulations and Revenue Ruling address some of the important uncertainties necessary to implement this program, which is expected to stimulate a great deal of investment. Taxpayers may rely on the Revenue Ruling and taxpayers may rely on the Proposed Regulations—with certain limitations—before they are finalized. 

Initial Guidance

What type of gain may be rolled-over?

The Proposed Regulations clarify that only gain treated as capital gain may be rolled over into a QOF to obtain QOZ benefits. This includes long-term and short-term capital gain from the sale or exchange of a capital asset, gain that is treated as capital gain from the sale of a Section 1231 asset (depreciable property used in a trade or business held for more than one year and real property used in a trade or business held for more than one year other than dealer property, inventory and certain other exceptions), and "unrecaptured section 1250 gain" (the gain on real estate currently subject to tax at a 25% rate). To be eligible for QOZ benefits, cash (not property) in an amount equal to the gain must be contributed to a QOF within 180 days of when the capital gain is recognized. The Proposed Regulations also provide that, subject to certain rules, eligible capital gain will include capital gain a QOF investor recognizes on the sale of a QOF interest on or before December 31, 2026.

What types of taxpayers may roll over cash equal to capital gains they recognize into a QOF?

Individuals, partnerships, corporations (including S corporations, REITs, and RICs), trusts, and estates may roll over gain into a QOF and obtain the tax benefits of investing in a QOF with respect to gains realized on or before December 31, 2026. The Proposed Regulations clarify that either a partnership or its partners may roll over gain realized by the partnership. If the partnership rolls over the gain, the partnership has 180 days from the sale that produces the gain to roll over the gain. If the partnership opts not to roll over the gain, one or more of the partners may roll over their share of the gain. If a partner rolls over gain, the partner's 180-day period starts from the last day of the partnership's tax year or, if the partnership notifies the partners of the date of the sale, at the election of a partner rolling over the gain, the partner's 180-day period may start on the date of the partnership's sale. Similar rules apply to S corporations, trusts and estates, and their shareholders and beneficiaries.

When does the ability of an investor to take advantage of the 10-year benefit expire?

Once a QOF investor has held its QOF interest for at least 10 years, the QOF investor can sell that interest and pay no tax on any gain.  But, to be a QOF, a fund—among other things—must be invested directly or indirectly in a QOZ, and all QOZs expire on December 31, 2028. Therefore, there was concern that a fund no longer could qualify as a QOF when the QOZs expire. The Proposed Regulations solve this problem by providing that a QOF investor pays no tax on the sale of a QOF interest if (1) the QOF investor rolls over capital gain into a QOF in a timely manner, (2) the investor holds its QOF interest for at least 10 years, and (3) the QOF investor disposes of its QOF interest no later than December 31, 2047. 

How does a fund qualify as a QOF?

To be a QOF, an entity must be certified and must satisfy three tests: (1) it is organized as a corporation or partnership (the Organization Test), (2) it is an investment vehicle formed for the purpose of investing in QOZ Property (the Purpose Test), and (3) at least 90% of the entity's assets are invested in QOZ Property (the 90% Asset Test). QOZ Property is (a) an entity interest in a subsidiary partnership or corporation [1] that is a QOZ Business, or (b) QOZ Business Property. For each month that a QOF does not satisfy the 90% Asset Test, it would owe a penalty. The Proposed Regulations provide clarification about the certification process and each of the three elements required to qualify an entity as a QOF. 

FAQs published by the IRS in July 2018 indicated that an entity could self-certify as to QOF status. The Proposed Regulations state that self-certification will be accomplished by filing Form 8996 with the tax return filed for the first taxable year the entity "wants" to be a QOF. A draft of Form 8996 and accompanying instructions were released simultaneously with the Proposed Regulations.

With respect to the requirement that a QOF be organized as a corporation or partnership, the Proposed Regulations state that a QOF must be a corporation or partnership for federal income tax purposes, thus clarifying that an entity formed as a limited liability company under state law but taxed as a partnership for federal income tax purposes is eligible for QOF status. Neither a QOF nor its subsidiary partnership can be a disregarded entity.

