U.S. Tax Reform: Impacts and Opportunities for Mexican Businesses, Part 1
A General Overview on Issues That U.S. and Mexican Taxpayers May Need to Address
- The Tax Cuts and Jobs Act (Tax Act), signed into law on Dec. 22, 2017, made significant changes to the manner in which U.S. corporate and individual taxpayers are taxed on income from international operations.
- The Tax Act alters fundamental tax aspects of companies across a variety of sectors having potential implications for both Mexican direct investment into the U.S. and U.S. direct investment into Mexico. Thus, a careful review of many existing corporate structures and financing arrangements is necessary.
- It is important for U.S. and Mexican taxpayers to address any issues and/or look into new opportunities granted by the U.S. tax reform. This client alert summarizes and provides a general overview of the matters presented.
New law H.R. 1 (Public Law No. 115-17), informally known as the Tax Cuts and Jobs Act (Tax Act), signed into law on Dec. 22, 2017, is the most sweeping change to the U.S. tax code in a generation. The Tax Act made significant changes to the manner in which U.S. corporate and individual taxpayers are taxed on income from international operations. The Tax Act incorporates concepts from a variety of prior proposals, including Rep. Dave Camp's (R-Mich.) comprehensive tax reform proposal of 2014 and in the tax reform plan proposed by the House Republicans in 2016, the House Blueprint. It alters fundamental tax aspects of companies across a variety of sectors having potential implications for both Mexican direct investment into the U.S. and U.S. direct investment into Mexico. Thus, a careful review of many existing corporate structures and financing arrangements is necessary.
It is still unknown whether the upcoming administration of Mexico's President-Elect Andrés Manuel López Obrador will adopt a wait-and-see approach with respect to these changes in the United States (U.S.) or affirmatively take measures to increase Mexico's tax appeal toward potential international investors. This will primarily depend on the economic adversities to be faced by its administration. As of now, López Obrador and members of his cabinet have only discussed minor changes to the Mexican tax regime such as the application of a reduced value-added tax rate on areas close to the border with the U.S., the implementation of certain free zones around the country and changes toward providing protection to small- and medium-sized businesses.
Meanwhile, it is of utmost importance for U.S. and Mexican taxpayers to address any issues and/or look into new opportunities granted by the U.S. tax reform.
This client alert does not represent a full analysis of the matters presented and should not be relied upon as legal advice.
A. CFC Regime – U.S. Persons with a Mexican Subsidiary
In general, U.S. shareholders are not taxed on a foreign subsidiary's earnings until such earnings are distributed as a dividend. However, anti-deferral rules, also known as CFC rules, can cause U.S. shareholders of Controlled Foreign Corporations (CFCs) - i.e., subsidiaries owned in more than 50 percent, after applying certain constructive ownership rules, by "U.S. Shareholders" to be taxed currently, even in the absence of an actual distribution, on certain kinds of income classified as "Subpart F income" and on earnings of CFCs derived from investments in U.S. property. This generally translates to potential liquidity issues to a U.S. Shareholder by making him pay taxes on income not yet received (i.e., phantom income).
Until 2017, a U.S. Shareholder was defined as a U.S. person (including U.S. corporations and partnerships) owner of at least 10 percent1 of the voting stock of the foreign corporation. The Tax Act eliminates the voting stock requirement to define such status. A U.S. taxpayer will no longer be able to avoid U.S. Shareholder status (or prevent a foreign corporation from becoming a CFC) by holding only nonvoting stock. Now, any 10 percent U.S. Shareholder of a CFC will be taxed currently on its Subpart F income.
Subpart F income includes generally passive income (e.g., interests, dividends, rents, royalties, capital gains), gains from property producing the preceding types of income, certain gains of nonmanufactured personal property acquired from, or sold, to a related party and certain services performed outside of the country of organization of the CFC for, or on behalf of, a related party and certain income from services performed outside of the country of organization of the CFC for, or on behalf of, a related party.2
In addition, no item of income that would otherwise be Subpart F income, should be included as such if the income is subject to an effective foreign income tax rate of greater than 90 percent of the U.S. corporate tax rate (21 percent as of 2018).
