By: Warren Averett
Max Koss and Kevin Lucier Quoted in Global Trade Magazine
In an article published by Global Trade Magazine on April 11, 2016, Max Koss and Kevin Lucier discuss the one remaining U.S. export incentive, the interest-charge domestic international sales corporation (IC-DISC), which provides exporters an opportunity to decrease taxes on export profits. There have been significant changes in and repeals of tax laws affecting U.S. businesses over the last 14 years, but after having been around since the early 70’s, the IC-DISC is having a resurgence. “A U.S.-based exporter is allowed a deduction for the commission paid to an IC-DISC at the exporter’s ordinary tax rate,” Koss and Lucier explain. “The shareholders of the IC-DISC are taxed on the resulting dividend at the 20 percent rate, usually with an additional 3.2 percent net investment income tax (NIIT). Assuming a maximum 39.6 percent individual tax rate on income from flow-through entities such as LLCs and S corporations, the tax savings can reach almost 16 percentage points.” For more information, please read the full article here.