General ArticlesLarry Cooper

What are the Three Primary Requirements for IC-DISCs?

By December 8, 2014 January 21st, 2020 No Comments

What is an IC-DISC?

An IC-DISC is a tax-exempt entity that pays no federal tax on commission income. An IC-DISC, means a significant tax advantage by converting “ordinary income” taxed at 39.6% federal rate to maximum dividend rate of 23.8% (15.8% rate differential).

What are the requirements?

  • The manufacturing requirement

The property must be manufactured, produced, grown, or extracted in the U.S

  • The destination requirement

The export property must be held primarily for sale, lease, or rental for direct use, consumption, or disposition outside the U.S.

  • The minimum of 50% U.S. content requirement

All export property may have no more than 50% of the value of the final costs attributable to foreign components. The fair market value of the foreign content is determined based on the dutiable value of the foreign components. Click here to learn more about international services.

For more information on IC-DISC’s and their benefits, please contact Larry Cooper at (231) 726-5840 or