Instructions for Form 

1120-FSC

(Rev. January 2024)

U.S. Income Tax Return of a Foreign Sales Corporation

Department of the Treasury

Internal Revenue Service

Section references are to the Internal Revenue Code 

unless otherwise noted.

Contents Page

General Instructions ............. 1

Purpose of Form ............ 1

FSC Repeal and 

Extraterritorial Income 

Exclusion .............. 1

Pre-Repeal FSC Rules ........ 2

Who Must File ............. 3

When To File .............. 3

Where To File .............. 4

Who Must Sign ............. 4

Paid Preparer Authorization ..... 4

Other Forms That May Be 

Required ............... 4

Assembling the Return ........ 4

Accounting Methods ......... 4

Accounting Period ........... 5

Recordkeeping ............. 5

Tax Payments .............. 5

Estimated Tax Payments ....... 6

Interest and Penalties ......... 6

Rounding Off to Whole Dollars ...... 5

Specific Instructions ............. 6

FSC Information ............ 6

Tax and Payments ........... 7

Schedule A ............... 7

Additional Information ........ 8

Schedule B ............... 8

Schedule E ............... 9

Schedule F ............... 9

Schedule G .............. 10

Schedule J .............. 11

Schedule L .............. 12

Schedule M-1 ............. 12

Future Developments

For the latest information about 

developments related to Form 1120-FSC 

and its instructions, such as legislation 

enacted after they were published, go to 

IRS.gov/Form1120FSC.

What's New

Increase in penalty for failure to file. For 

tax returns required to be filed in 2024, the 

minimum penalty for failure to file a return 

that is more than 60 days late has increased 

to the smaller of the tax due or $485. See 

Penalty for late filing of return, later.

Corporate alternative minimum tax 

(CAMT). For tax years beginning after 2022, 

certain corporations must determine whether 

they are subject to the new CAMT and 

calculate CAMT if applicable. See the 

instructions for Schedule J, line 4.

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The Taxpayer Advocate 

Service

The Taxpayer Advocate Service (TAS) is an 

independent organization within the IRS 

that helps taxpayers and protects taxpayer 

rights. TAS’s job is to ensure that every 

taxpayer is treated fairly and knows and 

understands their rights under the Taxpayer 

Bill of Rights.

As a taxpayer, the corporation has rights 

that the IRS must abide by in its dealings 

with the corporation. TAS can help the 

corporation if:

• A problem is causing financial difficulty for 

the business.

• The business is facing an immediate 

threat of adverse action, or

• The corporation has tried repeatedly to 

contact the IRS but no one has responded, 

or the IRS hasn't responded by the date 

promised.

TAS has offices in every state, the District 

of Columbia, and Puerto Rico. Local 

advocates' numbers are in their local 

directories and at 

TaxpayerAdvocate.IRS.gov. The corporation 

can also call TAS at 1-877-777-4778.

TAS also works to resolve large-scale or 

systemic problems that affect many 

taxpayers. If the corporation knows of one of 

these broad issues, please report it to TAS 

through the Systemic Advocacy 

Management System at IRS.gov/SAMS.

For more information, go to IRS.gov/

Advocate.

General Instructions

Purpose of Form

Use Form 1120-FSC to report the income, 

gains, losses, deductions, credits, and to 

figure the income tax liability of a FSC.

FSC Repeal and 

Extraterritorial Income 

Exclusion

In general, the FSC Repeal and 

Extraterritorial Income Exclusion Act of 2000:

• Repealed the FSC rules;

• Provided taxpayers with an exclusion, 

which is figured on Form 8873, 

Extraterritorial Income Exclusion; and

• Provided transition rules for existing 

FSCs. These rules are included in Rules for 

Existing FSCs below.

Note. The American Jobs Creation Act of 

2004 repealed the extraterritorial income 

exclusion provisions generally for 

transactions after 2004, subject to a 

transition rule. See the Instructions for Form 

8873 for more information.

The Tax Increase Prevention and 

Reconciliation Act of 2005 repealed the FSC 

binding contract exception. See Binding 

contract exception below for details.

Rules for Existing FSCs

In general, a FSC that was in existence on 

September 30, 2000, and at all times 

thereafter may continue to use the FSC rules 

for any transaction in the ordinary course of 

business that is (a) before January 1, 2002, 

or (b) after December 31, 2001, if such 

transaction is pursuant to a binding contract 

that meets the requirements described in 

Binding contract exception below.

Binding contract exception. The binding 

contract exception has been repealed for tax 

years beginning after May 17, 2006. For tax 

years beginning before May 18, 2006, the 

following rules apply: The transaction must 

be pursuant to a binding contract between 

the FSC (or a person related to the FSC) and 

a person other than a related person if that 

binding contract was in effect on September 

30, 2000, and has remained in effect. A 

binding contract includes a purchase, 

renewal, or replacement option that is 

enforceable against a lessor or seller 

(provided the option is part of a contract that 

is binding and in effect on September 30, 

2000, and has remained in effect).

The mere entering into of a single 

transaction, such as a lease, would not, in 

and of itself, prevent the transaction from 

being in the ordinary course of business.

