United States: SALT Outlook, Trends And Predictions For 2014

The "red state" / "blue state" phenomenon that has divided America in recent years and has made federal governance so challenging is dramatically impacting tax policies in the states. The phenomenon, which has polarized activity in the federal government, is particularly evident in a number of border states that have distinct political persuasions,1 and is providing states with at least two distinct paths to addressing their budget and tax issues.2

To explain what is happening in the states, a look at what has been occurring from a federal perspective in the past year may be helpful. The current state of play could best be described as the federal government being trapped in a semi-permanent pattern of reacting to and warding off immediate, damaging fiscal crises without sufficiently planning for the future. There are lingering issues involving the continuing impact of the "government sequester," the "fiscal cliff" and the omnipresent question of when the "debt ceiling" will be reached, at which time the federal government will run out of money to fund operations.3 Despite all these terms of doom, it appears that the federal government always seems to find a way to be able to fund itself and function at some level, notwithstanding the partial government shutdown this past fall, by coming together when an emergency demands, but remaining in a rigid "red" versus "blue" facedown at all other times. In the meantime, truly complex issues, like federal tax reform, are being put off indefinitely, because the divided nature of the federal government is not allowing for a grand compromise to be reached.

How does the federal tax environment implicate what may occur in the near future in the state tax world? In addition to tracking developments that might impact the funding they receive from the federal government, states are continuing to keenly follow the federal tax reform debate, and the status of certain portions of the Internal Revenue Code that annually expire but are then reinstated, sometimes retroactively. With respect to tax reform, the potential for a substantial corporate tax rate cut that maintains the domestic production activities deduction and other tax benefits is out there, but to do this, some tradeoffs of current tax preferences will need to be made in order to maintain revenues. States want to know what tax preferences might be at risk, and what tax preferences will remain, particularly those that may impact the calculation of federal taxable income given the states' use of that amount for purposes of their corporate and personal income tax bases. Not knowing how that debate will play out leads to a level of uncertainty that states must consider in making long-term budget projections.

States also have a significant interest in the expiring provisions in the Internal Revenue Code. In recent years (in part due to the fiscal uncertainty described above caused by the "red" versus "blue" dichotomy), several tax preferences in the Code, including the research and development, new markets and work opportunity tax credits, have expired at the end of a year, but then have been extended for an additional year or two in the following year. In addition to the uncertainty this practice causes taxpayers, states will not know for some time how the adoption or elimination of the extenders will impact their own economies, and their revenues.

Federal bonus depreciation,4 which has been a provision that has been extended for several years, provides a good example. In states which have historically decoupled from federal bonus depreciation efforts, the elimination of bonus depreciation could be viewed as a positive from a compliance perspective, as future federal-state basis adjustments may not be as onerous as in the past, and such states would no longer need to go to the trouble of decoupling their tax code from the federal tax code for that particular issue. In states which have always followed the federal bonus depreciation regime, the elimination of bonus depreciation would be viewed by a state as a positive from a revenue perspective, as depreciation deductions lowering the federal taxable income base would not be as dramatic. Not knowing whether the bonus depreciation provision will be in effect for federal income tax purposes, however, is problematic to states trying to craft budgets on incomplete information.

In addition to these overarching federal concerns resulting largely from the "red" versus "blue" environment, the states themselves are dealing with "red" versus "blue" issues, and the debate is changing the face of state tax policy. With nearly three-quarters of the states now having undivided one-party rule (the governorship and both houses of the state legislature), the shift to one-party control of state government has led to "red" states trying to eliminate or drastically reduce income taxes, with some of the shortfall made up through increases in sales taxes. "Blue" states concentrated on tax reform efforts that would make their tax codes more progressive. As is often the case, however, having one-party control and being able to harness it without going too far beyond the mandate given to them, is much more difficult in practice than it seems in the opening days of an administration or legislative session, even when governors make grand proclamations that major tax reforms can be immediately achieved. Ultimately, no state did away with its income tax, and few states made major strides in the area of tax reform in 2013. The desire to eliminate whole parts of the tax system was particularly unlikely to come to fruition, because while state tax revenues are growing, they are not growing fast enough to cover significant expense items like retirement fund pensions and Medicare. So at least for the moment, it would be hard to see how any state would proceed with the elimination or stark reduction of a major tax component of a state system in a "red" state. By the same token, "blue" states are constrained by resistance to large-scale tax reform efforts that would impose significant shifts in the tax burden.