This "high-tax exemption" would generally allow a U.S. Shareholder to avoid Subpart F treatment for an item of income earned through a Mexican CFC that is taxed at a sufficiently high rate relative to the one it would have been taxed had it been earned directly by a corporate U.S. Shareholder. However, if the Mexican CFC has investments in U.S. property, the applicability of exemption may be compromised.
B. GILTI – U.S. Shareholders with "intangibles" in Mexico
In addition to Subpart F income, the Tax Act adopted a new tax applicable to U.S. Shareholders on global intangible low-taxed income (GILTI) of a CFC.
Starting this year, a 10 percent U.S. shareholder (individual or entity) of a CFC, is required to include in income on a currently basis, as a deemed dividend, the GILTI of the CFC even if the CFC does not make any cash distributions. Such as in the case of Subpart F income, deferral of U.S. taxation over so-called foreign "intangible" income is therefore eliminated.
A 10 percent U.S. Shareholder corporation will be entitled to claim with respect to such GILTI income inclusion a deduction of 50 percent. For domestic corporations, the GILTI will be taxed at an effective rate of 10.5 percent (50 percent of 21 percent). U.S. individuals, however, are not entitled to apply this deduction. They will be obliged to recognize such income and pay the GILTI tax at their corresponding tax rates as ordinary income, potentially causing substantial amounts of phantom income to them. Yet, an individual U.S. Shareholder may claim an indirect tax credit for foreign taxes the CFC paid by electing to be taxed at corporate income tax rates on Subpart F and GILTI income only (i.e., 962 election).
Despite the above, it may continue to be advantageous for U.S. corporate shareholders to hold intangible assets in low-tax and foreign jurisdictions. Income deemed attributable to "intangible" assets held by U.S. corporations abroad will be taxed at an effective rate of 10.5 percent, whereas income from the exploitation of those assets within the U.S. could be subject to 21 percent.
Generally, GILTI will apply irrespective of whether the subsidiary is located in a low-tax country and will not only be applicable to intangible income as it is commonly understood.
GILTI will generally be equal to the "Net Tested Income" of the CFC in excess of a 10 percent of the quarterly average tax basis in depreciable tangible property used in the corporation's trade or business.
Net Tested Income is the aggregate net income of the CFC excluding: 1) income that is effectively connected with a U.S. trade or business, 2) Subpart F income, 3) income excluded from being classified as Subpart F income because it is subject to an effective income tax rate greater than 90 percent of the maximum U.S. corporate income tax rate (i.e., good income), 4) dividends from related persons and 5) oil and gas extraction income.
Under the above, if the income generated in Mexico was good income not at first subject to the Subpart F provisions, the Mexican CFC's income should generally expose the U.S. shareholder to GILTI (except to the extent of 10 percent basis in depreciable tangible property).
Subject to certain limitations, 10 percent U.S. corporate shareholders will also be entitled to a foreign tax credit for 80 percent of the taxes paid by their Mexican CFCs attributable to the GILTI amount.3 GILTI tax credits are isolated into their own foreign tax credit basket with no carryforward or carryback available for any excess credits. An individual U.S. Shareholder will not be entitled to such a credit absent a 962 election.4 The benefits and downsides of a 962 election should be analyzed by individuals.
GILTI could potentially increase the appeal of structuring any purchases of Mexican targets as asset sales, as opposed to stock sales, for U.S. tax purposes. Given that the GILTI inclusion will be basically calculated on all intangible income exceeding a deemed 10 percent return on depreciation of fixed assets, a U.S. purchaser may find it advantageous to treat a stock sale as an acquisition of the underlying assets of the Mexican target for U.S. tax purposes, which may increase the GILTI-free 10 percent deemed return of fixed assets. However, a U.S. seller may object to such an election, as the deemed sale of assets by the Mexican target should give rise to additional GILTI and/or Subpart F inclusions.
C. BEAT – Payments to Mexican-Related Parties
In general terms, the Base Erosion and Anti-Abuse Tax (BEAT) limits the ability of highly profitable U.S. corporations5 to deduct "base erosion payments" to related foreign parties.
The BEAT must be computed and compared to the taxpayer's regular income tax liability for the taxable year. If the BEAT is higher, the taxpayer pays the additional tax computed under BEAT. This resembles an alternative minimum tax, but one targeted to corporations with "base erosion payments."
The BEAT will be equal to applying a 5 percent rate in 2018, and a 10 percent rate as of 2019, over a modified tax base called "Modified Taxable Income."