Election To Apply Exclusion Rules

Taxpayers may elect to apply the 

extraterritorial income exclusion rules instead 

Jan 24, 2024 Cat. No. 11532V
of the FSC rules for transactions occurring 

during the transition period. The election is:

• Made by checking the box on line 2 of 

Form 8873,

• Made on a transaction-by-transaction 

basis,

• Effective for the tax year for which it is 

made and for all subsequent tax years, and

• Revocable only with the consent of the 

IRS.

Taxpayers use Form 8873 to determine 

their extraterritorial income exclusion.

Election To Be Treated as a 

Domestic Corporation

A FSC that was in existence on September 

30, 2000, and at all times thereafter may 

elect to be treated as a domestic corporation 

if substantially all of its gross receipts are 

foreign trading gross receipts. A FSC that 

elects to be treated as a domestic 

corporation ceases to be a FSC for any tax 

year for which the election applies (and for 

any subsequent tax year).

The election is made by checking the box 

on line 3 of Form 8873. An electing 

corporation files Form 1120, U.S. 

Corporation Income Tax Return. Once made, 

the election applies to the tax year for which 

it is made and remains in effect for all 

subsequent years unless the election is 

revoked or terminated. If the election is 

revoked or terminated, the corporation would 

be a foreign corporation that files Form 

1120-F, U.S. Income Tax Return of a Foreign 

Corporation. Furthermore, the foreign 

corporation would not be eligible to reelect to 

be treated as a domestic corporation for 5 

tax years beginning with the first tax year for 

which the original election is not in effect as a 

result of the revocation or termination.

Effect of election. For purposes of section 

367, a foreign corporation that has elected to 

be a domestic corporation is generally 

treated as transferring, as of the first day of 

the first tax year to which the election 

applies, all of its assets to a domestic 

corporation in an exchange under section 

354.

FSC Election

No corporation may elect to be a FSC or a 

small FSC (defined below) after September 

30, 2000.

Termination of Inactive FSCs

If a FSC has no foreign trade income (see 

definition under Tax Treatment of a FSC, 

later) for any 5 consecutive tax years 

beginning after December 31, 2001, the FSC 

will no longer be treated as a FSC for any tax 

year beginning after that 5-year period.

Additional Information

For additional information regarding the rules 

discussed above, see Rev. Proc. 2001-37, 

2001-1 C.B. 1327.

Pre-Repeal FSC Rules

Definition of a Foreign Sales 

Corporation (FSC)

Under section 922(a), a FSC is defined as a 

corporation that has met all of the following 

rules:

1. It must be a corporation created or 

organized under the laws of a qualifying 

foreign country or any U.S. possession other 

than Puerto Rico.

Qualifying U.S. possessions include 

Guam, American Samoa, the 

Commonwealth of the Northern Mariana 

Islands, and the U.S. Virgin Islands.

A qualifying foreign country is a foreign 

country that meets the exchange of 

information rules of section 927(e)(3)(A) or 

(B). All U.S. possessions other than Puerto 

Rico are also certified to have met these 

rules.

The following countries are qualifying 

foreign countries that have met the exchange 

of information rules of section 927(e)(3)(A) or 

927(e)(3)(B): Australia, Austria, Barbados, 

Belgium, Bermuda, Canada, Costa Rica, 

Cyprus, Denmark, Dominica, the Dominican 

Republic, Egypt, Finland, France, Germany, 

Grenada, Guyana, Honduras, Iceland, 

Ireland, Jamaica, Korea, Malta, the Marshall 

Islands, Mexico, Morocco, the Netherlands, 

New Zealand, Norway, Pakistan, Peru, the 

Philippines, St. Lucia, Sweden, and Trinidad 

and Tobago.

2. It had no more than 25 shareholders 

at any time during the tax year.

3. It had no preferred stock outstanding 

at any time during the tax year.

4. During the tax year, the FSC must 

maintain:

• An office in one of the qualifying foreign 

countries or U.S. possessions listed above;

• A set of permanent books of account 

(including invoices) at that office; and

• The books and records required under 

section 6001 at a U.S. location to sufficiently 

establish the amount of gross income, 

deductions, credits, or other matters required 

to be shown on its tax return.

5. It must have at least one director, at 

all times during the tax year, who is not a 

resident of the United States.

6. It must not be a member, at any time 

during the tax year, of a controlled group of 

which a DISC is a member.

7. It must have elected to be a FSC or 

small FSC, and the election must have been 

in effect for the tax year.

Small FSC. Section 922(b) defines a small 

FSC as a corporation that:

• Elected small FSC status and has kept the 

election in effect for the tax year; and

• Is not a member, at any time during the 

tax year, of a controlled group that includes a 

FSC (unless that other FSC is also a

small FSC).

A small FSC is exempt from the foreign 

management and foreign economic process 

requirements outlined on this page.

$5 million limit. Generally, any foreign 

trading gross receipts of a small FSC for the 

tax year that exceed $5 million are not to be 

considered in determining its exempt foreign 

trade income. The $5 million limit is reduced 

if the small FSC has a short tax year. It may 

also be reduced if the small FSC is a 

member of a controlled group that contains 

other small FSCs. See Regulations section 

1.921-2(b) for more information.

Tax Treatment of a FSC

A FSC is not taxed on its exempt foreign 

trade income. Section 923 defines foreign 

trade income as the gross income of a FSC 

attributable to foreign trading gross receipts 

(defined below).

