We assemble products in the United States using imported components. Do all sales qualify as export property?

U.S. assembly and export destination do not alone establish qualified export property. Section 993 requires qualifying U.S. manufacture, production, growth or extraction, with no more than 50% of fair market value attributable to imported articles. The manufacturing and foreign-content tests require actual product-level support.

A specific business-owner situation

A manufacturer assembles imported components in the United States and exports the finished unit. Its U.S. shipping address does not prove every product meets the export-property definition.

Illustrative example, not a client result.

What to establish before filing

1. Establish the U.S. manufacturing activity.
2. Calculate imported content under the applicable valuation rule.
3. Verify foreign use and excluded-property rules.

Which fact changes the answer?

Meaningful qualifying production differs from minor handling, and imported-content value can independently affect eligibility. Both tests matter.

A mistake to avoid

Do not substitute a marketing made-in-USA claim for the tax definition.

Records that support the decision

• Bills of materials.
• Import valuation and production records.
• Destination evidence.

The decision to document

Maintain a product-level qualification file before including sales in an IC-DISC commission base.

Business-owner tax planning and preparation scope · Discuss advisory scope with AE

Related questions

• Can we apply the IC-DISC commission percentage to all revenue without testing transaction groupings?
• We accrued an IC-DISC commission at year-end. Does the journal entry alone satisfy the payment requirements?

Sources and editorial context

• IRS Form 1120-IC-DISC instructions: qualification and reporting
• Section 993: qualified export receipts and property

General educational information prepared with AI assistance. No individual professional review is claimed. Apply the relevant tax-year rules to the actual records. Editorial policy · AI disclosure.