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News / Updates

Trump’s Tax Policy

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Trump’s Tax Policy

The 58th U.S. presidential election of 2016 is over. The Republican Party nominee, Donald Trump, defeated the Democratic Party nominee, Hillary Clinton. Trump is expected to take office as the 45th President on January 20, 2017 and he promises to ‘Make America Great Again!’

With Republicans’ domination over the House and Senate, we can expect many of Trump’s tax policy will have big impact to our lives shortly after his administration takes off. Here are some major tax reform Trump promised during his presidential campaign:

Corporate Tax Rate Reduction to 15% - the United States has the third highest general top marginal corporate income tax rate in the world at 39.1 percent (consisting of the 35% federal rate and a combined state rate). Trump vowed to introduced a single corporate federal tax rate of 15% to all businesses in an effort to put more money into the hands of businesses to create more jobs and investments in the U.S., which would allow U.S. businesses to be more competitive in international market.

Repatriation Holiday - under present law, the U.S. tax on foreign earnings of foreign corporate subsidiaries is deferred until it is distributed back to the U.S. shareholders, generally. The government estimates as of 2015, approximately $2.6 trillion of earnings of foreign corporate subsidiaries has not been taxed and is undistributed. Trump plans to introduce a special corporate tax repatriation holiday rate whereby corporations with money stashed overseas would be able to pay a tax rate of 10% on that income in order to bring the money back into the U.S. The repatriated cash would then be reinvested in the U.S. creating jobs and expansion of U.S. businesses.

Pro-U.S. manufacturing – Trump plans to allow firms engaged in manufacturing in U.S. to elect to expense capital investment in lieu of taking deduction for interest expense. Additionally, Trump promised to increase cap on business tax credit for on-site childcare and allow businesses that pay a portion of employee childcare expenses to exclude those contributions from income.

Individual Tax Rate – currently, individuals are subject to top marginal tax rate of 39.6% plus 3.8% of net investment income tax. Trump plans cutting the current seven brackets down to three: with 12%,25%, and 33% rates, and would repeal the net investment income tax. Additionally, he plans to eliminate AMT tax regime.

Elimination of Estate Tax – currently, the U.S. government charges death tax or estate tax of 40% on estate with value in excess of $5.45 million. Trump’s tax reform would eliminate death tax. Rather, the beneficiaries of an estate take the assets with a tax-free, with no “stepped-up” basis. For rich, best time to die is during Trump’s presidency for estate tax planning purposes.

Obamacare – Trump believes the Affordable Care Act, also known as “Obamacare,” is a total “disaster” and has failed on cost and quality of health care. He proposed to repeal and replace Obamacare with “something absolutely much less expensive.” During his campaign, Trump proposed a series of measures that would allow people to buy affordable health insurance policies outside of the Obamacare exchanges. These measures include promoting tax-free health savings accounts, high-deductible health plans and health savings accounts, and boost competition in health insurance market by allowing insurers to sell policies across state lines.

News / Updates

Unilateral APA Application by Maquiladoras

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Unilateral APA Application by Maquiladoras

The IRS announced in IR-2016-133 that US taxpayers with maquiladora operations in Mexico will not be exposed to double taxation if they enter into a unilateral advance pricing agreement (APA) with SAT through a “Fast Track” program introduced by SAT in October 2016.

Currently, the SAT has over 700 pending unilateral APA applications filed by maquiladoras covering tax years 2014 through 2018. The IRS and SAT entered into an agreement adopting the Fast Track program to timely address the current inventory of pending APA applications.

The new maquiladora framework is an election that SAT would offer to qualifying taxpayers with pending unilateral APA requests with the SAT. The program excludes (1) maquiladoras with annual revenue in excess of 1.2 billion pesos and (2) maquiladoras with a principal company located outside of the United States. The program offers the following options:

  • Qualifying taxpayers may elect to apply the new maquiladora framework in a unilateral APA with the SAT. Because the transfer pricing framework adopted under SAT’s program was discussed and agreed upon with the U.S. competent authority in advance, the transfer pricing results set forth in unilateral APAs executed between SAT and the maquiladora will be regarded as arm’s-length for US tax purpose.
  • Qualifying taxpayers that decline to elect to apply the new maquiladora framework may either:
    • Continue applying for a unilateral APA using traditional approach.
    • Use safe harbors provided in the 1999 agreement; or
    • File a request for a bilateral APA with the US and Mexican competent authorities.