The percentage of foreign trade income 

exempt from tax is figured differently for 

income determined under the administrative 

pricing rules (for details, see the Instructions 

for Schedule P (Form 1120-FSC)) and 

income determined without regard to the 

administrative pricing rules. These 

percentages are computed on Schedule E, 

page 4, Form 1120-FSC, and carried over to 

lines 9a and 9b of Schedule B, page 3, Form 

1120-FSC, to figure taxable income or (loss).

See section 923(a)(4) for a special rule 

for foreign trade income allocable to a 

cooperative. See section 923(a)(5) for a 

special rule for military property.

Tax treaty benefits. A FSC may not claim 

any benefits under any income tax treaty 

between the United States and any foreign 

country.

Foreign Trading Gross Receipts

A FSC is treated as having foreign trading 

gross receipts (defined in section 924) only if 

it has met certain foreign management and 

foreign economic process requirements.

Foreign trading gross receipts do not 

include:

• Certain excluded receipts (defined in 

section 924(f)).

• Receipts attributable to property excluded 

from export property under section 927(a)(2).

• Investment income (defined in section 

927(c)).

• Carrying charges (defined in section 

927(d)(1)).

Note. Computer software licensed for 

reproduction abroad is not excluded from 

export property under section 927(a)(2). 

Therefore, receipts attributable to the sale, 

lease, or rental of computer software and 

services related and subsidiary to such 

transactions qualify as foreign trading gross 

receipts.

Foreign Management Rules

A FSC (other than a small FSC) is treated as 

having foreign trading gross receipts for the 

tax year only if the management of the FSC 

2 Instructions for Form 1120-FSC (Rev. 1-2024)
during the year takes place outside the 

United States. These management activities 

include:

• Meetings of the board of directors and 

meetings of the shareholders.

• Disbursing cash, dividends, legal and 

accounting fees, salaries of officers, and 

salaries or fees of directors from the principal 

bank account (see below).

• Maintaining the principal bank account at 

all times during the tax year.

Meetings of directors and meetings of 

the shareholders. All meetings of the 

board of directors of the FSC and all 

meetings of the shareholders of the FSC that 

take place during the tax year must take 

place outside the United States.

In addition, all such meetings must 

comply with the local laws of the foreign 

country or U.S. possession in which the FSC 

was created or organized. The local laws 

determine whether a meeting must be held, 

when and where it must be held (if it is held 

at all), who must be present, quorum 

requirements, use of proxies, etc.

Principal bank accounts. See Regulations 

section 1.924(c)-1(c) for information 

regarding principal bank accounts.

Foreign Economic Process Rules

A FSC (other than a small FSC) has foreign 

trading gross receipts from any transaction 

only if certain economic processes for the 

transaction take place outside the United 

States. Section 924(d) and Regulations 

section 1.924(d)-1 set forth the rules for 

determining whether a sufficient amount of 

the economic processes of a transaction 

takes place outside the United States.

Generally, a transaction will qualify if the 

FSC satisfies two requirements:

• Participation outside the United States in 

the sales portion of the transaction and

• Satisfaction of either the 50% or the 85% 

foreign direct cost test.

The activities comprising these economic 

processes may be performed by the FSC or 

by any other person acting under contract 

with the FSC.

Participation outside the United States in 

the sales portion of the transaction. 

Generally, the requirement of section 924(d)

(1)(A) is met for the gross receipts of a FSC 

derived from any transaction if the FSC has 

participated outside the United States in the 

following sales activities relating to the 

transaction: (1) solicitation (other than 

advertising), (2) negotiation, and (3) making 

a contract.

1. Solicitation (other than advertising) is 

any communication (including, but not limited 

to, telephone, telegraph, mail, or in person) 

by the FSC, to a specific, targeted customer 

or potential customer.

2. Negotiation is any communication by 

the FSC to a customer or potential customer 

aimed at an agreement on one or more of the 

terms of a transaction, including, but not 

limited to, price, credit terms, quantity, or time 

or manner of delivery.

3. Making a contract refers to 

performance by the FSC of any of the 

elements necessary to complete a sale, such 

as making or accepting an offer.

Grouping transactions. Generally, the 

sales activities described above are to be 

applied on a transaction-by-transaction 

basis. However, a FSC may make an annual 

election to apply any of the sales activities on 

the basis of a group. To make the election, 

check the applicable box on line 10a, 

Additional Information, on page 2 of Form 

1120-FSC. See Regulations section 

1.924(d)-1(c)(5) for details.

Satisfaction of either the 50% or 85% foreign direct cost test. To qualify as foreign 

trading gross receipts, the foreign direct 

costs incurred by the FSC attributable to the 

transaction must equal or exceed 50% of the 

total direct costs incurred by the FSC 

attributable to the transaction.

Instead of satisfying the 50% foreign 

direct cost test, the FSC may incur foreign 

direct costs attributable to activities 

described in each of two of the section 

924(e) categories. The costs must equal or 

exceed 85% of the total direct costs incurred 

by the FSC attributable to the activity 

described in each of the two categories. If no 

direct costs are incurred by the FSC in a 

particular category, that category is not taken 

into account for purposes of determining 

whether the FSC has met either the 50% or 

85% foreign direct cost test.

