{"id":12401,"date":"2019-04-15T13:49:46","date_gmt":"2019-04-15T13:49:46","guid":{"rendered":"https:\/\/amerilawyer-blog.local\/?page_id=12401"},"modified":"2019-09-26T14:03:34","modified_gmt":"2019-09-26T14:03:34","slug":"florida-ic-disc","status":"publish","type":"page","link":"https:\/\/www.amerilawyer.com\/blog\/florida-ic-disc","title":{"rendered":"Florida IC-DISC Formation | Includes Corporate Kit and Free Legal Advice"},"content":{"rendered":"<div style=\"font-size:17px\">\n<h1 style=\"margin-bottom:0px\">Florida IC-DISC Formation 101<\/h1>\n<p style=\"margin-top:0px\"><b>What is a Florida IC-DISC?<\/b> It\u2019s an Interest Charge-Domestic International Sales Corporation. If your business may involve U.S. manufacturing of goods for export, you may be entitled to tax savings with an IC-DISC. The new interest charge domestic international sales corporation must formally choose to be treated as an IC-DISC and must also file an annual U.S. income tax return even though it pays no U.S. income taxes.<\/p>\n<h2 style=\"margin-bottom:0px\">Florida IC-DISC Rules and Requirements<\/h2>\n<p style=\"margin-top:0px\">To be eligible to make an IC-DISC election, the corporation must satisfy several IC-DISC rules and requirements:<\/p>\n<ul>\n<li>There is a single class of stock with an aggregate minimum par value of $2,500;<\/li>\n<li>95% of gross receipts involve goods manufactured in the U.S. as described below;<\/li>\n<li>95% of the assets of the Florida IC-DISC is inventory for export as described below;<\/li>\n<li>The tax year conforms to that of the IC-DISC\u2019s principal shareholder;<\/li>\n<li>Separate books and records are maintained by the IC-DISC; and<\/li>\n<li>One of the IC-DISC rules is that the IC-Disc is not a member of a controlled group involving a foreign sales corporation.<\/li>\n<\/ul>\n<h2 style=\"margin-bottom:0px\">Form a Florida IC-DISC<\/h2>\n<div style=\"text-align: justify; width:700px; margin-top:0px; float:right\">\n<img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/amerilawyer-blog.local\/wp-content\/uploads\/2019\/04\/corporate-kit-when-you-incorporate.png\" alt=\"ic-disc-rules\" width=\"700\" height=\"350\" class=\"alignnone size-full wp-image-12344\"  style=\"margin:0; display: inline-block\" srcset=\"https:\/\/www.amerilawyer.com\/blog\/wp-content\/uploads\/2019\/04\/corporate-kit-when-you-incorporate.png 700w, https:\/\/www.amerilawyer.com\/blog\/wp-content\/uploads\/2019\/04\/corporate-kit-when-you-incorporate-300x150.png 300w, https:\/\/www.amerilawyer.com\/blog\/wp-content\/uploads\/2019\/04\/corporate-kit-when-you-incorporate-144x72.png 144w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\" \/><br \/>\n<a href=\"https:\/\/www.amerilawyer.com\/corporate-kit\/\" target=\"_blank\" rel=\"noopener noreferrer\">Already incorporated? Get a Complete and Custom Corporate Kit for only $29.95 HERE!<\/a><\/div>\n<div style=\"width:700px\">\n<p style=\"color:#000080; text-weight:700\"><b>Each Corporation or Limited Liability Company is COMPLETE<\/b><\/p>\n<p><b style=\"margin-bottom:0px; color:red; text-decoration:underline\">INCLUDES<\/b> State Filing Fee, <b style=\"background-color:yellow; padding:5px; border-radius:5px\">\u201cYES! Includes State Filing Fee\u201d<\/b><br \/>\n<b style=\"margin-bottom:0px; color:red; text-decoration:underline\">INCLUDES<\/b> Corporate or Company Seal and Book<br \/>\n<b style=\"margin-bottom:0px; color:red; text-decoration:underline\">INCLUDES<\/b> Certificate