IC-DISC - Interest Charge Domestic International Sales Corporation 

What is an IC-DISC?

The Interest Charge Domestic International Sales Corporation (IC-DISC) provides a 20% tax savings for qualifying U.S. exporters. The IC-DISC is an entity which serves as a vehicle for export tax savings. An IC-DISC is a domestic corporation that has elected to be an IC-DISC and its election is still in effect.

Generally, an IC-DISC is not taxed on its income. Shareholders of an IC-DISC are taxed on its income when the income is actually (or deemed) distributed. To be an IC-DISC, a corporation must be organized under the laws of a state or the District of Columbia and meet the following tests.

  • At least 95% of its gross receipts during the tax year are qualified export receipts
  • At the end of the tax year, the adjusted basis of its qualified export assets is at least 95% of the sum of the adjusted basis of all of its assets
  • It has only one class of stock, and its outstanding stock has a par or stated value of at least $2,500 on each day of the tax year (or, for a new corporation, on the last day to elect IC-DISC status for the year and on each later day)
  • It maintains separate books and records
  • It is not a member of any controlled group of which a foreign sales corporation (FSC) is a member
  • Its tax year must conform to the tax year of the principal shareholder who has the highest percentage of voting power. If two or more shareholders have the highest percentage of voting power, the IC-DISC must elect a tax year that conforms to that of any one of the principal shareholders. See section 441(h) and its regulations for more information.
  • Its election to be treated as an IC-DISC is in effect for the tax year.

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