Nonrecognition of transactions with related domestic international sales corporation; tax treatment of commissions.

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(a) No deduction shall be allowed to any taxpayer for any payment to a related domestic international sales corporation;

(b) No income or expense that would be attributed to a taxpayer but for the provisions of sections 991 to 996 of the Internal Revenue Code shall be treated as attributable to a related domestic international sales corporation; and

(c) No deduction shall be allowed to a taxpayer for interest on DISC-related deferred tax liability paid pursuant to section 995(f) of the Internal Revenue Code.

(2) Notwithstanding subsection (1) of this section, if a domestic international sales corporation is formed on or before January 1, 2014:

(a) A tax shall be imposed under this chapter at a rate of 2.5 percent on any commission received by the domestic international sales corporation on or after January 1, 2013; and

(b) A deduction shall be allowed for commission payments to the domestic international sales corporation made on or after January 1, 2013, if the tax in paragraph (a) of this subsection is imposed on the commission.

(3) As used in this section, "domestic international sales corporation" means a domestic international sales corporation as defined in section 992 of the Internal Revenue Code. [1985 c.802 §22d; 2013 s.s. c.5 §6a; 2014 c.114 §2]


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