The Proposed Regulations place a special limitation on the Organization Test for a QOF formed under the laws of any one of the U.S. possessions (Puerto Rico, U.S. Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Marianas). Those entities may be a QOF only if organized for the purpose of investing in QOZ Property relating to a trade or business operated in that particular possession in which the entity is organized. This requirement is carried over to the definition of what investments in stock or partnership interests will be QOZ Property. A QOF formed under the laws of one of the 50 states or District of Columbia cannot treat as QOZ Property the acquisition of corporate stock or a partnership interest in a corporation or partnership formed under the laws of a possession.  This limitation apparently reflects the IRS interpretation of the definition of "domestic" corporation or partnership for purposes of the Opportunity Zone benefits. The possession limitations are highlighted in the draft instructions to Form 8996.

With respect to the Purpose Test, Form 8996 requires that the entity certify that, by the end of the first tax year of the QOF, its organizing documents include (1) a statement that the entity's purpose is to invest in QOZ property, and (2) a description of the qualified opportunity zone business or businesses in which the QOF expects to directly or indirectly engage.  It is not clear how much detail is required as to the description of businesses in the organizing documents, but the draft Form 8996 seems to expand the statutory requirement.

The Proposed Regulations state that there is no legal barrier to an existing entity filing Form 8996 to become a QOF—as long as the other requirements are met. Thus, an existing partnership or corporation could seek new cash equity infusions that would qualify for QOZ benefits, which likely would require amending the existing entity's organizing documents to substantiate the Purpose Test. This would mean that the existing entity would need to bifurcate the new qualifying investments from any prior investments for purposes of measuring the 90% Asset Test and for purposes of passing on the capital gains relief.

In self-certifying, the QOF also will specify on Form 8996 the first month of the initial year in which it wants to be a QOF. This date will be relevant not only for purposes of determining whether a qualifying investment has been made, but also for purposes of measuring the 90% Asset Test. Failure to identify the first month on Form 8996 will result in the IRS treating the first month of the entity's taxable year as the first month the entity intends to be a QOF.

As to the third requirement, the Initial Guidance describes how to establish the dates for measuring the 90% Asset Test and how QOZ investments are valued. The 90% Asset Test is based on the average of the QOF’s assets on two snapshot dates: the last day of the first six months of a QOF's tax year and the last day of a QOF's tax year. (If a QOF has less than six months in its initial tax year, the only relevant date is the last day of its tax year.) The Proposed Regulations provide that—for purposes of determining if a QOF satisfies the 90% Asset Test—if the QOF prepares financial statements filed with the Securities and Exchange Commission or with a federal agency other than the IRS—or has certified audited financial statements that are prepared in accordance with Generally Accepted Accounting Principles (U.S. GAAP)—then the value of the assets reported on such financial statements are to be used for valuation of the QOF's assets. In other cases, the QOF's cost basis of the assets on the date of acquisition by the QOF is to be used. The Proposed Regulations also include special rules to permit a QOF to use the most favorable valuation method for a subsidiary that is a QOZ Business that is owned by multiple QOFs.

How are the terms QOZ Business Property and QOZ Business defined?

There are different requirements regarding the types of assets a QOF can own and operate directly and the types of assets a QOF's subsidiary can own and operate. The Proposed Regulations provide relatively little guidance on this aspect, reserving these issues for subsequent guidance. As discussed above, to be a QOF, 90% of a fund's assets must be composed of (1) interests in one or more corporate or partnership subsidiaries that qualify as QOZ Businesses and/or (2) QOZ Business Property. For a QOF's subsidiary to be a QOZ Business, substantially all (at least 70%, as defined in the Proposed Regulations) of its tangible property must be QOZ Business Property, it must not be a "sin business" (golf course, country club, massage parlor, hot tub facility, suntan facility, racetrack, or other facility used for gambling, or any store the principal purpose of which is the sale of alcoholic beverages for off-premises consumption), no more than 5% of its assets can be nonqualified financial assets (e.g. cash, stock, bonds, partnership interests, and options etc.), a substantial portion of its intangible assets must be used in the active conduct of its trade or business, and at least 50% of its gross income must be from the active conduct of a trade or business within the QOZ.

