Use of a Domestic International Sales Corporation to Reduce Federal Income Tax on Export Earnings
Rendell, Robert S.
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Abstract
The Domestic International Sales Corporation (hereinafter DISC) provisions were introduced into the International Revenue Code by the Revenue Act of 1971. The purpose of these provisions was to increase U.S. exports and thereby (1)improve the balance of trade position of the United States which had been deteriorating badly during the late 1960's and early 1970's, and (2) reduce the unemployment rate which ad increased significantly during the latter part of this period. The method employed to achieve these objectives was a tax incentive for U.S. exporters in the form of the deferral of federal income tax on export income earned by a DISC until such time as the DISC distributed these earnings.