SENATE BILL REPORT

SB 6273

BYSenators Lee, Warnke, Deccio, Saling, Conner and Fleming

Authorizing the development of a model shared foreign sales corporation.

Senate Committee on Economic Development & Labor

Senate Hearing Date(s):January 28, 1988

Senate Staff:Jack Brummel (786-7428)

AS OF JANUARY 27, 1988

BACKGROUND:

Increasing exports of Washington products offer a way to improve the performance of the Washington economy and increase state revenues.  Foreign sales corporations represent the only major federal tax incentive for exporters.  The tax benefit amounts to a 15 percent reduction in corporate taxes on exports.  A shared foreign sales corporation allows 25 or fewer small and medium sized exporters to take advantage of the tax benefits by becoming shareholders in a corporation established in a qualifying foreign country.  Each exporter-shareholder of a shared foreign sales corporation owns a separate class of stock and operates its own export business as usual. 

SUMMARY:

The Department of Trade and Economic Development develops a model shared foreign sales corporation and makes the model available to exporters, port authorities, and trade associates in the state.

Appropriation:    $50,000

Revenue:    yes

Fiscal Note:      requested January 27, 1988