It is expected that qualifying taxpayers with pending unilateral APA with the SAT will receive an election notice shortly (Unofficial source indicates that the SAT will contact the current APA representative or consultant first). The notice will include details on the steps the taxpayer must take regarding its pending unilateral APA request. Qualifying taxpayers should contact their APA representatives for further detail.

https://www.irs.gov/pub/irs-news/ir-16-133.pdf?_ga=1.134315953.1959233956.1449872249

 

News / Updates

IRC Section 385 Final Regulations

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IRC Section 385 Final Regulations

On October 13, 2016, IRS issued final and temporary regulations under 385 addressing the treatment of related party debt.  The final and temporary regulations treat as stock certain related-party interests that otherwise would be treated as indebtedness (the “Request Rule”) for federal tax purposes and established extensive contemptuous documentation requirement (the “Documentation Rule”) with respect to related-party indebtedness.  The Request Rule is effected April 4, 2016 and the Documentation Rule applies to debt instruments issued on or after January 1, 2018.  See our newsletter at http://www.kyjcpa.com/news-updates/proposed-section-385-regulations/ for general overview of the regulations.

The final and temporary regulations retain much of what was previously proposed back in April but reflects certain modifications summarized below:

  • The final and temporary regulations apply to US indebtedness only. Initially, the regulations were drafted to be applied to all related-party debt instruments (both in-bound and out-bound), but the regulations were finalized to excludes foreign debts.
  • The final and temporary regulations eliminated bifurcation rule included in the proposal. Initially, the regulations were drafted to permit the IRS to characterize certain instruments as part debt and part stock, but this bifurcation rule was excluded from the final and temporary regulations.
  • The final and temporary regulations apply to disregarded entities and partnerships having interest in US corporations with related-party debt instruments.
  • The Documentation Rule applies to instruments issued on or after January 1, 2018 and is considered contemporary if completed by the due date of the return (including extension).

Note that the Documentation Rule apply to debt instruments issued by the expanded group with (1) publicly traded stocks, (2) total assets exceeding $100 million, or (3) total revenue exceeding $50 million.  Additionally, a related-party debt instrument will not be treated as stock if, when the debt is issued, the aggregate issue price of all other related-party debt instruments that would be treated as stock does not exceed $50 million.

 

News / Updates

CbC Reporting Final Regulation

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CbC Reporting Final Regulation

IRS issued final regulation related to new country-by-country reporting requirements for ultimate parent entity of a multinational enterprise group (MNE) with revenue of $850M or more.  This new filing is required for tax years beginning on or after June 30, 2016.  So a calendar year taxpayer would be subject to the filing requirement (Form 8975 – the form is still under development)  with its 2017 tax return.  This new reporting requirement was implemented to confirm with the rules of the OECD’s action plan on BEPS.

An UME of a US MNE group is defined as a US business entity that controls a group of business entities, at least one of which is organized or tax resident outside of the US, that are required to consolidate their accounts for financial reporting purposes under US GAAP, or that would be required to consolidate their accounts if equity interests in the US business entity were publicly traded on a US security exchange market.  The regulation require an MNE group to report on a country-by-county basis income and taxes paid, and the business activity of foreign operations.

Please see the Internal Revenue Bulletin 2016-29 for additional detail.

https://www.irs.gov/irb/2016-29_IRB/ar05.html

News / Updates

California Competes Tax Credit

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California Competes Tax Credit

The California Competes Tax Credit is a negotiated income tax credit program created to attract and retain businesses in California creating job opportunities and economic boost.  The credit is awarded through a two-phase competitive process and based on several factors including:

  • Number of full-time jobs created
  • Compensation paid to employees
  • Amount of new capital investment
  • Business economic impact

The California Competes Tax Credit applies to income tax owed to the Franchise Tax Board.  The credit is non-refundable.  If the credit allowed exceeds the tax due, the excess may be carried over to reduce the tax in the following year, and the succeeding five year if necessary, until exhausted.

Credit applications for the fiscal year 2016-2017 will be accepted:

  • January 2, 2017 through January 23, 2017 ($100 million credit available)
  • March 6, 2017 through March 27, 2017 ($68.3 million credit available)

If you are planning or considering to start or expand business in California, please contact us immediately and get your fair share of allocated government funds!