Given those constraints, and barring any dramatic federal income tax developments over the next several months that would completely change the state budget calculus, we expect overall state tax policy to be driven by the extent of one-party politics currently evident in each state. "Tenuous" one-party states (where the governor and legislature are all from one party, but the state itself is not characterized as a solid "red" or "blue" state) are likely to be limited in the amount of transformative state tax policy that can be undertaken. The same can be said for the relatively few states that are operating under split-party governance in a manner similar to the federal government. Meanwhile, governors and legislatures in solid one-party states may be more inclined to pursue wide-ranging tax reforms.

With that overall background, we present the 2014 SALT Outlook, Trends and Predictions alert, which provides a comparison of what Grant Thornton thought would happen in 2013 to what actually transpired, as well as a fresh set of ten new SALT predictions to watch for the coming year.

2013 Predictions – A Review

  • The time is now . . . Congressional action on SALT legislation.We predicted that at least one piece of SALT-specific legislation that was considered in some form by the previous Congress would be adopted in 2013. However, due to the continuing discord in Congress, very few bills of substance were enacted in 2013, and SALT-specific legislation was no exception. As noted in our Top SALT Stories of 2013 alert, the Marketplace Fairness Act5 passed the Senate and was referred to the House Judiciary Committee, which has not taken additional action to date. While the Mobile Workforce Bill6 continued to show signs of broad bipartisan support and was introduced in both the House and Senate in 2013, the wait for enactment continues.
  • The Multistate Tax Compact election to use an equally-weighted three-factor apportionment formula continues to dominate the realm of corporate income taxation.We predicted that conflicting decisions by the California and Michigan Supreme Courts in Gillette and IBM in 2013 would lead to a U.S. Supreme Court challenge. We would grade this prediction as incomplete, as the California and Michigan high courts have not yet resolved the issue, and so a U.S. Supreme Court challenge has not been commenced. We would posit that the election continues to be the most high-profile issue in corporate income taxation, and as seen in the 2014 predictions, we expect a lot of decisions in the coming year in this area.
  • Bonus depreciation will be utilized as an incentive tool.We predicted that at least one state would adopt changes to current bonus depreciation policies specifically tailored to favor in-state business interests, based on Ohio doing just that in late 2012.7 Ultimately, this prediction did not verify, as states did not utilize incentive programs to provide benefits in the area of bonus depreciation. Given that there does not appear to be broad interest in continuing bonus depreciation into 2014 and beyond, Ohio's action may have been a one-time event.
  • State net operating losses become less useful.We thought that as a way to effectively raise revenue without openly raising taxes, at least two states would enact statutes or provide regulations that would serve to limit or otherwise impair the creation or utilization of net operating losses. This prediction did not verify, as states largely ignored net operating loss provisions in 2013. In fact, Pennsylvania, one of the states that has had a long-standing cap on net operating losses, enacted legislation loosening those caps in future years.8
  • Corporate income tax rates will decline, but will they disappear altogether?We expected that in a year where the existence of the state corporate income tax would be under attack in many jurisdictions, at least three states would lower the corporate income tax rate, but no state actually would act to eliminate the corporate income tax. This prediction verified as North Carolina,9 New Mexico10 and North Dakota11 all reduced their corporate income tax rates, but no state eliminated the tax altogether. In addition, Texas temporarily reduced the tax rate on its revised Texas Franchise Tax imposed on business entities.12
  • As market-based sourcing grows in importance, the benefit-received rule begins to wane.We predicted that at least two states would propose legislation or explanatory regulations that would source revenue from services according to the location where the service is delivered, rather than the location where the benefit of the service is received. This prediction came to pass, as Massachusetts13 and Pennsylvania14 both enacted legislation sourcing sales based on the location where the service is delivered rather than where the benefit of the service is received.
  • Sales tax base broadening efforts will concentrate on the digital economy.We predicted that at least five state tax authorities would provide some guidance addressing how digital products should be taxed that would effectively increase the scope of the sales tax base. We would characterize the amount of guidance ultimately provided by states in this area in 2013 as slim, so this prediction should not be seen as having come true. Of the few state tax authorities that issued regulatory guidance, only the New Jersey Division of Taxation engaged in a broad discussion of how software as a service items should be treated for sales and use tax purposes, generally finding that such items are not taxable.15 More notably, several states enacted provisions generally subjecting more digital goods to the sales tax, including Maine,16 Minnesota17 and Ohio.18
  • "Sin" taxes will increase.We predicted that at least two states would propose legislation that would impose significant increases in "sin" taxes and/or fees. Just taking cigarette taxes into account, this prediction verified, as Minnesota increased the tax on cigarettes during its budget legislation last summer19 and Oregon did the same during a late-season legislative season.20 In addition, Colorado voted via referendum to institute a tax on recently legalized marijuana.21
  • Claiming Chapter 9 bankruptcies will continue to be an option for struggling local jurisdictions. We had envisioned that at least one municipality with a population of at least 100,000 would claim bankruptcy protection under Chapter 9. This prediction verified, as the city of Detroit was placed into bankruptcy late last year following persistent legal challenges.22
  • SALT effect of the debt ceiling and sequestration debates.We expected that at least two states would need to commence special legislative sessions to substantially revisit their budgets due to lingering uncertainty about federal funding for the states. While states held several special legislative sessions, in line with usual practices, the federal funding issue by and large did not become a major, publicized concern for states as some had thought. Arizona, California, Illinois and Washington state all held special sessions in 2013,23 some of which dealt with uncertain aspects of their budgets.