QOZ Business Property is property (1) purchased by a QOF or a subsidiary of a QOF (that is a QOZ Business) from an unrelated person (related means more than 20% common ownership) after December 31, 2017, [2] (2)(i) the original use of which in the QOZ commences with the QOF or its subsidiary (that is a QOZ Business) or (ii) the QOF or its subsidiary (that is a QOZ Business) substantially improves such property, and (3) substantially all of the use of such property is in a QOZ during substantially all of the time it is held by the QOF or the QOF's subsidiary (that is a QOZ Business). 

Property is substantially improved if during any 30-month period during which it is owned by a QOF or its subsidiary, the QOF or its subsidiary essentially spends at least as much to improve the property as it spent to buy the property. The Revenue Ruling provides a taxpayer friendly rule applicable to a QOF or subsidiary of a QOF that buys land and improvements—that is for purposes of determining whether such land and improvements are substantially improved, the cost of the land is not included.  For example, if a QOF's subsidiary buys land and a building for $100—$60 of which is allocable to the land and $40 of which is allocable to the building—the subsidiary is only required to spend $40 to satisfy the substantial improvement test. But, the land nevertheless remains in the numerator (assuming it was acquired from an unrelated person after 2017) to determine if substantially all (at least 70%) of the subsidiary's assets are QOZ Business Property. As a result, to determine if at least 70% of the QOF subsidiary's assets are QOZ Business Property in the prior example, the $60 allocable to the land is treated as QOZ Business Property. The Revenue Ruling does not address what constitutes a substantial improvement if the purchased asset is vacant land.

There are advantages and disadvantages if a QOF invests in a QOZ through a subsidiary QOZ Business, as opposed to investing directly. The advantages include that only 70% of the tangible assets of a QOZ Business must be QOZ Business Property, whereas a greater percentage (up to 90%) may be required if the QOF invests directly in QOZ Business Property. Also, a subsidiary QOZ Business can hold more working capital than can a QOF (see below). There also are certain disadvantages if a QOF invests in a QOZ through a subsidiary QOZ Business as opposed to directly. In contrast to a business conducted by a QOF itself, a subsidiary QOZ Business cannot be a sin business, 50% of such subsidiary QOZ Business' gross income must be from the active conduct of a trade or business, a substantial portion of the subsidiary QOZ Business' intangible assets must be used in the active conduct of its trade or business, and less than 5% of its assets can be nonqualified financial assets.

What does "substantially all" mean?

There are a variety of places where the QOZ rules use the term "substantially all." One such place is in one of the requirements that a partnership or corporate subsidiary of a QOF must satisfy to qualify as a QOZ Business—i.e., that "substantially all" of the subsidiary's tangible assets (owned or leased) must be QOZ Business Property. The Proposed Regulations explain that substantially all for this purpose means 70%. The meaning of substantially all for other QOZ purposes remains undefined.

Can a QOF or its subsidiary hold working capital and for how long?

Unfortunately, the Proposed Regulations do not provide that a QOF can hold working capital as part of the assets that meet the 90% Asset Test. However, the Proposed Regulations establish a safe harbor for reasonable amounts of working capital that a QOF's Subsidiary (a QOZ Business) can hold. This safe harbor provides a QOF's subsidiary with greater flexibility to qualify as a QOZ Business as its property or business is being developed. In fact, the Proposed Regulations specify that reasonable working capital may be held by a QOF's subsidiary (a QOZ Business) if (1) the working capital amount is designated in writing for the acquisition, construction and/or substantial improvement of tangible property in a QOZ, (2) there is a written schedule consistent with the ordinary start-up of a trade or business for the expenditure of the working capital, (3) the working capital is spent within 31 months of receipt of such funds, and (4) the working capital actually is used in a manner that is "substantially consistent" with the first three requirements. It is unclear how much specificity must be included on the written schedule as to the actual property or business to be conducted by the QOZ Business.