News / Updates

Independent Contractors Vs. Employees

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Independent Contractors Vs. Employees

The US Government estimates that approximately 3.5 million employees are classified as independent contractors when they are in fact employees in each year.  This misclassification costs the US Government approximately $55 billion of income taxes and $15 billion of unpaid FICA and unemployment taxes in each year.  For this reason, on-going efforts have been made by the US government to detect misclassification of employees during income tax audits.  Additionally, many state governments have implemented their own examination process to minimize their state tax revenue loss due to the misclassification.

Many employers misclassify employees as independent contractors for a simple reason of saving tax money.  Misclassification can save substantial amount of expenses including employer’s share of Social Security and Medicate taxes, overtime pay, unemployment compensation tax, and workers’ compensation insurance.  However, this practice can cause substantial amount of taxes, penalties and interest, and perhaps criminal charges in some cases, in addition to the potential claims by employees for unpaid compensations (including overtime pay, sick pay, vacation and holiday pay).  Let’s break down the potential tax penalties that employers may face if the misclassification is found to be unintentional:

  • $50 for each reported W-2.
  • 5% failure to withhold income taxes.
  • 40% of employee share of FICA taxes.
  • 100% of employer share of FICA taxes.
  • Up to 25% of failure to pay tax penalties.

IRS looks at degree of control exercised by the employee in determining whether or not a worker is an employee or independent contractor.  Generally, there are three factors, under the Common Law Rules, that should be carefully reviewed in classification.  They are:

  • Behavioral Control – Does the payer control or have the right to control what the worker does and how the worker does his or her job?
  • Financial Control – Are the business aspects of the worker’s job controlled by the payer? These include things like how worker is paid, whether expenses are reimbursed, who provides tools and supplies, etc.
  • Type of Relationship – Are there written contracts or employee type benefits?

If determination of employee or independent contractor based on the above mentioned factors is unclear, payor can submit Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, and IRS can officially determine the worker’s status.

Also, payors do not have to cover independent contractors under workers’ compensation insurance, and not liable for payments under unemployment insurance, disability insurance, or social security with the state taxing authorities.  Misclassification may expose employers for sever penalty provisions by state government and there are many state agencies (including the Employment Development Department, Division of Labor Standards Enforcement, Franchise Tax Board, Division of Workers’ Compensation, and the Contractors State Licensing Board) with their own regulations or requirements concerning independent contractors enforcing proper classifications.

 

Take Away

Because the potential liabilities and penalties are significant if an individual is treated as an independent contractor and later found to be an employee, each working relationship should be thoroughly researched and analyzed before it is established.
News / Updates

US Operation of A Foreign Corporation – Subsidiary vs Branch

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US Operation of A Foreign Corporation - Subsidiary vs Branch

U.S. business activities of foreign persons generally are conducted either through a US subsidiary or a US branch.  There are vast differences in the US tax treatment and legal ramifications of these two forms, as briefly summarized below:

US Subsidiary

A US subsidiary of a foreign corporation is taxed as any other domestic corporation, that is, as a separate taxable entity apart from its foreign parent.  A US subsidiary determines its taxable income by including income and expenses it earns and incurs.  In determining a US subsidiary’s taxable income, transactions between the subsidiary and its foreign parent are recognized for tax purposes, subject to arm’s-length pricing rules provided under IRC section 482 and regulations thereunder.  In summary, by maintaining separate books and records, income and expenses earned and incurred by the US subsidiary will be subject to US taxation, generally.

Additionally, in general, by incorporating a separate and distinct legal entity, the foreign corporation has the protection of the “Corporate Veil.”  In other words, the subsidiary is solely liable for its own debts and obligations and its owners (the foreign parent corporation) are sheltered from them, generally.

US Branch

In contrast, a US branch of a foreign corporation is not treated as a separate taxable entity, and thus transactions involving the US branch with the foreign corporation, including other branches of the foreign corporation, generally are not recognized for tax purposes.  Instead, the Code and regulations under IRC sections 864 and 882 employ a special set of rules that allocate and apportion to the US branch a portion of the foreign corporation’s worldwide income in order to determine the net income subject to US tax.