Our 2014 Predictions

1. Continued contrast between the "red" and "blue" states on income tax rates

In light of the disparity between governance in the "red" and "blue" states, the general policy on income tax rates is likely to depend on which political party governs the state. We predict that while most states will keep income tax rates constant this year: (a) at least three "red" states will make broad reductions to corporate or personal income tax rates; and (b) at least three "blue" states will make targeted increases to corporate or personal income tax rates applicable to high-income residents as part of an overall effort to provide tax relief to middle-class residents.

2. The Compact three-factor election: six decisions, and no consensus

The top story in corporation income taxation for the past two years is going to continue dominating the headlines in the coming year. If anything, more states will be weighing in, and soon. The Michigan Supreme Court heard arguments on IBM24 on January 15, and while one can never rely solely on the content of oral argument in gauging how a court will rule, there is a significant possibility that the Compact election may be allowed, at least with respect to the Business Income Tax component of the Michigan Business Tax.25

Rulings from the Texas district court in Graphic Packaging26 are imminent. The Oregon and Minnesota court systems will be considering the issue as well.27 Furthermore, the California Supreme Court is expected to decide Gillette soon.28 We predict that: (a) on the legislative side, four more states will modify or sever their relationship with the Compact; and (b) on the judicial side, the California, Michigan, Minnesota, Oregon and Texas courts will come to vastly different conclusions, creating an inconsistent multistate jurisprudence.

3. Recommendations from Hearing Officer noted, but largely not followed

The Multistate Tax Commission (MTC) has expended considerable time and effort in developing a proposed model that amends key provisions of Article IV of the Compact.29 The MTC's Executive Committee approved the latest version of the model for public hearing in December 2012. Directed by the MTC, Professor Richard Pomp held the public hearing, and after several months of deliberation, issued a report analyzing proposals and making recommendations for amending key provisions of Article IV of the Compact.30 The Hearing Officer's report was a laudable effort to weigh in on the uniformity process, and diverged from the MTC's model in several respects. The MTC is holding a series of hearings in response to the issuance of the Hearing Officer's report over the next several weeks, and the focus will be on whether the MTC ultimately incorporates the Hearing Officer's suggestions. We predict that where the Hearing Officer's report and the MTC's model diverge, the MTC's model will largely stay unchanged, particularly in the areas of: (a) market-based sourcing of services; and (b) alternative apportionment.

4. Continued reliance on incentives to create and maintain jobs

The recent decision by Oregon to "guarantee" single sales factor treatment to large companies located in the state through special legislation31 emphasizes the fact that many states will go to great lengths to retain flagship companies. It is undeniable that states will continue to focus on economic development tools, including direct incentives, to create and maintain jobs. It is clear that states which do not offer these types of direct incentives (and also do not have relatively low business taxes and a stable, strong labor force) will be at a competitive disadvantage. A couple of years ago, tailored relief through legislation became in vogue. Now, the deals are so important that the legislatures are starting to address them outside of regular legislative sessions. We predict that two states will call special sessions to provide targeted tax incentive relief for one or a very small number of businesses in those states.

5. From recommendations to enactment: the DC Tax Revision Commission recommendations

The District of Columbia created the DC Tax Revision Commission in 2011 in an effort to prepare recommendations providing for fairness in apportionment, broadening the tax base, making the District more competitive from a tax standpoint with its jurisdictional neighbors, encouraging job growth and making other improvements to the District's tax system. Last month the Commission issued a number of recommendations, which will soon be presented to Mayor Vincent Gray and the District City Council.32 In the coming months, we will see which of the recommendations, if any, becomes law in 2014. We predict that the City Council will follow several of the material recommendations of the Commission, and act to: (a) implement a single sales factor for purposes of apportionment; (b) impose the $25 per person "head" tax on District employees, with significant exemptions; and (c) increase the sales tax rate from 5.75 percent to 6 percent, with a modest expansion to the sales tax base.

