Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 73-70

1973-1 C.B. 361

Sec. 993

IRS Headnote

A DISC may satisfy the destination test of section 993(c)(1)(B) of the Code by means of export documents from which the price and ultimate consignee's name have been deleted.

Full Text

Rev. Rul. 73-70

M, a domestic international sales corporation (DISC) sells export property to T, an unrelated domestic corporation. T is engaged in the business of developing foreign markets for United States goods and then purchasing such goods for resale, at a profit, to foreign buyers. T is not a DISC.

Held, M may satisfy the "destination test" of section 993(c)(1)(B) of the Internal Revenue Code of 1954 (which provides that export property means property held primarily for sale, lease, or rental, in the ordinary course of trade or business, by, or to, a DISC, for direct use, consumption, or disposition outside the United States), by means of a copy of a shipper's export declaration, or a document such as an export bill of lading, upon which the name of the ultimate consignee and the price paid for the goods have been marked out, provided that the declaration or document still indicates the country in which delivery to the ultimate consignee is to be made. In the alternative, the "destination test" may be satisfied by means of a certificate of an agent or representative of the carrier, disclosing delivery of the property outside the United States, but withholding the name of the ultimate consignee and the price paid for this property. Thus, the DISC need not, for purposes of proving delivery of goods outside the United States, require disclosure of the identity of the foreign buyer and sales price.