IRC section 864(c) sets forth the rules that determine the gross income effectively connect to a foreign corporation’s US business.  As the name implies, these rules generally require that there be some connection to the foreign corporation’s US business activities for the income in question to be treated as effectively connected.   In other words, based on the level of US branch’s participation in the transaction, the gross income of the foreign corporation is allocated to the US branch.  Because of this subjective nature of determining US source income for the branch, it is one of most frequently questioned and challenged tax issue during an income tax audit of a US branch of a foreign corporation.

Deductions generally are apportioned to the US branch under complex regulatory formulae set forth under IRC section 882 and regulations thereunder, not necessary tailored to the specific facts relating to a particular US branch.  Further discussion is omitted since it is beyond the scope this email communication.  Additionally, a US branch of a foreign corporation is subject to “branch profits tax” which approximates the taxes on dividend.

Contrary to the above mentioned income and deduction allocation and apportionment rules set forth for a US branch of a foreign corporation under the current US tax laws, some foreign corporations with branch operation in US determine its US taxable income under so-called the “Separate Entity Method.”  Under this unauthorized method, like a US subsidiary, a US branch would determine its taxable income by including income that it receives or accrues and deducting expenses that it pays or incurs.  Again, this approach is in contrary to the current tax laws, and exposes the foreign corporation for substantial tax risks.

Additionally, because a branch is not a separate legal entity, branch offices do not offer the same projection to their owners as they are simply a legal extension of the head office.  Hence any legal claim against the branch can be directly passed on to the foreign corporation located overseas.

***

<한국어버전>

 

미국으로 진출하는 회사들은 보통 지사 (Subsidiary) 또는 지점 (Branch) 을 설립하여 운영한다. 두 방침은 아주 다른 US tax consequences와 legal ramification이 있으며 아래에 두 방침의 차이점을 간략하게 설명한다.

지사 (Subsidiary)

외국회사의 미국지사는 독립적인 기업으로 간주되며 US tax 또한 지사 자체의 손익손실에 따라 적용된다. 단, 특정관계거래에 대한 이전 가격 연구 (Transfer Pricing) 가 필요하다. 또한 독립적인 법인으로써 지사의 법적문제는 외국 본사에게 영향이 없다고 볼 수 있다.

지점 (Branch)

외국회사의 미국지점은 독립적인 기업으로 간주되지 않으며 지점에대한 US tax는 미국세입법 조항 864와 조항 882에 의해 손익손실이 결정된다. 우선 지점의 US income 은 조항 864에 의해 외국법인의 world-wide income을 미국내에 level of operation에 따라 분배 (allocate and apportion) 한다. 분배 방식은 매우 주관적이며 감사시 빈번히 발생하는 tax risk 이기도 하다. 다시 말해서 지점의 수입은 본사의 world-wide income을 주관적인 절차에 따라 배분하는 것이 현 미국 세법이다. 마찬가지로 미국 지점 지출 또한 미국세입법 조항 882에 의해 본사의 world-wide expense를 지정된 formula에 의해 배분한다.

위에 설명했었던 것과 반대로 지점이지만 독립된 기업처럼 보고하는 “Separate Entity Method”을 이용하는 회사들도 종종 볼 수 있다. 이 방법은 세법상 허용되지 않은 방법이기 때문에 모회사에 매우 큰 위험 요소 이다.

지사와는 달리 지점은 독립적인 법인이 아니기 때문에 미국에서 발생된 법적문제나 채무는 외국 본사에게 직접적인 영향을 미친다.

News / Updates

생명과학 및 연구 개발 산업

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생명과학 및 연구 개발 산업

생명 과학 산업은 샌디에고 경제의 주요 부문이다. 샌디에고에는1,100 개 이상의 생명 과학 회사와 80 개 이상의 연구 기관이있으며 Pfizer, Johnson & Johnson, GlaxoSmithKline, Merck 등 주요 제약 회사들이 주변 연구 기관, 대학교, 그리고 생명 공학 기업들과 협력하여 거대한 생명과학 산업을 이루고 있다.

이 산업에서 연구 및 개발은 막대한 양의 자본을 필요로 하며, 보통 관련된 회사들은 수익을 창출하기까지 수억달러를 투자해야한다. 연구 시작에 앞서 자금확보는 회사가 가장 처음 직면하는 위험요소이며 가장 중요한 단계일 것이다. 필자는 좋은 아이디어를 가지고 있음에도 불구하고 투자자 확보 및 금융전략에 실패하여 빛을 보지 못하고 파산하는 많은 회사들을 보았다.

