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%.