Modified Taxable Income is generally equal to the corporation's taxable income calculated without regard to its base erosion payments and without regard to a portion of its net operating losses. The base erosion payments include deductible amounts, such as interests and royalties paid or accrued by a taxpayer to a related foreign person and any amount paid to a related foreign person in connection with the acquisition of depreciable property.
Base erosion payments may be taken into account in Modified Taxable Income to the extent the payments to a foreign related person are subject to a full 30 percent U.S. withholding tax. This rule applies proportionately considering the potential reduced U.S. withholding tax rates under a tax treaty. For example, if under the U.S.-Mexico Income Tax Treaty the withholding tax rate on royalty payments is 10 percent, only 66.7 percent (10/30 - 1) of those payments may be taken into account in Modified Taxable Income.
No certainty exists as to what amounts will be considered as payments of BEAT and what amounts will be considered a payment of income tax. That is to say, if the BEAT is higher, is the total amount of the tax paid to be considered BEAT? Or only the amount that exceeds the regular tax liability of the taxpayer? This will gain importance when the creditability of the BEAT in Mexico is being determined, since it is not totally clear that the BEAT will be eligible to be offset as a foreign tax credit against a taxpayer's income tax in Mexico.
The BEAT tax could also apply to Mexican corporations to the extent they derive trade or business income in the U.S., including real property income in the U.S.
Base erosion payments generally do not include payments for cost of goods sold, unless made to a member of a foreign parented group with a U.S. subsidiary that is treated as "inverted" under preexisting U.S. anti-inversion rules. Therefore, the purchase of goods or services from a related foreign subsidiary will not be deductions added back to the Modified Taxable Income to calculate the BEAT if those can be categorized as cost of goods sold.
Hence, a U.S. corporation currently making royalty payments to a Mexican affiliate to use the intellectual property to produce the item in the U.S., could benefit by restructuring its business by transferring the production process to Mexico. The intellectual property will remain in Mexico and the U.S. corporation could make deductible cost of goods payments to the Mexican affiliate instead.
The BEAT has been criticized for going against the nondiscrimination principle under article 25 of the U.S.-Mexico Income Tax Treaty because the deductions of payments to foreign corporations and to U.S. domestic corporations are not be subject to the same conditions.
D. Foreign Derived Intangible Income – Having a U.S. Export Hub
Under the Tax Act, a new deduction is allowed to U.S. corporations against Foreign Derived Intangible Income (FDII), i.e., income derived from sales of products, licensing or leasing of property, or provision of services for "foreign use." This potentially converts the U.S. into an exportation hub by providing an incentive for U.S. corporations to sell goods and provide services abroad.
The effective U.S. tax rate on FDII will be 13.125 percent 6 (16.4 percent after 2025) as opposed to the regular 21 percent corporate rate applicable to other income derived by U.S. corporations.
In general, a U.S. corporation's FDII is the excess of a U.S. corporation's gross income over 10 percent of its average quarterly basis in U.S. depreciable business assets, that is attributable to "foreign derived" income, without regard to Subpart F income, GILTI, foreign branch income, dividends from foreign subsidiaries, certain financial services income and certain oil and gas income.7
Income from the sale, lease or license of property is considered "foreign derived" if provided to non-U.S. persons for use outside of the U.S. Income from the provision of services is considered "foreign derived" if provided to U.S. or non-U.S. persons located outside of the U.S. Property sold, leased or licensed to an unrelated person is not treated as "foreign derived" if it is further manufactured or modified within the U.S. In case of related parties, income from property is "foreign derived" if the related foreign person sells, leases or licenses the property in turn to an unrelated foreign person for use outside of the U.S., or if the related foreign person uses the property outside the U.S. in connection with the provision of services or property sold, leased or licensed to a nonrelated foreign person. Services provided to related parties may also be established as "foreign derived" if it is established that the related party does not provide similar services to persons located within the U.S.
Based on the foregoing, it is likely that U.S. corporations may reduce or eliminate some of their operations in Mexico and transfer them back to the U.S., and for Mexican corporations to consider transferring certain operations to U.S. corporations. Yet, considering the lower cost of labor in Mexico, the costs and benefits of such transfers of operations should be carefully reviewed.