현재 회사가 계속되는 적자로 인하여 세금을 내고 있지 않다고 하더라도 세무전략을 세우는것은 매우 중요하다. 세무 전략을 통해 투자자들 뿐만 아니라 금융기관에서 평가하는 투자 가치를 증가 시킬 수 있으며 이것은 미래의 이익을 최대화 할 수 있는 방법이기도 하다. 필자는 이와 관련된 기업 및 회사들이 고려 및 반영해 볼 만한 세무전략을 몇가지 소개 하려고 한다.

 

R & D Credit

지금까지 많은 스타트업 회사들이 순영업손실 (net operating loss)로 인하여 연구개발 세액공제 (R&D Credit)를 신청할 필요성을 느끼지 못했을 것이다. 하지만, 2015년 새로운 세법 (Protecting Americans from Tax Hikes (PATH) Act.)이 제정되면서 조건에 해당하는 small to mid-sized 회사들은 수입이 증가하면서 생기는 법인대체최소세 (Alternative Minimum Tax - AMT)와 고용주가 부담하는 사회보장세 (FICA Tax)에 대한 공제를 받을 수 있게 되었다. 또한, 회사에 소득이 발생하는 시점에 이월하여 사용할 수 있는 크레딧을 적절한 문서화를 통하여 쌓아 갈 수 있다. 이러한 미래형 세금자산 확보는 회사자금의 유동성 확보 및 투자가치상승을 위한 벤처 캐피탈 및 금융기관의 기업평가에 아주 직접적인 영향을 줄 것이다.

Start-up tax losses

세무 상 자본 손실은 이월 기간을 제한하고 있다. 이월 기간 내에 사용되지 않은 모든 손실은 만료기간이 되면 사라지기 때문에 공제 받을 수 있는 타이밍을 관리하고 세무 상 손실의 수명을 연장하기 위해 특정 세금 election 을 이용하는 방법이 중요하다. 또한, 대부분의 회사들은 equity rounds를 이용해 운영 자금을 충당한다. 미국 세입법 (IRC 382)에 따르면 회사 소유권이 변경이 있을 때 마다 세무 상 손실금을 활용하는 금액을 제한한다. 올바른 세금 계획은 이러한 세금 혜택 손실을 최소화하고 법인세 자산 가치를 보존하기 위한 필수 사항이다.

Equity-based compensation

핵심 인재 유지는 많은 초기 단계의 생명 과학 기업이 직면 한 주요 과제 중 하나이다. 많은 기업들이 인재를 유치하기 위해 다양한 형태의 비 현금 보상을 제공한다. 이때 회사가 선택할 수있는 주식 기준 보상 등 여러가지 유형이 있으며, 유형마다 세금 및 재정에 서로 다른 영향을 미친다. 주식 기준 보상을 구현하기 전에 방법의 메커니즘을 알고 장단점을 모두 고려하여 선택해야 할 것이다.

Final Regulations under IRC section 385

최근 미국세청 (IRS)에서 Relate party (특수관계) 사이에서 발생한 채무관계를 정의하는 객관적 기준을 제시하는 규정을 (Regulations under IRC section 385) 발표했다. 해당규정에서는 증빙서류 없이 일어난 회사간의 부채는 소득세 목적으로 “주식”과 같이 취급한다고 명시하고 있다. 즉, 비용처리를 목적으로 사용된 이자비용은 배당금으로 취급한다. 2016년 4월 4일 이후 특수관계 사이에서 발행된 채무증서가 있다면 과세당국과의 충돌을 피하기위해 세금전문가의 도움을 받아 해결할것을 권한다.

International Tax Compliance Issues

소득 이전을 통한 세원 잠식 (Base Erosion and Profit Sharing - BEPS), 매출 축소(Earnings Stripping), 조세 전도(Inversion), 원가분담약정(Cost Share Arrangement) 및 무형자산 이전(Intangible Property Migration)은 근래에 들어 IRS에서 주시하는 주요 항목들이다. IRS는 해당 분야에서 발생하는 문제들에 대하여 추가준수사항 및 엄격한 규정들을 제시하고있다. 이 에 해당하는 세금 문제들은 IRS에 의해 면밀히 조사되며, 불응시 상상할 수 없는 결과를 초래할 수 있다. 다국적 기업은 세금 전문가의 도움을 받아 빠르게 변하고있는 세법을 준수하며 사업 전략 및 세법 전략을 계획하여야 한다.

