Kennedy Corner
»The New War For Talent
When a meteorite blazed through the morning skies of central Russia in mid-February and exploded, the news media described it as a rare event. And it was. Fast forward one month and just about every government in the world is looking at the potential for a "rare event" to visit their borders, and wringing their hands over how to prepare for it.
»Here Comes Patient-Centric Health
U.S consumers are accustomed to choices. We often take for granted our ability to select products, price points and preferred channels. Why, then, do we as patients expect anything less from our healthcare providers?
»The Market Always Finds a Way
In the 1993 Steven Spielberg film Jurassic Park, the protagonists discovered at one point (to their horror) that the island’s dinosaurs, which had all been created the same gender, had somehow managed to reproduce. “Life always finds a way,” muttered Sam Neill’s character Dr. Alan Grant.
»2012 in Review, and a Look Ahead
Looking back, several market forces propelled global consulting demand, causing firms and clients to undertake larger and more ambitious engagements than in recent years. The rapidly changing nature of client needs and the continued evolution of provider capabilities converged around some key themes.
»Change and Collaboration—The Rx For a Healthy Life Sciences Industry
For many of us in the U.S., it’s time to update healthcare benefit selections and learn of new or revised healthcare insurance plan offerings, options, and features. In many ways, the change and complexity we face as end users reflects the upstream challenges facing the healthcare industry at large.
»Kennedy Corner: Change Management; Easier Said Than Done
Business leaders have an arsenal of management tools at their disposal ready to deploy for almost any business need, from boosting revenues to increasing efficiencies and managing risk.
» View all
Travel Advisory
»Hilton’s Building Boom
Coming off a whirlwind 2012, Hilton Worldwide is the fastest growing global hospitality company by number of rooms.
»Extended Stay America Serves Up Free Breakfasts With ‘Grab and Go’
Extended Stay America launched a new Grab and Go Breakfast program, which is available seven days a week from 6 a.m. to 9:30 a.m. at all of its more than 600 locations.
»Homewood Suites Survey: Comfort is King
A new survey of frequent business travelers found that they want more room to spread out, the ability to maintain a normal routine and opportunities to interact with business associates and fellow travelers.
»Furnished Quarters Wins CARTUS Award
Furnished Quarters was awarded the CARTUS Global Network’s Commitment to Excellence Award for the third consecutive year.
» View all
Book It!
»Excerpt: Finding Your Firm’s Growth Engine
The following is an excerpt from Leading Firms: How Great Professional Service Firms Succeed & How Your Firm Can Too by David C. Kuhlman. In the book, Kuhlman distills 25 years of
experience advising senior management at some of the world’s most prominent consulting firms. This excerpt from Chapter Six: “The Growth Engine” explores two of the key factors driving growth in the most successful firms.
»Excerpt: The Online Marketing Revolution
The following is an excerpt from Online Marketing for Professional Services, a thought-provoking and practical approach to online marketing by authors Aaron E. Taylor, Sylvia Montgomery, Sean T. McVey and Lee W. Frederiksen.
»Review: Tipping Sacred Cows
We all have those sacred cows at work, but these nuggets of advice, in practice, can lead to career-limiting unintended consequences.
»Review: Playing to Win
If strategy is about creating a competitive advantage that allows a firm to win, then pinpointing your strategy to just a few choices will dramatically increase your chances of success.
»Review: Seeing the Big Picture
According to Kevin Cope, founder of Acumen Learning and author of Seeing the Big Picture, all companies are driven to success or failure by the same five simple drivers—cash, profit, assets, growth and people
»Review: Get Lucky
As the pace of change accelerates and the volume of information explodes, everyone is under great pressure to connect with the people and ideas we need to thrive.
» View all
|
2
13
2012
»Paradigm Partners: Is the IC-DISC Export Benefit for You?
By Zee Makhani and Jim Foster
What is an IC-DISC?
An Interest Charge—Domestic International Sales Corporation (IC-DISC) is a little known, but increasingly popular, export incentive for U.S. companies. The IC-DISC incentive has been in existence in its current form since 1984.
It provides tax savings to qualifying domestic exporters to encourage more U.S. companies to compete in the progressively competitive global market. By taking advantage of this tax incentive and the reduced tax rates from the Bush Era Tax Cuts, companies can strengthen their economic position by effectively reducing what they would owe on foreign sales income under the ordinary income tax rate (typically 35%) to the qualified dividend rate of 15%.
Do I qualify?
To take advantage of the IC-DISC, domestic exporters do NOT need to be selling products that are “100% American” or even “100% new”. In fact, a domestic exporter’s products only need to meet three specific criteria to qualify as export property for purposes of the IC-DISC. The products must:
1. Be manufactured, produced, grown, or extracted in the United States;
2. Be held primarily for sale, lease, or rental for direct use or consumption outside the United States; and
3. Have 50% or more of its fair market value attributable to content direct from the United States.
While the IC-DISC is primarily for the export of tangible goods, including software, the rules for the IC-DISC do allow for gross receipts generated by certain services to qualify as well. This means that companies engaged in engineering or architectural services for the design of permanent structures (buildings, roads, bridges, etc.) to be built outside the United States can qualify.
How does it work?
Essentially, an IC-DISC is a separate entity incorporated under the laws of a chosen, tax friendly state that acts as a silent partner with a domestic exporter. The IC-DISC itself does not require the working capital of a traditional brick-and-mortar company—it can exist on paper alone without an office, employees, or supplies.
It primarily requires the legal formation of the entity and an election by that entity to be treated as an IC-DISC within 90 days of the beginning of the
taxable year.
Once the IC-DISC has been correctly setup, the domestic exporter makes commission payments to the IC-DISC on all foreign sales and deducts this commission from the domestic exporter’s ordinary income. The commission is calculated as 10% of the export promotion expenses by the IC-DISC attributable to the qualified export receipts plus the greater of:
1. 4% of qualified export receipts; or
2. 50% of exporter’s taxable income.
Further savings can be generated by computing commission payments on a transaction by transaction basis. A transaction by transaction analysis allows exporters to use the more advantageous commission calculation based upon the margin of each of the transactions rather than applying the calculation to the entirety of the foreign sales. The IC-DISC is federally tax exempt, and thus the only time tax is paid is when distributions of the commissions are made
to the shareholders.
Should I do it?
While many companies are eligible to take advantage of the IC-DISC tax incentive, few do because they’re either unaware of the benefit, they believe setting up the IC-DISC seems too daunting or confusing, or they feel the task of calculating the commissions is burdensome and not worth the benefit. However, by partnering with experienced professionals who understand the process, companies can reduce the time and expense associated with capturing the tax incentives to which they are entitled.
Zee Makhani, Director, and Jim Foster, J.D., National Tax Manager, both of Paradigm Partners, a national tax consulting firm specializing in niche tax services.
|
Gold Sponsors:
Silver Sponsors:
Featured Speakers:
Joseph Kornik
Publisher and Editor-in-Chief,
Consulting magazine
Brian Murphy
Chief of Staff, Point B
Brian Jacobsen
General Manager, Slalom Consulting
Tom Rodenhauser
Managing Director, Advisory Services, Kennedy Consulting Research & Advisory
Sponsor Speaker:
Drew West
Director, Product Marketing,
Deltek
Sponsored By:
advertisement
|