E. Transition Tax on Accumulated Offshore Earnings – Case of Mexicans with Green Card or U.S. Passport
The Tax Act imposes a mandatory one-time tax to U.S. Shareholders (which includes corporations, partnerships, trusts, estates and U.S. individuals) of certain "Specified Foreign Corporations" on the post-1986 accumulated and tax deferred offshore earnings and profits of such Specified Foreign Corporations.
Specified Foreign Corporations include corporations that are CFCs or foreign corporations that have a 10 percent U.S. shareholder that is a U.S. corporation. The U.S. Shareholders subject to the tax are U.S. persons that owned 10 percent of the voting power of the Specified Foreign Corporation, regardless of whether such corporation is incorporated in a low-tax jurisdiction. Earnings and profits that were previously subject to income tax in the U.S. are not subject to the transition tax.
The U.S. Shareholders will be taxed at different rates depending on whether the U.S. Shareholder is an individual or a corporation, and whether the foreign earnings are viewed as invested in cash or noncash positions.
If the U.S. Shareholder is a U.S. corporation, the earnings treated as invested in cash positions are taxed at an effective rate of 15.5 percent and the residual amounts are taxed at a rate of 8 percent. A "cash position" is defined to include cash, net accounts receivable and the fair market value of similarly liquid assets (e.g., publicly traded stock).
If the foreign stock is owned by an individual shareholder, the cash amounts will be subject to rates up to 17.5 percent and the residual amounts up to 9 percent if recognized in the 2017 tax year, and an increased rates of 27.3 percent and 14.1 percent, respectively, if recognized in the 2018 tax year.8
In this regard, it is of utmost importance to realize that individual shareholders include not only U.S. resident aliens but also foreign tax residents that are U.S. citizens and green card holders. Hence, if an individual is resident in Mexico and has a green card or is a U.S. citizen and is a 10 percent owner of a non-U.S. corporation, he may be subject to this Transition Tax on any earnings not previously taxed in the U.S., that accumulated after 1986 while the foreign corporation was a Specified Foreign Corporation. This liability could arise even if the individual has never step foot in the U.S.
The tax liability can be paid over a period of up to eight years in installments (with the installment payments starting at 5 percent of the tax liability in year one, and 25 percent in year eight) with no interest, subject to acceleration for any deficiency assessment for failure to pay a prior installment, liquidation of the taxpayer, a sale of substantially all of its assets, a cessation of business or any similar event. An indirect foreign tax credit is allowed to U.S. corporations on Mexican taxes paid on the taxable portion of the underlying earnings, but with such "taxable portion" determined according to 2017 corporate rates regardless of what rates are applicable to the US taxpayer on such income.9
The Transition Tax serves the same purpose of a repatriation program, though a mandatory one, just like the one implemented in Mexico in 2017. Under the Tax Act, however, there is no mandatory requirement to actually return or reinvest such earnings to, or in, the U.S.
The tax described herein applies despite the participation exemption available with respect to corporations.
F. Creditability in Mexico of GILTI, BEAT, FDII and the Transition Tax
Double taxation problems could arise when taxes fall outside the bilateral tax treaties' scope, or from the definition, of a foreign income tax under the domestic tax laws of the recipient countries.
The present analysis is made assuming an organizational structure in which a Mexican corporation shareholder is receiving dividends from a more than 10 percent owned U.S. subsidiary that have paid U.S. taxes under the new GILTI, BEAT, FDII or Transition Tax regimes. No comments are made regarding the rules that would apply to foreign tax credits in Mexico for income derived from low-tax or preferential tax regimes.
In Mexico, a foreign income tax should be creditable so long as, among other requirements, 1) the foreign income tax has been effectively paid and was not applied over Mexican source income, 2) the foreign earned income would otherwise have been subject to tax in Mexico, 3) its payment derived from a generally applicable provision and was not a payment in consideration of a direct received benefit, and 4) have income as its tax base allowing subtractions similar to those applicable in Mexico or a tax base substantially similar to that applicable under the Mexican Income Tax Law.