or Articles of Incorporation or Organization<br \/>\n<b style=\"margin-bottom:0px; color:red; text-decoration:underline\">INCLUDES<\/b> Company or Corporate Minutes<br \/>\n<b style=\"margin-bottom:0px; color:red; text-decoration:underline\">INCLUDES<\/b> Corporate By Laws or LLC Regulations<br \/>\n<b style=\"margin-bottom:0px; color:red; text-decoration:underline\">INCLUDES<\/b> Corporate or LLC Ownership Register<br \/>\n<b style=\"margin-bottom:0px; color:red; text-decoration:underline\">INCLUDES<\/b> Banking Resolution<br \/>\n<b style=\"margin-bottom:0px; color:red; text-decoration:underline\">INCLUDES<\/b> Membership or Stock Certificate<br \/>\n<b style=\"margin-bottom:0px; color:red; text-decoration:underline\">INCLUDES<\/b> Preliminary Name Search<br \/>\n<b style=\"margin-bottom:0px; color:red; text-decoration:underline\">INCLUDES<\/b> <b style=\"padding:5px; border-radius: 5px\">110% Lowest Price Guarantee<em>!<\/em><\/b><\/p>\n<div style=\"margin-bottom:0px\">Yes, even <b style=\"margin-bottom:0px; color:red; text-decoration:underline\">INCLUDES Attorney\u2019s Fee<\/b> (No Hidden Attorney Fees).<\/div>\n<div style=\"margin-top:0px\">\n<style>\r\n.myButton {\r\n\t-moz-box-shadow: 1px 2px 0px 0px #939393;\r\n\t-webkit-box-shadow: 1px 2px 0px 0px #939393;\r\n\tbox-shadow: 1px 2px 0px 0px #939393;\r\n\tbackground:-webkit-gradient(linear, left top, left bottom, color-stop(0.05, #ff0000), color-stop(1, #e53737));\r\n\tbackground:-moz-linear-gradient(top, #ff00005%, #e53737100%);\r\n\tbackground:-webkit-linear-gradient(top, #ff00005%, #e53737100%);\r\n\tbackground:-o-linear-gradient(top, #ff00005%, #e53737100%);\r\n\tbackground:-ms-linear-gradient(top, #ff00005%, #e53737100%);\r\n\tbackground:linear-gradient(to bottom, #ff00005%, #e53737100%);\r\n\tfilter:progid:DXImageTransform.Microsoft.gradient(startColorstr='#ff7979', endColorstr='#e53737',GradientType=0);\r\n\tbackground-color:#000000;\r\n\t-moz-border-radius:5px;\r\n\t-webkit-border-radius:5px;\r\n\tborder-radius:5px;\r\n\tborder:1px solid #cdcdcd;\r\n\tdisplay:inline-block;\r\n\tcursor:pointer;\r\n\tcolor:FCFCFC;\r\n\tfont-family:Arial;\r\n\tfont-size:17px;\r\n\tfont-weight:bold;\r\n\tpadding:6px 22px;\r\n\ttext-decoration:none;\r\n\ttext-shadow:0px 1px 0px #cc5252;\r\nmargin-bottom: 20px;\r\n}\r\n.myButton:hover {\r\n\tbackground:-webkit-gradient(linear, left top, left bottom, color-stop(0.05, #e53737), color-stop(1, #700000));\r\n\tbackground:-moz-linear-gradient(top, #e537375%, #700000100%);\r\n\tbackground:-webkit-linear-gradient(top, #e537375%, #700000100%);\r\n\tbackground:-o-linear-gradient(top, #e537375%, #700000100%);\r\n\tbackground:-ms-linear-gradient(top, #e537375%, #700000100%);\r\n\tbackground:linear-gradient(to bottom, #e537375%, #700000100%);\r\n\tfilter:progid:DXImageTransform.Microsoft.gradient(startColorstr='#e537375', endColorstr='#700000',GradientType=0);\r\n\tbackground-color:#e53737;\r\n}\r\n.myButton:active {\r\n\tposition:relative;\r\n\ttop:1px;\r\n}\r\n<\/style><br \/>\n<a href=\"https:\/\/www.amerilawyer.com\/order.htm\" class=\"myButton\" style=\"color: white; font-family: 'arial black'\">INCORPORATE ONLINE<\/a>\n<\/div>\n<\/div>\n<h2 style=\"margin-bottom:0px\">Interest Charge Domestic International Sales Corporation Commissions<\/h2>\n<p style=\"margin-top:0px\">Some considerations to notice in regard to IC-DISC commissions:<\/p>\n<ul>\n<li>The exporter-parent corporation pays an annual, tax-deductible Florida IC-DISC commission on its export sales to the IC-DISC (the commission deduction could yield a tax benefit as high as 35 percent).