Status of the Tax Technical Corrections Act of 2006 Regarding Section 7 - Repeal of the 15% IC-DISC Dividend Rate

Since the Tax Technical Corrections Act was first announced the end of September 2006, a literal "firestorm" of responses has been received by the House Ways and Means Committee and the Senate Finance Committee from exporters, clients, tax professionals and lobbyists regarding the repeal of the 15% IC-DISC dividend rate. Apparently, this did the trick because Senate Finance Committee Chairman Grassley elected to postpone the bill until the new session of Congress in January, making it appear that this proposed IC-DISC tax law change has greater implications than a regular technical correction. The 2007 Congress, now in session, has made no mention of taking any action on this bill.

Export Assist continues to work with everyone involved with this bill, especially those in Washington, DC, in order to educate them as to the damage that this bill could do to exporters, especially small businesses, and U.S. competitiveness in foreign markets. 
 
Please keep in mind that the IC-DISC is now the only export tax benefit available and that Section 7 is only a dividend rate adjustment. This 15% dividend rate has been in effect for three years whereas the IC-DISC has been in effect for 35 years. The IC-DISC allows, and will continue to allow, you to receive tax and treasury benefits from dividend and/or deferral.

Should you have any questions, please call us immediately at 800-894-8366 (toll free). We are always pleased to discuss your specific situation.