Direct costs are costs that:

• Are incident to and necessary for the 

performance of any activity described in 

section 924(e);

• Include the cost of materials consumed in 

the performance of the activity and the cost 

of labor that can be identified or associated 

directly with the performance of the activity 

(but only to the extent of wages, salaries, 

fees for professional services, and other 

amounts paid for services actually rendered, 

such as bonuses or compensation paid for 

services on the basis of a percentage of 

profits); and

• Include the allowable depreciation 

deduction for equipment or facilities (or the 

rental cost for its use) that can be specifically 

identified or associated with the activity, as 

well as the contract price of an activity 

performed on behalf of the FSC by a 

contractor.

Total direct costs means all of the direct 

costs of any transaction attributable to 

activities described in any paragraph of 

section 924(e). For purposes of the 50% test 

of section 924(d)(1)(B), total direct costs are 

based on the direct costs of all activities 

described in all paragraphs of section 

924(e). For purposes of the 85% test of 

section 924(d)(2), however, the total direct 

costs are determined separately for each 

paragraph of section 924(e).

Foreign direct costs means the portion 

of the total direct costs of any transaction 

attributable to activities performed outside 

the United States. For purposes of the 50% 

test, foreign direct costs are based on the 

direct costs of all activities described in all 

paragraphs of section 924(e). For purposes 

of the 85% test, however, foreign direct costs 

are determined separately for each 

paragraph of section 924(e).

For more details, see Regulations section 

1.924(d)-1(d).

Check the applicable box(es) on line 10b, 

Additional Information, on page 2 of the form, 

to indicate how the FSC met the foreign 

direct costs requirement.

Grouping transactions. Generally, the 

foreign direct cost tests under Regulations 

section 1.924(d)-1(d) are applied on a 

transaction-by-transaction basis. However, 

the FSC may make an annual election (on 

line 10d, Additional Information, on page 2 of 

the form) to apply the foreign direct cost tests 

on a customer, contract, or product or 

product line grouping basis. Any grouping 

used must be supported by adequate 

documentation of performance of activities 

and costs of activities relating to the grouping 

used. See Regulations section 1.924(d)-1(e) 

for details.

Exception for foreign military property. 

The economic process rules do not apply to 

any activities performed in connection with 

foreign military sales except those activities 

described in section 924(e). See Regulations 

section 1.924(d)-1(f) for details.

Section 925(c) Rule

To use the administrative pricing rules to 

determine the FSC's (or small FSC's) profit 

on a transaction or group of transactions, the 

FSC must perform (or contract with another 

person to perform) all of the economic 

process activities relating to the transaction 

or group of transactions. All of the direct and 

indirect expenses relating to the performance 

of those activities must be reflected on the 

books of the FSC and on Form 1120-FSC.

Under Temporary Regulations section 

1.925(a)-1T(b)(2)(ii), an election may be 

made to include on the FSC's books all 

expenses, other than cost of goods sold, that 

are necessary to figure combined taxable 

income for the transaction or group of 

transactions. The expenses must be 

identified on Schedule G on the applicable 

line.

Who Must File

File Form 1120-FSC if the corporation 

elected to be treated as a FSC or small FSC, 

and the election is still in effect.

Note. A FSC that elects to be treated as a 

domestic corporation under section 943(e)

(1) does not file Form 1120-FSC. Instead, it 

files Form 1120.

When To File

Generally, a corporation must file Form 

1120-FSC by the 15th day of the 4th month 

after the end of its tax year. A FSC that has 

Instructions for Form 1120-FSC (Rev. 1-2024) 3
dissolved must generally file by the 15th day 

of the 4th month after the date it dissolved.

However, a FSC with a fiscal tax year 

ending June 30 must file by the 15th day of 

the 3rd month after the end of its tax year. A 

FSC with a short tax year ending anytime in 

June will be treated as if the short year 

ended on June 30, and must file by the 15th 

day of the 3rd month after the end of its tax 

year.

If the due date falls on a Saturday, 

Sunday, or legal holiday, the corporation can 

file on the next business day.

Private delivery services. FSCs can use 

certain private delivery services (PDS) 

designated by the IRS to meet the “timely 

mailing as timely filing” rule for tax returns. 

Go to IRS.gov/PDS. The PDS can tell you 

how to get written proof of the mailing date.

For the IRS mailing address to use if 

you’re using PDS, go to IRS.gov/

PDSstreetAddresses.

Private delivery services cannot 

deliver items to P.O. boxes. You must 

use the U.S. Postal Service to mail 

any item to an IRS P.O. box address.

Extension of time to file. A FSC must File 

Form 7004, Application for Automatic 

Extension of Time To File Certain Business 

Income Tax, Information, and Other Returns, 

by the return due date specified earlier, to 

request an extension of time to file. See the 

Instructions for Form 7004 for additional 

information.

Where To File

File Form 1120-FSC with the:

Internal Revenue Service Center

P.O. Box 409101

Ogden, UT 84409

Who Must Sign

The return must be signed and dated by:

• The president, vice president, treasurer, 

assistant treasurer, chief accounting officer; 

or

• Any other corporate officer (such as tax 

officer) authorized to sign.

If a return is filed on behalf of a FSC by a 

receiver, trustee, or assignee, the fiduciary 

must sign the return, instead of the corporate 

officer. Returns and forms signed by a 

receiver or trustee in bankruptcy on behalf of 

a FSC must be accompanied by a copy of 

the order or instructions of the court 

authorizing signing of the return or form.