<\/li>\n<li>The qualified gross receipts test is met if 95% or more of the gross receipts consist of IC-DISC commissions earned with respect to qualified export property, which is property (i) manufactured, produced, grown, or extracted in the United States by a person other than an interest charge domestic international sales corporation.<\/li>\n<li>The allowable commission rate is either 50 percent of export net income or 4 percent of gross export income, whichever is greater.<\/li>\n<\/ul>\n<h3 style=\"margin-bottom:0px\">Florida IC-DISC Taxes<\/h3>\n<p style=\"margin-top:0px\">The new corporation must formally elect to be treated as an IC-DISC and must also file an annual U.S. income tax return even though it pays no U.S income taxes. The commissions paid to the IC-DISC create 35 percent tax benefits for the U.S. exporting corporation while the individual shareholders of the IC-DISC would pay only 15 percent U.S. income tax on dividends received. That means the permanent IC-DISC tax savings for U.S. exporters and their shareholders can be as high as 20 percent!<\/p>\n<ul>\n<li>The commission income is accumulated and untaxed in the IC-DISC. The deferral of income is allowable on annual export sales up to $10 million;<\/li>\n<li>The IC-DISC shareholders are required to pay interest (to the IRS) on the accumulated but untaxed income; and<\/li>\n<li>The IC-DISC shareholders pay U.S. income tax on dividends received from the IC-DISC when distributions are made (the Florida IC-DISC tax on dividends for individuals is now 15 percent).<\/li>\n<\/ul>\n<h3 style=\"margin-bottom:0px\">IC-DISC Dividends<\/h3>\n<p style=\"margin-top:0px\">Export-derived proceeds are paid to IC-DISC shareholders as a dividend taxed at a lower rate than the taxable income-reducing deduction realized by the exporter-parent (a potential tax savings of 20 percent!). Here\u2019s an example of the process and the IC-DISC dividends paid to IC-DISC shareholders:<\/p>\n<table>\n<tr>\n<td style=\"border-left:solid 2px grey; border-top:none; border-right:none; border-bottom:none; border-width:5px\">Gross receipts of U.S. goods exported<\/td>\n<td style=\"border-bottom:solid 2px grey; border-top:none; border-right:none; border-left:none\">20,000,000<\/td>\n<\/tr>\n<tr>\n<td style=\"border-left:solid 2px grey; border-top:none; border-right:none; border-bottom:none\">Cost of goods sold<\/td>\n<td style=\"border-bottom:solid 2px grey; border-top:none; border-right:none; border-left:none\">(16,000,000)<\/td>\n<\/tr>\n<tr>\n<td style=\"border-left:solid 2px grey; border-top:none; border-right:none; border-bottom:none; border-width:5px\">Gross Margin<\/td>\n<td style=\"border-bottom:solid 2px grey; border-top:none; border-right:none; border-left:none\">4,000,000<\/td>\n<\/tr>\n<tr>\n<td style=\"border-left:solid 2px grey; border-top:none; border-right:none; border-bottom:none\">Selling, general and administrative costs<\/td>\n<td style=\"border-bottom:solid 2px grey; border-top:none; border-right:none; border-left:none\">(3,000,000)<\/td>\n<\/tr>\n<tr>\n<td style=\"border-left:solid 2px grey; border-top:none; border-right:none; border-bottom:none; border-width:5px\">Export sales net income<\/td>\n<td style=\"border:none\">1,000,000<\/td>\n<tr style=\"border:none\">\n<th style=\"border:none\">IC-DISC commission:<\/th>\n<\/tr>\n<\/tr>\n<tr>\n<td style=\"border-left:solid 