Although not free of doubts the GILTI tax should be creditable as an income tax in Mexico under the previous requisites. The BEAT case is similar to the previous alternative minimum tax, which was normally eligible to credit in Mexico. It is a tax on income, though one calculated over a modified tax base. The Modified Adjustable Income, does take into account certain deductions (e.g., cost of goods sold except in the foreign parented "inverted" group context) and thus the "net" requirement may be deemed as fulfilled. On the other hand, the FDII is simply a reduction of the U.S. income tax base. It is not an additional tax. Thus, any U.S. tax paid over FDII should be creditable as a tax on income that would have been otherwise taxable in Mexico. Lastly, the Transition Tax is not a tax that would otherwise be subject to tax in Mexico and hence must likely will not be considered as a tax eligible to be offset against one's Mexican income tax liability.
Despite of the above, good credit grounds could derive from article 24 of the U.S.-Mexico Income Tax Treaty. It states that all federal income taxes imposed by the Internal Revenue Code shall be treated as income taxes.
G. New U.S. Corporate Tax Rate – Effects on Mexican Anti-Deferral Regime
The Tax Act sets the corporate tax rate at a flat 21 percent beginning in 2018. This cut brings the U.S. tax rate down below the Organization for Economic Cooperation and Development (OECD) average of 25 percent. The 21 percent rate may be low enough to define the U.S. as a tax haven from a Mexican tax perspective. If so, it could trigger the application of anti-deferral rules that could hinge on the time and effective tax rate to which a Mexican person will ultimately be subject to in cases where it holds an interest in a U.S. entity.
Under the Mexican Income Tax Law, Mexican tax residents are subject to special anti-deferral tax rules, similar to the CFC U.S. regime, when 1) income generated through entities or foreign legal figures,10 either directly or indirectly, is subject to a Preferential Tax Regime (PTR), in the proportion of their participation in such legal entities or figures, or 2) income is obtained through foreign entities or legal figures which are fiscally transparent.
In both cases, income obtained should be recognized in the fiscal year in which it is generated, even though such income has not yet been distributed to the Mexican tax resident.
Income is deemed to be subject to a PTR whenever it is not taxed abroad, or income is taxed at a rate below 75 percent of the income tax that would have been triggered and paid in Mexico (i.e., 22.5 percent for legal entities and 26.25 percent for individuals).
In order for Mexican tax residents to determine whether or not their foreign generated income is subject to this special tax regime, they must compare the effective income tax triggered and paid abroad for such revenues (if any), toward the income tax that hypothetically would have been triggered and paid in Mexico for the same income (if any).
Income generated by Mexican tax resident corporations or individuals through a U.S. subsidiary or a transparent entity will not automatically be deemed as subject to a PTR. This should be analyzed on a case-by-case basis.
Under certain exemptions the Mexican anti-deferral regime is not applicable. For instance, income generated from business activities or income obtained through foreign legal entities or figures where the Mexican taxpayer does not have effective control, will, generally, not be considered as subject to PTR.
In addition to the applicable exemptions under Mexican tax law, other elements such as U.S. state income taxes, hovering around zero percent and 9 percent. For example, U.S. relevant state local income taxes paid by a U.S. subsidiary may be factored in in order to determine whether the effective income tax triggered and paid in the U.S. is below the 22.5 percent Mexican threshold for legal entities.
Similarly, other new provisions in the Tax Act under which the application of the Mexican anti-deferral rules could easily be triggered are the new rules allowing for an immediate full depreciation deduction and the new GILTI and FDII effective tax rates of 10.5 percent and 13.125 percent, respectively.
Being ultimately subject to a PTR is also relevant because aside from the consequences set forth above, Mexican taxpayers with income subject to a PTR must file every February a quite burdensome information return before the Mexican tax authorities. If this information return is not filed within the three months following the deadline (even if the income tax has been paid) a tax crime may be considered to exist.
H. Dividends Participation Exemption – U.S. Corporations with Mexican Subsidiaries
The Tax Act shifts from a worldwide system to a quasi-territorial system by the creation of a dividends exemption whereby income earned by foreign subsidiaries of U.S. parent corporations not previously subject to U.S. tax may be eligible for a 100 percent "dividends received deduction" when distributed to the U.S. This will incentivize U.S. parent entities to repatriate their foreign earnings. This means that foreign dividends (up to an amount of undistributed earnings and profits) received by a U.S. corporation from CFCs or 10 percent owned foreign subsidiaries may be subject to no further taxation in the U.S. when distributed.11
However, because of Subpart F and GILTI inclusions, most categories of income earned by such subsidiaries will have already been subject to U.S. tax prior to the time of distribution.