Paid Preparer Use Only section. If an 

employee of the FSC completes Form 

1120-FSC, the paid preparer section should 

remain blank. Anyone who prepares Form 

1120-FSC but does not charge the FSC 

should not complete that section. Generally, 

anyone who is paid to prepare the return 

must sign and complete the section.

The paid preparer must complete the 

required preparer information and:

• Sign the return in the space provided for 

the preparer's signature.

CAUTION

!

• Include their Preparer Tax Identification 

Number (PTIN), and

• Give a copy of the return to the taxpayer.

Note. A paid preparer may sign original or 

amended returns by rubber stamp, 

mechanical device, or computer software 

program.

Paid Preparer 

Authorization

If the FSC wants to allow the IRS to discuss 

its tax return with the paid preparer who 

signed it, check the “Yes” box in the signature 

area of the return. This authorization applies 

only to the individual whose signature 

appears in the “Paid Preparer Use Only” 

section of the return. It does not apply to the 

firm, if any, shown in that section.

If the “Yes” box is checked, the FSC is 

authorizing the IRS to call the paid preparer 

to answer any questions that may arise 

during the processing of its return. The FSC 

is also authorizing the paid preparer to:

• Give the IRS any information that is 

missing from the return;

• Call the IRS for information about the 

processing of the return or the status of any 

related refund or payment(s); and

• Respond to certain IRS notices about 

math errors, offsets, and return preparation.

The FSC is not authorizing the paid 

preparer to receive any refund check, bind 

the FSC to anything (including any additional 

tax liability), or otherwise represent the FSC 

before the IRS.

The authorization will automatically end 

no later than the due date (excluding 

extensions) for filing the FSC's tax return. If 

the FSC wants to expand the paid preparer's 

authorization or revoke the authorization 

before it ends, see Pub. 947, Practice Before 

the IRS and Power of Attorney.

Other Forms That May Be 

Required

The FSC may have to file some of the forms 

listed below. See the form for more 

information.

For a list of additional forms the FSC may 

need to file (most notably, forms pertaining to 

the reporting of various types of income, and 

any related withholding, to U.S. persons, 

foreign persons, and the IRS), see Pub. 542, 

Corporations.

• Form 5471, Information Return of U.S. 

Persons With Respect to Certain Foreign 

Corporations. This form may have to be filed 

by certain U.S. officers, directors, or 

shareholders of a FSC to report changes in 

ownership (see sections 6046 and the 

related regulations).

If a Form 1120-FSC is filed, Form 5471 is 

not required to be filed to satisfy the 

requirements of section 6038 (see 

Temporary Regulations section 1.921-1T(b)

(3)). However, certain U.S. shareholders may 

be required to file Form 5471 and the 

applicable schedules to report subpart F 

income.

See the Instructions for Form 5471 for 

more information.

• Form 5472, Information Return of a 25% 

Foreign-Owned U.S. Corporation or a 

Foreign Corporation Engaged in a U.S. Trade 

or Business. This form is filed by or for a 

foreign corporation engaged in a U.S. trade 

or business that had reportable transactions 

with a related party. See the Instructions for 

Form 5472 for filing instructions and 

information about penalties.

• Form 5713, International Boycott Report. 

FSCs that had operations in, or related to, 

certain “boycotting” countries file

Form 5713.

• Form 8275, Disclosure Statement, and 

Form 8275-R, Regulation Disclosure 

Statement. Use these forms to disclose 

items or positions taken on a tax return that 

are not otherwise adequately disclosed on a 

tax return or that are contrary to Treasury 

regulations (to avoid parts of the 

accuracy-related penalty or certain preparer 

penalties).

• Form 8300, Report of Cash Payments 

Over $10,000 Received in a Trade or 

Business. Use this form to report the receipt 

of more than $10,000 in cash or foreign 

currency in one transaction or a series of 

related transactions.

Assembling the Return

To ensure that the FSC's tax return is 

correctly processed, attach all schedules 

and other forms after page 6 of Form 

1120-FSC, in the following order:

1. Form 4136.

2. Additional schedules in alphabetical 

order.

3. Additional forms in numerical order.

4. Supporting statements and 

attachments.

Complete every applicable entry space 

on Form 1120-FSC. Do not enter “See 

Attached” or “Available Upon Request” 

instead of completing the entry spaces. If 

more space is needed on the forms or 

schedules, attach separate sheets using the 

same size and format as the printed forms.

If there are supporting statements and 

attachments, arrange them in the same order 

as the schedules or forms they support and 

attach them last. Show the totals on the 

printed forms. Enter the FSC's name and EIN 

on each supporting statement or attachment.

Accounting Methods

In general, figure taxable income using the 

method of accounting used in keeping the 

FSC's books and records. In all cases, the 

method used must clearly show taxable 

income. Permissible overall methods of 

accounting include cash, accrual, or any 

other method authorized by the Internal 

Revenue Code.

Generally, the following rules apply. For 

more information, see Pub. 538, Accounting 

Periods and Methods.

4 Instructions for Form 1120-FSC (Rev. 1-2024)
• A FSC cannot use the cash method of 

accounting unless it is a small business 

taxpayer (defined later). A tax shelter 

(defined in section 448(d)(3)) may never use 

the cash method. See sections 448(a)(1) 

through (a)(3). However, see Nonaccrual 

experience method for service providers, 

later.