2px grey; border-top:none; border-right:none; border-bottom:none; border-width:5px\">50% of export net income<\/td>\n<td style=\"border-bottom:solid 2px grey; border-top:none; border-right:none; border-left:none\">500,000<\/td>\n<\/tr>\n<tr>\n<td style=\"border-left:solid 2px grey; border-top:none; border-right:none; border-bottom:none\">4% of export gross receipts (greater sum)<\/td>\n<td style=\"border-bottom:solid 2px grey; border-top:none; border-right:none; border-left:none\">800,000<\/td>\n<\/tr>\n<tr>\n<td style=\"border-left:solid 2px grey; border-top:none; border-right:none; border-bottom:none; border-width:5px\">IC-DISC commission paid by exporter-parent corporation to IC-DISC <\/td>\n<td style=\"border-bottom:solid 2px grey; border-top:none; border-right:none; border-left:none\">800,000<\/td>\n<\/tr>\n<tr>\n<td style=\"border-left:solid 2px grey; border-top:none; border-right:none; border-bottom:none\">Commission paid by exporter-parent corporation is a deductible business expense reducing taxable income by a rate of 35%.&nbsp;&nbsp;&nbsp;&nbsp;<\/td>\n<td style=\"border-bottom:solid 2px grey; border-top:none; border-right:none; border-left:none\">280,000<\/td>\n<\/tr>\n<tr>\n<td style=\"border-left:solid 2px grey; border-top:none; border-right:none; border-bottom:none; border-width:5px\">IC-DISC Dividend paid to IC-DISC shareholders<\/td>\n<td style=\"border-bottom:solid 2px grey; border-top:none; border-right:none; border-left:none\">800,000<\/td>\n<\/tr>\n<tr>\n<td style=\"border-left:solid 2px grey; border-top:none; border-right:none; border-bottom:none\">Federal tax rate of 15 % on IC-DISC dividend paid to IC-DISC shareholders<\/td>\n<td style=\"border-bottom:solid 2px grey; border-top:none; border-right:none; border-left:none\">(120,000)<\/td>\n<\/tr>\n<tr>\n<td style=\"border-left:solid 2px grey; border-top:none; border-right:none; border-bottom:none; border-width:5px\">IC-DISC net tax savings<\/td>\n<td style=\"border:none\">160,000<\/td>\n<\/tr>\n<\/table>\n<div style=\"background-color: #234E76; color:white; border: solid 1px black; padding:5px; border-radius:5px; text-align:center; margin-top:30px\"><b align=\"center\">For IC-DISC taxes, the IRS 1120 IC-DISC Tax Form and Instructions can be found <a href=\"https:\/\/www.irs.gov\/forms-pubs\/about-form-1120-ic-disc\" target=\"_blank\" style=\"color:white; border:solid 1px blue; border-radius:5px; padding:5px\" rel=\"noopener noreferrer\">in this link<\/a> to the official IRS site.<\/b><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":null,"protected":false},"author":2,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"template\/full-width.php","meta":{"footnotes":""},"class_list":["post-12401","page","type-page","status-publish","hentry"],"_links":{"self":[{"href":"https:\/\/www.amerilawyer.com\/blog\/wp-json\/wp\/v2\/pages\/12401","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.amerilawyer.com\/blog\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/www.amerilawyer.com\/blog\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/www.amerilawyer.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.amerilawyer.com\/blog\/wp-json\/wp\/v2\/comments?post=12401"}],"version-history":[{"count":0,"href":"https:\/\/www.amerilawyer.com\/blog\/wp-json\/wp\/v2\/pages\/12401\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.amerilawyer.com\/blog\/wp-json\/wp\/v2\/media?parent=12401"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}