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First Quarter Newsletter 2020

President Trump previously issued an emergency declaration “to provide relief from tax deadlines” in response to the Coronavirus Disease 2019 (COVID-19) pandemic, but without any details. Today the Treasury Department released the details in Treasury Notice 2020-17. The notice can be found here. Details are:

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Update: On Wednesday, March 18, the Senate voted (90-8) to approve the Families First Coronavirus Response Act without amendment, and the President signed it into law. Congress and the administration are now referring to the Act as “Phase 2” of its response to the coronavirus emergency. “Phase 1” included $8.3 billion of appropriations toward vaccine development and prevention efforts. Today, the Treasury released its framework for “Phase 3.” The current proposal for Phase 3 would deal with, among other things, direct payments to individual taxpayers, the creation of a small business interruption loan program, and appropriations toward the airline industry and other distressed sectors. Treasury’s Phase 3 framework can be found here. The Senate is expected to begin negotiations on Phase 3 immediately. Ropes & Gray will track these developments and provide additional alerts as information becomes available.

Introduction

On Friday night, March 13, 2020, the House of Representatives passed the Families First Coronavirus Response Act (the “Original Bill”) to bolster the federal government’s response to the coronavirus outbreak and address the severe impact of the coronavirus on Americans’ personal safety and financial security. On Monday evening, March 16, the House passed by unanimous consent a revised version of the bill (the “Revised Bill”).


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***This legal development is still in progress. We will update this Alert as the Act makes its way through the legislative process.***

Introduction

On Friday night, March 13, 2020, the House of Representatives passed the Families First Coronavirus Response Act to bolster the federal government’s response to the coronavirus outbreak and address the severe impact of the coronavirus on Americans’ personal safety and financial security.

The bill, which is currently expected to pass the Senate and to be signed by President Trump this week, affects most private employers with fewer than 500 employees and is aimed at mitigating the impact of the coronavirus by providing financial support to those affected by the virus and the efforts to contain the virus’s spread. The new legislation guarantees free coronavirus testing, provides paid emergency leave, enhances the federal unemployment insurance assistance available to states, strengthens food security initiatives, and increases federal Medicaid funding to states. Critically to the employers covered by the law, the leave provisions expand protections under the federal Family and Medical Leave Act and provide for paid sick leave, which in combination will provide paid leave to employees who, among other things, are quarantined per a recommendation of a public official or health professional, who are caring for family members who are quarantined, or who have children that are unable to attend school or day care.


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A year or so ago, I recorded a short video about how tax is becoming an area of focus for investors which support an ESG (environmental, social and governance) agenda. I concluded that there was an opportunity for fund managers to attract investors by embracing this agenda.

Investors now frequently ask fund managers to align themselves with a particular set of principles, such as the tax code of conduct recently adopted by a group of Danish institutional investors. However, it is important for managers to look carefully at what they might be committing themselves to. The Danish code, for example, includes specific prohibition on certain investments in companies on the EU blacklist of non-cooperative jurisdictions, which has recently expanded to include the Cayman Islands.


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In a recent Law360 article, tax controversy counsel Elizabeth Smith, health care partner Jennifer Romig, health care associate Whitney Wadman and tax and benefits law clerk Jenna Grove examine how digital health companies can diagnose sales tax rules.

As digital health technologies and sales tax regimes evolve, digital health companies must evaluate their sales tax

On February 26, 2020, the United States Supreme Court issued a decision in the closely watched Intel Corp. Investment Policy Committee et al. v. Sulyma case, making it more difficult for employers to seek early dismissal of class actions brought by participants in their retirement plans by narrowing the circumstances where a shorter three-year statute