• Unless it is a small business taxpayer 

(defined below), a FSC must use an accrual 

method for sales and purchases of inventory 

items. See the instructions for Form 1125-A.

• A corporation engaged in farming must 

use an accrual method. For exceptions, see 

section 447 and Pub. 225.

• Special rules apply to long-term contracts. 

See section 460.

Small business taxpayer. For tax years 

beginning in 2023, a FSC qualifies as a small 

business taxpayer if (a) it has average annual 

gross receipts of $29 million or less for the 3 

prior tax years, and (b) is not a tax shelter (as 

defined in section 448(d)(3)).

A small business taxpayer can account 

for inventory by (a) treating the inventory as 

non-incidental materials and supplies, or (b) 

conforming to its treatment of inventory in an 

applicable financial statement (as defined in 

section 451(b)(3)). If it does not have an 

applicable financial statement, it can use the 

method of accounting used in its books and 

records prepared according to its accounting 

procedures.

Change in accounting method. Generally, 

an FSC must get IRS consent to change 

either an overall method of accounting or the 

accounting treatment of any material item for 

income tax purposes. To obtain consent, the 

corporation must generally file Form 3115, 

Application for Change in Accounting 

Method, during the tax year for which the 

change is requested. See the Instructions for 

Form 3115 and Pub. 538 for more 

information and exceptions. Also see the 

Instructions for Form 3115 for procedures 

that may apply for obtaining automatic 

consent to change certain methods of 

accounting, non-automatic change 

procedures, and reduced Form 3115 filing 

requirements.

Section 481(a) adjustment. If the 

FSC’s taxable income for the current tax year 

is figured under a method of accounting 

different from the method used in the 

preceding tax year, the corporation may have 

to make an adjustment under section 481(a) 

to prevent amounts of income or expense 

from being duplicated or omitted. The 

section 481(a) adjustment period is generally 

1 year for a net negative adjustment and 4 

years for a net positive adjustment. See the 

Instructions for Form 3115.

Exceptions to the general section 481(a) 

adjustment period may apply. Also, in some 

cases, a corporation can elect to modify the 

section 481(a) adjustment period. The 

corporation may have to complete the 

appropriate lines of Form 3115 to make an 

election. See the Instructions for Form 3115 

for more information and exceptions.

If the net section 481(a) adjustment is 

positive, report the ratable portion on Form 

1120-FSC, page 4, Schedule F, line 16, as 

other income. If the net section 481(a) 

adjustment is negative, report the ratable 

portion on Form 1120-FSC, page 4, 

Schedule F, line 18, as a deduction.

Accounting Period

A FSC must figure its taxable income on the 

basis of a tax year. A tax year is the annual 

accounting period a FSC uses to keep its 

records and report its income and expenses. 

Generally, FSCs may use a calendar year or 

a fiscal year. Personal service corporations, 

however, must generally use a calendar year.

Note. The tax year of a FSC must be the 

same as the tax year of the principal 

shareholder which, at the beginning of the 

FSC tax year, has the highest percentage of 

voting power. If two or more shareholders 

have the highest percentage of voting power, 

the FSC must have a tax year that conforms 

to the tax year of any such shareholder. See 

section 441(h).

Rounding Off to Whole 

Dollars

The FSC may enter decimal points and cents 

when completing its return. However, the 

corporation should round off cents to whole 

dollars on its return, forms, and schedules to 

make completing its return easier. The 

corporation must either round off all amounts 

on its return to whole dollars or use cents for 

all amounts. To round, drop amounts under 

50 cents and increase amounts from 50 to 99 

cents to the next dollar. For example, $8.40 

rounds to $8 and $8.50 rounds to $9.

If two or more amounts must be added to 

figure the amount to enter on a line, include 

cents when adding the amounts and round 

off only the total.

Recordkeeping

Keep the FSC's records for as long as they 

may be needed for the administration of any 

provision of the Internal Revenue Code. 

Usually, records that support an item of 

income, deduction, or credit on the return 

must be kept for 3 years from the date the 

return is due or filed, whichever is later. Keep 

records that verify the FSC's basis in 

property for as long as they are needed to 

figure the basis of the original or replacement 

property.

The FSC should keep copies of all filed 

returns. They help in preparing future and 

amended returns and in the calculation of 

earnings and profits.

Tax Payments

The FSC must pay any tax due in full no later 

than the due date for filing Form 1120-FSC 

(not including extensions). See When To 

File, earlier, for this due date. The method for 

payment of the tax due depends upon 

whether the FSC has an office or place of 

business in the United States.

FSCs that do not maintain an office or 

place of business in the United States can 

use the Electronic Federal Tax Payment 

System (EFTPS) to pay the tax due provided 

the FSC has a U.S. bank account. If the FSC 

does not have a U.S. bank account, it may 

arrange for a financial institution to initiate a 

same-day payment on its behalf or it can 

arrange for a qualified intermediary, tax 

professional, payroll service, or other trusted 

third party to make a deposit on its behalf 

using a master account. In addition, the FSC 

still has the option to pay by check or money 

order, payable to “United States Treasury.” To 

help ensure proper crediting, write the FSC's 

EIN, “Form 1120-FSC,” and the tax period to 

which the payment applies on the check or 

money order. Enclose the payment when 

Form 1120-FSC is filed.

