IC-DISC – The Last Surviving Export Incentive

The Interest Charge-Domestic International Sales Corporation is the last surviving federal tax benefit for privately-held exporters in the United States. Private companies that export products outside the U.S., including Canada and Mexico, can save more than 50 percent on their federal income taxes related to export sales.

Growing demand for U.S. products in emerging foreign markets like China and India is at an all-time high. Exporters that don’t currently have an IC-DISC in place are missing the opportunity to significantly reduce their federal income tax burden each year.

The IC-DISC provides U.S. exporters and their shareholders permanent tax savings—20 percent of net export income. An IC-DISC operates as follows:

SourceHOV | Tax optimizes the commission paid to the IC-DISC by employing a transaction-by-transaction analysis, which utilizes all inter-company pricing methods afforded by the Internal Revenue Code and Treasury Regulations. These include 50 percent of combined taxable income, 4 percent of gross receipts, and marginal costing at the product, product line and product group levels.

The cost of implementation, maintenance and transaction optimization of IC-DISC is minimal compared to the federal tax savings available to every U.S. exporter.