Likewise, the Proposed Regulations provide that working capital that fits within the safe harbor also counts toward satisfying the 50% gross income test and the intangible property test that the QOZ Business must meet and clarifies that tangible property satisfies the QOZ Business requirements even while working capital is still being expended.

What are other interesting aspects of the Proposed Regulations?

Carried Interest

The Proposed Regulations make clear that an interest in a QOF may include any equity interest in the QOF, including preferred stock and a partnership interest with special allocations. As a result, it appears that if a promoter timely invests an amount equal to all or a portion of capital gain it recognized in a QOF that is a partnership and acquires an interest in the QOF, including its carried interest, its entire interest in the QOF (including the carried interest) may be eligible for QOZ benefits.

Borrowing

The Proposed Regulations make clear that an investor can borrow against its QOF interest without interfering with the investor's QOZ benefits. However, the Proposed Regulations do not address whether a QOF that is a partnership can make debt financed distributions to a partner without the partner recognizing gain. The Proposed Regulations also clarify that debt incurred by a QOF that is a partnership or its subsidiary partnership that is a QOZ Business is not treated as an investment by the QOF's investors for purposes of determining how much capital gain has been rolled over or for purposes of determining if other than capital gains have been invested in the QOF.

Installment Sales

The QOZ law permits a taxpayer to obtain QOZ benefits if the taxpayer rolls over capital gain from a sale of property to an unrelated person and cash equal to the gain is invested in a QOF within 180 days of the sale. The Proposed Regulations explain that the 180 days begins on the day on which the gain would be recognized if the taxpayer did not make an election to defer the gain under the QOZ rules.  This provision in the Proposed Regulations might open the door for a taxpayer who recognizes gain after December 31, 2017, from an installment sale that occurred before 2018 to roll over post-2017 gain from that installment sale into a QOF.

Attributes when roll-over gain is recognized

When all or a portion of the roll-over gain is recognized on the earlier of December 31, 2026, or when the investor disposes of its interest in the QOF, the gain will have the same attributes as the gain rolled over. For example, if the rolled-over gain is short-term capital gain, it will be short-term capital gain when it is recognized and, if all or a portion of the gain rolled over is "unrecaptured section 1250 gain" from the sale of real estate (gain currently subject to tax at a 25% rate), such gain will retain its character as unrecaptured section 1250 gain. The tax rates applicable at the time the roll-over gain ultimately is recognized will apply to that gain, not the rates applicable when such gain was realized and deferred.  This presents additional return risk, as the applicable tax rates may be higher when the gain ultimately is recognized.

Issues not yet answered

Among the issues requiring further guidance:

  • What constitutes the active conduct of a trade or business, particularly in the context of a QOF's subsidiary QOZ Business that owns real estate?
  • What does original use in the QOZ mean?
  • What transactions cause the deferral to end?
  • What are the administrative rules and applicable penalties if a QOF fails to satisfy the 90% Asset Test?

The Proposed Regulations state that soon to be released proposed regulations will provide guidance on how long a QOF has to reinvest proceeds from a sale of one or more of its assets to continue the qualify as a QOF.


 


[1]  For this purpose, we are using the term subsidiary to mean an entity treated as a partnership or corporation in which the QOF has any direct ownership interest.

[2] Property will not qualify as a QOZ Business Property if it is contributed to—as opposed to purchased by—a QOF or a subsidiary of a QOF.

 

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.

© Ballard Spahr LLP | Attorney Advertising

Written by:

Ballard Spahr LLP
Contact
more
less

Ballard Spahr LLP 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.