FSCs that do maintain an office or place 

of business in the United States must pay the 

tax due by electronic funds transfer. The FSC 

can pay the tax using EFTPS or it can 

arrange for its tax professional, financial 

institution, payroll service, or other trusted 

third party to make deposits on its behalf. In 

addition, the FSC also has the option to 

arrange for its financial institution to initiate a 

same-day payment.

Note. If the due date falls on a Saturday, 

Sunday, or legal holiday, the payment is due 

on the next day that isn't a Saturday, Sunday, 

or legal holiday.

Electronic Deposit Requirement

FSCs with an office or place of business in 

the United States must use electronic funds 

transfers to make all federal tax deposits 

(such as deposits of employment and 

corporate income tax). Generally, electronic 

funds transfers are made using EFTPS. 

However, if the corporation does not want to 

use EFTPS, it can arrange for its tax 

professional, financial institution, payroll 

service, or other trusted third party to make 

deposits on its behalf. Also, it can arrange for 

its financial institution to submit a same-day 

payment (discussed below) on its behalf. 

EFTPS is a free service provided by the 

Department of the Treasury. Services 

provided by a tax professional, financial 

institution, payroll service, or other third party 

may have a fee.

For more information about EFTPS or to 

enroll in EFTPS, visit EFTPS.gov, or call 

1-800-555-4477 (TTY/TDD 

1-800-733-4829).

Depositing on time. For any deposit made 

by EFTPS to be on time, the FSC must 

submit the deposit by 8 p.m. Eastern time the 

day before the date the deposit is due. If the 

FSC uses a third party to make deposits on 

its behalf, they may have different cutoff 

times.

Same-day wire payment option. If the 

FSC fails to submit a deposit transaction on 

EFTPS by 8 p.m. Eastern time the day before 

the date a deposit is due, it can still make the 

deposit on time by using the Federal Tax 

Collection Service (FTCS). To use the 

same-day wire payment option, the FSC will 

Instructions for Form 1120-FSC (Rev. 1-2024) 5
need to make arrangements with its financial 

institution ahead of time regarding 

availability, deadlines, and costs. Financial 

institutions may charge a fee for payments 

made this way. To learn more about the 

information the FSC will need to provide to its 

financial institution to make a same-day wire 

payment, go to IRS.gov/SameDayWire.

Estimated Tax Payments

Generally, the following rules apply to the 

FSC's payments of estimated tax.

• The FSC must make installment payments 

of estimated tax if it expects its total tax for 

the year (less applicable credits) to be $500 

or more.

• The installments are due by the 15th day 

of the 4th, 6th, 9th, and 12th months of the 

tax year. If any date falls on a Saturday, 

Sunday, or legal holiday, the installment is 

due on the next regular business day.

• If the FSC maintains an office or place of 

business in the United States, it must use 

electronic funds transfer to make installment 

payments of estimated tax.

• If the FSC does not maintain an office or 

place of business in the United States, it can 

pay the estimated tax by EFTPS, providing it 

has a U.S. bank account. The FSC can also 

arrange for its financial institution to submit a 

same-day payment on its behalf or can 

arrange for its qualified intermediary, tax 

professional, payroll service, or other trusted 

third party to make a deposit on its behalf 

using a master account. In addition, the FSC 

still has the option to pay the estimated tax 

due by check or money order.

• Penalties may apply if the corporation 

does not make required estimated tax 

payment deposits. See line 3, Estimated tax 

penalty, later.

• If the FSC overpaid estimated tax, it may 

be able to get a quick refund by filing Form 

4466, Corporation Application for Quick 

Refund of Overpayment of Estimated Tax.

See section 6655 for more information on 

how to figure estimated taxes.

Interest and Penalties

Interest. Interest is charged on taxes paid 

late even if an extension of time to file is 

granted. Interest is also charged on penalties 

imposed for failure to file, negligence, fraud, 

substantial valuation misstatements, 

substantial understatements of tax, and 

reportable transaction understatements from 

the due date (including extensions) to the 

date of payment. The interest charge is 

figured at a rate determined under section 

6621.

Penalty for late filing of return. A FSC 

that does not file its tax return by the due 

date, including extensions, may be penalized 

5% of the unpaid tax for each month or part 

of a month the return is late, up to a 

maximum of 25% of the unpaid tax. The 

minimum penalty for a tax return required to 

be filed in 2024 that is more than 60 days late 

is the smaller of the tax due or $485. The 

penalty will not be imposed if the FSC can 

show that the failure to file on time was due 

to reasonable cause.

If you believe that reasonable cause 

exists, do not attach an explanation 

when you file Form 1120-FSC. 

Instead, if the FSC receives a penalty notice 

after the return is filed, send the IRS an 

explanation at that time and the IRS will 

determine if the FSC meets 

reasonable-cause criteria.

Penalty for late payment of tax. A FSC 

that does not pay the tax when due generally 

may be penalized 1/2 of 1% of the unpaid tax 

for each month or part of a month the tax is 

not paid, up to a maximum of 25% of the 

unpaid tax. The penalty will not be imposed if 

the FSC can show that the failure to pay on 

time was due to reasonable cause. See 

Caution, above.