6. Significant change finally comes to New York as well

A couple of years ago, we predicted that despite significant chatter from the New York State Department of Taxation and Finance, substantial tax policy changes would not occur in the state, and that prediction came to pass. Since that time, however, the New York State Tax Relief Commission undertook a study of the current tax system, and recently issued a final report with potentially $2 billion in tax relief. With a relatively popular governor that is encouraging many of these changes (which are endorsed in his recently released budget), the Commission's recommendations will be an integral part of the annual budget negotiations in Albany. Similar to the District of Columbia, the use of a commission will act as a lever of tax reform in New York. We predict that as part of the 2014 budget deal: (a) real property tax increases will be stabilized; and (b) the banking (Article 32) and business (Article 9-A) corporation franchise taxes will be merged at long last.

7. Independent tax tribunals progress

The movement to create independent tax tribunals as a means to resolve tax disputes in an independent forum prior to the judicial process has grown in the last several years. Illinois and Georgia are the most recent states to create and design these systems. Alabama was very close to adopting its own system in 2012, as the independent tax tribunal had substantial support from the state legislature. While not adopted at that time, the bill seems to be well on its way this year, as the state House of Representatives overwhelmingly passed it earlier this month.33 We predict that Alabama and one other state will adopt independent tax tribunals.

8. Individual taxes: residency audits

As baby boomers (and others) head from high-tax states like New York and California to no-tax states like Texas and Florida for retirement, states trying to focus their revenue-generation activities are likely to increase the number and scope of high-net worth residency audits. We predict that at least two high-profile New York or California residency audits in which the resident moved (or purported to move) outside of the state will be published by regulatory agencies or the courts.

9. Efforts to broaden the sales tax base to additional services are not going away

It is a trend that guarantees to become more persistent over time – the sales taxation of services. Beset by revenue stagnation, states have tried to supercharge their sales tax statutes, designed to tax tangible items, by imposing taxes on a wide variety of service-based transactions. While some efforts in this area to tax very narrow industries have succeeded, a few high-profile failures, including Massachusetts' recent attempt to impose a sales tax on computer software services,34 serve as a warning. While embarrassing, we do not expect the Massachusetts experience to keep states from taxing haircuts, warranties, and other sundry types of service transactions. We predict that at least five states will attempt, and at least two states will enact statutes expanding the sales tax base to at least one additional service industry.

10. Nevada initiative to pass a "margin" tax will fail

Last year, the Nevada Supreme Court determined that an initiative to enact a "margin-style" tax, designed as a means to fund education, could be voted on by either the state legislature during the 2013 legislative session or by voters in late 2014.35 The Nevada legislature did not adopt the tax, leaving the option to the voters. Will Nevada go the way of Texas? Voters in the state will need to consider whether their overall business-friendly reputation will be tarnished by the imposition of the margin tax, even if the tax would largely affect multistate businesses that do not have significant presence in the state, and even if the revenues from such tax could markedly reduce stress on the state budget. We predict that in a close vote, Nevadans will reject the creation of the margin tax.


1 An excellent example of the "red state" / "blue state" dichotomy is presented in a recent New York Times article detailing differences between living in current-day Minnesota and Wisconsin. See New York Times, "Twinned Cities Now Following Different Paths," Jan. 13, 2014: http://www.nytimes.com/2014/01/13/us/twinned-cities-now-following-different-paths.html?hp&_r=2

2 Also see Washington Post, "Red, Blue States Move in Opposite Directions in a New Era of Single-Party Control," Dec. 28, 2013: http://www.washingtonpost.com/politics/red-blue-states-move-in-opposite-directions-in-a-new-era-of-single-party-control/2013/12/28/9583d922-673a-11e3-ae56-22de072140a2_story.html?hpid=z1

3 For example, Treasury Secretary Jack Lew recently issued a letter finding that the debt ceiling would be reached in late February, and federal action to raise the debt ceiling would be required to prevent defaulting on obligations. See http://www.treasury.gov/initiatives/Documents/Debt%20Limit%20to%20Congress%201-22-2014.pdf

4 Contained in IRC Section 168(k).

5 S.743, as passed by the Senate on May 6, 2013. Note that this bill was originally introduced as S.336 on Feb. 14, 2013. Also, an identical corresponding bill, H.R. 684, was introduced in the U.S. House of Representatives on Feb. 14, 2013. The Senate's legislation was amended prior to passage.

