The IC-DISC is the last surviving federal income tax incentive for U.S. companies that have products or services delivered outside of the United States. Originally enacted by Congress in 1971, the IC-DISC is a separate legal entity. Corporations and S-Corporations, individuals and partnerships are eligible to receive the tremendous federal income tax savings available under the Internal Revenue Code.
The passage of the American Taxpayer Relief Act of 2012 provides permanence for the IC-DISC. As such, the IC-DISC provides a permanent federal income tax reduction to the shareholders of the IC-DISC. This tax savings is realized when the exporting company deducts the commission it pays to the IC-DISC from its ordinary income. This commission would typically be deductible at 39.6%. IC-DISC is a non-taxable entity, and a 23.8% percent tax is paid on qualified dividends to the shareholders of the IC-DISC. Thus, a reduction in federal income taxes from 39.6% to 23.8% on qualified export sales is realized.
"After meeting other IC-DISC firms, we chose ETM due to their unparalleled experience with the IC-DISC as well as a solid understanding of our industry. We would highly recommend ETM to anyone."Vice President Scrap Recycler (Boston, MA)
"We replaced our prior IC-DISC service provider with ETM, and we were pleased with the tremendous increased federal income tax savings as well as truely personalized service to meet the needs of our company."President Manufacturing Company (Chicago, IL)
"We realize the value of ETM's work and know that we can consult true international tax experts directly at any time. This is impossible to find else where."Tax Partner CPA Firm (Charleston, SC)
"Export Tax Management (ETM) has successfully implemented the IC-DISC for many of our clients, and we will continue to utilize them in the future."Partner Regional CPA Firm (Los Angeles, CA)
"We utilize ETM for all of our IC-DISC's as they have the most experience and resources in the industry to assist us with serving our clients. Their combination of international taxation and industry experience is impeccable."Managing Tax Partner Regional CPA Firm (Boston, MA)
"ETM is the sole provider of IC-DISC services for our family of companies. As such, we recommend ETM to other partners that export their products as well."Vice President Exporter (Hartford, CT)
"As a producer in the film industry, we welcomed the opportunity to work with ETM to implement the IC-DISC structure and significantly reduce federal income tax for our investors."Film Producer (New York, NY)