Click here for English version of this article.

News / Updates

Life Sciences

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Life Sciences

The life sciences industry is a major sector of economy of San Diego.  The region has more than 1,100 life sciences companies and more than 80 research institutes.  Major pharmaceutical companies including Pfizer, Johnson & Johnson, GlaxoSmithKline and Merck maintain a presence in San Diego to foster collaboration with major research institutions, universities and many biotech companies.

Drug discovery and development is very capital intensive.  Companies need to invest hundreds of millions of dollars before they can start generating any revenue.  Financing is probably the greatest risk companies face in their early stages, and I have witnessed many companies with great ideas gone bankrupt because they weren’t quite ready for major investment from VCs or financing strategies.

Even in years when companies incur no tax liability because of operating losses, proper tax planning is important to maximize the future benefits of current investments and the valuation VCs and banks look at before they hand out money.  So I like to share some of the key tax planning ideas that life sciences companies should consider.

 

R&D credit

Up until now, start-up companies saw no immediate need for claiming Research and Development tax credit because of their net operating loss position.  However, with the enactment of the Protecting Americans from Tax Hikes (PATH) Act of 2015, many small to mid-sized businesses may now use the credit against alternative minimum tax and offset the FICA employer portion of payroll tax, if certain conditions are met.  Also, having a proper documentation in place can secure the credit carryforwards that can be used later years when the companies start generating taxable income.  This future tax asset will have a direct impact to future cash flow and therefore impacts the value of the companies, VCs and banks evaluate when making investment decisions.

Start-up tax losses

Tax losses have limited carryforward periods.  Any losses that are not used within the carryforward periods will be expired and gone.  So it is very important to manage timing of deductions and utilize certain tax elections to prolong the life of tax losses.  Additionally, many of these companies undergo a number of equity rounds to finance the operation.  IRC section 382 limits the ability to utilize these tax losses when certain ownership changes take places.  Certain tax planning can be implemented to minimize these limitations to preserve these valuable tax losses – tax assets.

Deferred compensation

Retention of key talents is one of the main challenges many early-stage life science companies face.  Many companies offer noncash compensation in various forms to retain and attract these talents.  There are various types of equity-based compensation that companies can choose from, and each of them have different tax and financial impact.  Before implementing equity-based compensation, companies must be aware of mechanics of how these awards work and consider pros and cons.

Final Regulations under IRC section 385

IRS recently issued final regulations under IRC section 385 providing objective criteria to sustain debt treatment for tax purposes of intercompany debt issued among related parties.  Without an adequate documentation required under the regulations, certain intercompany debt would be treated as stock for income tax purposes.  In other words, financing cost intended to be treated as interest expense would potentially be re-characterized as dividend.   Related party debt instruments issued on after April 4, 2016 must be analyzed by confident tax professionals to avoid any conflicts with taxing authorities.

International Tax Compliance Issues

BEPS, Earnings Stripping, Inversion, Cost Share Arrangement and IP migration – these are some of the key matters IRS recently provided additional compliance requirements and more stringent rules around.  Tax issues related to these matters are heavily scrutinized and noncompliance can result in unimaginable consequences.  Multinational companies must retain qualifying tax professionals to be in compliance with these fast revolving tax laws.

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News / Updates

New Sales Tax Bill Proposed By Rep. Senesenbrenner

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New Sales Tax Bill Proposed By Rep. Senesenbrenner

Rep. Sensenbrenner recently proposed H.R. 5893 “No Regulation Without Representation Act of 2016.”  This bill would provide more objective physical presence threshold for states’ right to subject taxpayers for sales tax collection responsibilities.

If H.R. 5893 passes, states would be limited in what they can consider nexus.  A seller under the new bill would be someone who has physical presence in a state.  Nexus is triggered only if a taxpayer is physically located or have personal property or employee in the state.  This means Amazon FBA sellers are no longer on the hook to collect and remit sales tax in states where the seller’s only connection with a state is inventory in an Amazon fulfillment warehouse.

Still long way to  – need to be passed by House, Senate, and the President.  We expect that states would fight hard to dismiss this new bill, but we will continually monitor the passage of this new bill.