TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Tuesday, April 27, 2004

SOI Releases 2000 Foreign Sales Corporation Data

Wednesday, April 28, 2004

The just-released Statistics of Income Bulletin (Winter 2003-04) includes Foreign Sales Corporations, 2000. Here is the abstract:

Foreign Sales Corporations (FSC’s) filed 4,200 income tax returns for Tax Year 2000. FSC’s are foreign corporations, created by “parent” shareholders (mostly corporations). Generally, the FSC mechanism exempts a portion of income derived from the export of U.S. manufactured merchandise and certain services from U.S. income taxation.
Overall measures of FSC economic activity and earnings can be highlighted using Tax Year 2000 statistics. For 2000, the gross receipts of FSC’s and related suppliers, a broad measure of economic activity, was $349.0 billion, up from $285.9 billion for 1996, the last year for which comparable statistics were compiled. After subtracting costs of goods sold, and allocations of receipts using pricing rules to FSC’s and their related suppliers, FSC’s generated $43.9 billion of “total income.” Of this amount, $16.0 billion were subject to U.S. tax as nonexempt income, while $27.9 billion were exempt from regular U.S. income taxation. Following other adjustments, income subject to U.S. tax, the tax base, was $6.7 billion, which generated a total U.S. income tax of $2.3 billion. In 2000, FSC’s distributed $14.7 billion to their parent shareholders, mostly U.S. corporations. These distributions reflected current and accumulated (i.e., prior-year) earnings and profits.

For three related Excel tables of data, see here. For more statistics on FSC's, see here.

Over the coming week, TaxProf Blog will summarize the remaining Featured Articles and Data Releases in the latest SOI and provide links to the full reports and accompanying tables and statistics.

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