Closely-held companies that export have a tax-savings opportunity by creating an Interest Charge – Domestic International Sales Corporation (IC-DISC). While about 6,000 small and medium businesses take advantage of the tax incentives of an IC-DISC, the IRS statistics suggest that only about 25 percent of the potential IC-DISC benefits that are available are actually being captured.

Understanding IC-DISCs

The IC-DISC is a creature of the Internal Revenue Code that provides a significant tax incentive for business owners who manufacture and export. Small to mid-size businesses can set up a separate corporation that elects to be treated as an IC-DISC. Businesses can allocate approximately half of the profits from export sales to this entity. Read More