In this Ropes & Gray podcast, Isabelle Farrar, an associate in the tax controversy group, is joined by Elizabeth Smith, counsel in the tax controversy group, and Jennifer Romig, a partner in the health care group, to discuss the state taxation of digital products, an evolving area in several states. Specifically, they will discuss how new technologies are rapidly shifting the delivery of health products and services, and how these new technologies are creating uncertainties in the sales and use tax world.

In this Ropes & Gray podcast, Ellen Gilley, an associate in the tax controversy group, is joined by Kat Gregor, a partner in the tax group and co-founder of the tax controversy group, and Rohan Massey, a partner and co-leader of our data, privacy & cybersecurity group, to discuss the French Digital Services Tax and other developments in the taxation of digital services, with a focus on implications for tech companies serving users in the European Union.

Tax partner and tax controversy group co-founder Kat Gregor, senior tax attorney Ariella Mutchler and tax & benefits associate Ningzhou Shen co-authored an article recently published by Law360 titled “OECD Digital Tax Plan Shifts Tax Risk For Asset Managers.”

The piece examines how the Organisation for Economic Cooperation and Development (OECD)’s digital tax plan shifts tax risk for asset managers. The tax plan, referred to as “pillar one,” creates a new tax right that is majorly dependent on sales, rather than on the physical presence of a business. The OECD tax plan will subsequently impact business across all industries, and specifically those where a bulk of profits come from services that are provided remotely.

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Eleven years after its portfolio company’s bankruptcy triggered a multiemployer pension plan’s demand that funds sponsored by private equity firm Sun Capital Advisors, Inc. (“Sun Capital”) pay the portfolio company’s $4.5 million ERISA withdrawal liability, Sun Capital has won a long-sought victory. On November 22, 2019, a three-judge panel of the First Circuit held that two Sun Capital funds were not required to pay for the withdrawal liability of Scott Brass Inc. (“Scott Brass”). While the decision represents a meaningful victory for Sun Capital, individually, it is unlikely to end attempts by the Pension Benefit Guaranty Corporation (“PBGC”) and multiemployer plans (many of which remain severely underfunded) to seek payment from private equity funds for unpaid pension liabilities of their portfolio companies. Private equity sponsors should continue to focus on potential joint and several liability concerns when structuring investments in companies that participate in defined benefit pension plans.

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On November 4, 2019, the IRS announced that the LB&I division will begin examining 2017 and 2018 tax returns for compliance with the so-called repatriation tax under Internal Revenue Code Section 965. The examinations will target US-based multinational companies.

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On October 9, 2019, IRS released Revenue Ruling 2019-24, 2019-44 IRB, which provides new guidance on the Service’s handling of cryptocurrencies and is the first of such guidance to be released since March 2014 when IRS issued Notice 2014-21. The ruling was issued after prodding from a bipartisan congressional coalition. The ruling, and attached Frequently Asked Questions (“FAQs”), address three issues identified by members of Congress as being in “urgent need” of IRS clarification: (i) provide some clarity as to IRS’ taxation of cryptocurrency forks and detail methods for (ii) calculating and (iii) assigning cost basis.

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In a corporate tax special report by Financier Worldwide Magazine, tax partner and tax controversy group co-founder Kat Gregor and tax controversy associate Ellen Gilley co-authored a piece that discusses international arbitration as a new avenue for challenging tax enforcement.

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On September 11, a Ropes & Gray team secured a significant victory on behalf of Veolia Energy Boston, Inc. in the Supreme Judicial Court of Massachusetts.

Affirming a 2016 decision by the state Appellate Tax Board and denying the Boston Board of Assessors’ appeal, the court ruled that Veolia will be refunded $1.96 million in personal property taxes paid to the city of Boston. The court concluded that Veolia’s system of underground steam pipes was considered machinery and exempt from taxation.

“There is long-standing precedent in Massachusetts supporting manufacturers like Veolia, and we are pleased that the court recognized that in its ruling,” said tax partner Kat Saunders Gregor.

Veolia is represented by a Boston-based team led by Ms. Gregor, litigation associate Erin Macgowan, and tax counsel Elizabeth Smith.

To view the decision, please click here.