Press Room: Article

October 16, 2009

IC-DISCs: The Impact of Pending Legislation?

Interest charge domestic international sales corporations (IC-DISCs) have gained popularity in recent years among closely held businesses due to the elimination of other export incentives and the enactment of favorable tax rates.

Under the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRA), non-corporate shareholders of IC-DISCs are eligible for a 15 percent tax rate on qualified dividends while commisssions paid to the IC-DISC by the related exporter, and which are the source of the dividends, generate an ordinary income deduction at a 35 percent tax rate.

IC-DISCs now face an uncertain future…

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