As previously taxed earnings and profits of CFCs could already be distributed tax free, the dividends received deduction will generally only benefit U.S. corporations receiving distributions from non-CFCs or on earnings attributable to income that was not subject to a Subpart F or GILTI inclusion.
To be eligible for the exemption, 10 percent of stock in the foreign corporation must be held for a specific period of time prior to the date the entitlement to the dividend became fixed.
In addition, no exemption is allowed for "hybrid dividends" (e.g., instruments treated as stock for U.S. purposes but debt for non-U.S. purposes giving rise to deductible interest). Relief may also be unavailable for "nimble dividends" out of positive current year earnings not in excess of an accumulated earnings deficit, as the exemption measures earnings as of the close of the taxable year.
Under the above, earnings of a Mexican subsidiary will either be 1) taxed currently to the U.S. shareholder under a modified Subpart F regime or GILTI, or 2) exempt from U.S. tax when earned, but in each case not subject to U.S. tax upon actual dividend repatriations.
No foreign tax credit or deduction will be allowed for any Mexican income taxes, including withholding taxes, paid with respect to the portion of a dividend that will not be taxed under the dividend received deduction in the U.S.
Therefore, dividend distributions made from a more than 10 percent owned Mexican subsidiary to a U.S. corporate shareholder will generally be subject in Mexico to a domestic 10 percent withholding tax rate (or to zero percent or a reduced tax treaty rate, if applicable) but should not trigger additional tax upon receipt in the U.S. Since no foreign tax credit of the same will be available in the U.S., the U.S. corporate shareholder will have to assume that 10 percent withholding in Mexico as an additional tax cost, if the U.S.-Mexico Income Tax Treaty brings no relief.
I. Foreign Tax Credits in the U.S.
As a consequence of the implementation of the new dividend received deduction, the indirect tax credit12 available to U.S. corporations was generally repealed. Accordingly, under the Tax Act, foreign tax credits are generally only available to the extent foreign taxes are imposed on Subpart F income or GILTI (subject to a special basket and no carryover rule).
A U.S. corporation owner of a Mexican subsidiary will no longer be able to credit the income taxes effectively paid in Mexico by such subsidiary over income, other than Subpart F income or GILTI, earned in Mexico upon its distribution. They will generally represent an additional cost in its multinational operations.
Clients needing further explanation and information on the Tax Act's impact on business in Mexico can contact the author.
1 Certain constructive ownership rules apply.
2 Exceptions apply to exclude from Subpart F income: passive type income received from related CFCs paid out of non-Subpart F income, rents and royalties for the use of property in the country of organization paid out of non-Subpart F income, rents and royalties from an active leasing or licensing business, and income from an active financing business.
3 The amount of the creditable foreign taxes will be treated as a dividend distributed by the CFC to the U.S. corporation.
4 Holding the foreign business through an entity treated as a partnership would allow for certain U.S. tax benefits. Among others, a tax credit for any non-U.S. taxes paid by the business.
5 The BEAT applies to U.S. corporations with an average annual gross income of $500 million or more in the prior three years and have base erosion payments of at least 3 percent of generally such corporation's current year operating deductions. Because non-U.S. activity by non-U.S. entities are removed from the computation, large multinational corporations with smaller U.S. businesses will likely be exempt from the tax.
6 U.S. corporations will be allowed a deduction of 37.5 percent of FDII under the Tax Act.
7 The exact mechanics involve first looking to the residual amount of gross income not falling into the excluded categories that is in excess of the 10 percent return on tangible property basis. The proportion of that amount that bears the same ratio to the amount of gross income not in excluded categories that is "foreign derived" is the FDII for the deduction.
8 See IRS Publication 5292, Worksheet 1.1.
9 This results in a greater disallowance of foreign tax credits, as the 15.5 percent and 8 percent rates are a smaller proportion of the 2017 35 percent maximum corporate rate.
10 For this purpose, "figures" are considered to be foreign trusts, associations, investment funds and any other similar legal figure formed under foreign law without having own legal personality.
11 A domestic corporation will generally need a one-year holding period in order to claim this dividend received deduction.
12 An indirect tax credit is a tax credit for the foreign taxes on the income earned by a foreign subsidiary out of which the dividend distribution was made.
Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.