6 H.R. 1129, introduced March 3, 2013 and currently referred to the House Judiciary Committee, and S. 1645, introduced Nov. 5, 2013 and currently referred to the Senate Committee on Finance. Both bills are also referred to as the "Mobile Workforce State Income Tax Simplification Act of 2013."

7 H.B. 365, Laws 2012.

8 Act 52 (H.B. 465), Laws 2013. The amount of the NOL deduction that may be used in a given year was increased to the greater of $4 million or 25 percent of taxable income for taxable years beginning in 2014 and the greater of $5 million or 30 percent of taxable income for taxable years beginning after December 31, 2014. Previously, the NOL deduction allowance was the greater of $3 million or 20 percent of taxable income.

9 Ch. 316 (H.B. 998), Laws 2013.

10 Ch. 160 (H.B. 641), Laws 2013.

11 S.B. 2156, Laws 2013.

12 H.B. 500, Laws 2013.

13 Ch. 46 (H.B. 3535), Laws 2013.

14 Act 52 (H.B. 465), Laws 2013.

15 TB-72, Sales and Use Tax, Cloud Computing (SaaS, PaaS, IaaS), New Jersey Division of Taxation, Regulatory Services Branch, July 3, 2013.

16 L.D. 1509 (H.P. 1079), Laws 2013.

17 Ch. 143 (H.F. 677), Laws 2013.

18 H.B. 59, Laws 2013.

19 Ch. 143 (H.F. 677), Laws 2013.

20 Ch. 5 (H.B. 3601), 2013 Special Session, Laws 2013.

21 Constitutional Amendment 64, approved by voters Nov. 2013.

22In re: City of Detroit, Michigan, Case No. 13-53846, U.S. Bankruptcy Court, Eastern District of Michigan. See 11 U.S.C. § 901 et seq. Notably, states are precluded from claiming bankruptcy under Chapter 9 or any other provision.

23Both the Arizona and California special sessions held in 2013 focused on health care reform and related budgetary issues, while the Illinois special session dealt mainly with pension reform and the Washington special sessions focused on a number of issues including the budget, according to the National Conference of State Legislatures 2013 Legislative Calendar, which is available at http://www.ncsl.org/research/about-state-legislatures/session-calendar-2013.aspx.

24 International Business Machines Corp. v. Department of Treasury, Michigan Supreme Court, No. 146440, leave to appeal granted, July 3, 2013.

25 In addition, the Michigan Court of Appeals is considering Anheuser-Busch, Inc. v. Michigan Department of Treasury, No. 316743, filed June 12, 2013. In this case, the Michigan Court of Claims held that the three-factor election could be made to apportion the Business Income Tax component of the Michigan Business Tax, but not the Modified Gross Receipts Tax component. Michigan Court of Claims, No. 11-85-MT, June 6, 2013.

26 Graphic Packaging Co. v. Combs, Travis County, Texas District Court, Cause No. D-1-GN-12- 003038. On January 15, 2014, the district court denied the taxpayer's three-factor apportionment election claim by granting the Comptroller's motion for partial summary judgment. However, the taxpayer's other related claims were not dismissed.

27 Health Net Inc. v. Dep't of Revenue, Oregon Tax Court, Case No. 120649D; Kimberly-Clark v. Comm'r, Minnesota Tax Court, No. 08670.

28 Gillette Co. v. Franchise Tax Board, California Supreme Court, No. S206587.

29 Proposed Recommended Amendments Multistate Tax Compact Article IV (UDITPA).

30 Report of the Hearing Officer, Multistate Tax Compact Article IV (UDITPA) Proposed Amendments, Oct. 25, 2013. The report is available at http://www.mtc.gov.

31 H.B. 4200, 2012 1st Special Session, Laws 2012.

32 District of Columbia Tax Revision Commission recommendations, which are available at http://www.dctaxrevisioncommission.org. A final report is expected to be presented to the D.C. Council and Mayor Vincent Gray in January 2014.

33 H.B. 105, passed by House and referred to Senate Jan. 16, 2014.

34 Ch. 95 (HB 3662) was signed in Sep. 2013 and eliminated the sales tax on computer and software services which had been enacted earlier in 2013 when the legislature voted to override the governor's veto of H.B. 3535, the state's transportation financing bill. The bill retroactively repealed the sales and use tax to the date the tax initially took effect, July 31, 2013.

35 The Education Initiative PAC v. Committee to Protect Nevada Jobs, 293 P.3d 874 (Nev. 2013).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Grant Thornton LLP
Grant Thornton LLP
Grant Thornton LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Grant Thornton LLP
Grant Thornton LLP
Grant Thornton LLP
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions