Does your Company export goods to Canada, Mexico, or other countries? Do you provide engineering, architecture, or design for property constructed outside the United States? If so, you may be eligible for a Federal income tax incentive known as an Interest Charge Domestic International Sales Corporation (the “IC-DISC”). The IC-DISC could potentially save you a significant amount of US income taxes.
What is the IC-DISC?
Many closely held businesses are enjoying the benefits of the IC-DISC. However, many are overlooking the benefits completely, not realizing they qualify, or only claiming a fraction of the benefits which are explicitly allowed and encouraged in the tax code. At a bare minimum, the IC-DISC can effectively reduce the top federal tax rate on qualified goods and services from 35% to 25%, or much, much lower. Companies already claiming IC-DISC benefits that are not performing a “transaction by transaction” calculation are probably not getting the intended, allowable benefits the tax code explicitly encourages.
Have questions about the IC-DISC? Leave a comment below, or click here to read the rest of this article about the IC-DISC and reduced taxes for exporters.
Skoda Minotti’s specialists offer a complimentary analysis for companies already using the IC-DISC to see if there is potential for additional benefits. For more information, contact Jim Forbes, by calling 440-449-6800.