Trust fund recovery penalty. This penalty 

may apply if certain income, social security, 

and Medicare taxes that must be collected or 

withheld are not collected or withheld, or 

these taxes are not paid. These taxes are 

generally reported on Form 941, Employer's 

QUARTERLY Federal Tax Return, or Form 

945, Annual Return of Withheld Federal 

Income Tax.

The trust fund recovery penalty may be 

imposed on all persons who are determined 

by the IRS to have been responsible for 

collecting, accounting for, or paying over 

these taxes, and who acted willfully in not 

doing so. The penalty is equal to the full 

amount of the unpaid trust fund tax. See Pub. 

15 (Circular E), Employer's Tax Guide, for 

details, including the definition of responsible 

persons.

Other penalties. Other penalties may be 

imposed for negligence, substantial 

understatement of tax, reportable transaction 

understatements, and fraud. See sections 

6662, 6662A, and 6663.

A FSC may also be subject to a penalty 

(under section 6686) of:

• $100 for each failure to supply 

information, up to $25,000 during the 

calendar year.

• $1,000 for not filing a return.

The section 6686 penalties will not apply 

if the FSC can show that the failure was due 

to reasonable cause. However, see Caution, 

above.

Specific Instructions

Period covered. Enter the FSC ‘s tax year 

in the space provided at the top of the form. 

See Accounting Period, earlier.

Name. Print or type the FSC's true name (as 

set forth in the charter or other legal 

document creating it).

Address. Enter the U.S. address where the 

FSC maintains the records required under 

section 6001. Include the suite, room, or 

other unit number after the street address. If 

the post office does not deliver mail to the 

CAUTION

!

street address and the FSC has a P.O. box, 

show the box number instead.

If the FSC receives its mail in care of a 

third party (such as an accountant or an 

attorney), enter “C/O” on the street address 

line followed by the third party's name and 

street address or P.O. box.

Item A. Foreign country or U.S. possession of incorporation. See Definition of a 

Foreign Sales Corporation (FSC), earlier.

Item E. Total assets. Enter the FSC's total 

assets (as determined by the accounting 

method regularly used in keeping the FSC's 

books and records) at the end of the tax year 

from Form 1120-FSC, page 6, Schedule L, 

column (d), line 15. If there are no assets at 

the end of the tax year, enter -0-.

Item F. Final return, name change, address change, or amended return. 

• If this is the FSC's final return and it will no 

longer exist, check the “Final return” box.

• If the FSC changed its name since it last 

filed a return, check the box for “Name 

change.” Generally, a FSC must also have 

amended its articles of incorporation and 

filed the amendment with the jurisdiction in 

which it was incorporated.

• If the FSC has changed its address since 

it last filed a return (including a change to an 

“in care of” address), check the box for 

“Address change.”

Note. If a change of address or responsible 

party occurs after the return is filed, use 

Form 8822-B, Change of Address or 

Responsible Party - Business, to notify the 

IRS. See the instructions for Form 8822-B for 

details.

• If the FSC is amending its return, check 

the box for “Amended return.”

FSC Information

Line 1. Principal shareholder. Complete 

lines 1a through 1h for the shareholder 

(individual, corporation, partnership, trust, or 

estate) that was the principal shareholder at 

the beginning of the FSC's tax year. See the 

Note under Accounting Period, earlier.

Foreign address. Enter the information 

in the following order: city or town, state or 

province, country, and foreign postal code. 

Follow the country's practice for entering the 

name of the state or province and postal 

code. Do not abbreviate the country name.

Line 2. Parent-subsidiary controlled 

group. If the FSC is a subsidiary in a 

parent-subsidiary controlled group and the 

principal shareholder is not the common 

parent of the group, complete lines 2a 

through 2g for the common parent. Enter the 

consolidated total assets on line 2d for a 

group that files a consolidated return; 

otherwise, enter only the common parent's 

total assets.

Note. Check the “Yes” box on line 2 if the 

FSC is a subsidiary in a parent-subsidiary 

controlled group. This applies even if the 

6 Instructions for Form 1120-FSC (Rev. 1-2024)
FSC is a subsidiary member of one group 

and the parent corporation of another.

A “parent-subsidiary controlled group” is 

one or more chains of corporations 

connected through stock ownership 

(sections 927(d)(4) and 1563(a)(1)). Both of 

the following requirements must be met:

1. More than 50% of the total combined 

voting power of all classes of stock entitled to 

vote or more than 50% of the total value of all 

classes of stock of each corporation in the 

group (except the parent) must be owned by 

one or more of the other corporations in the 

group.

2. The common parent must own more 

than 50% of the total combined voting power 

of all classes of stock entitled to vote or more 

than 50% of the total value of all classes of 

stock of at least one of the other corporations 

in the group.

Stock owned directly by other members 

of the group is not counted when computing 

the voting power or value.

See sections 927(d)(4) and 1563(d)(1) for 

the definition of “stock” for purposes of 

determining stock ownership above.

Tax and Payments

Line 2h. Backup withholding. If the FSC 

had income tax withheld from any payments 

it received due to backup withholding, 

include the amount withheld in the total for 

line 2h. Show the amount withheld in the 

blank space in the right-hand column 

between lines 1 and 2h, and write “backup 

withholding.”

Note. Do not include backup withholding 

amounts on line 2g. Include on line 2g only 

amounts withheld under Chapter 3 or 4 of the 

Code.

Line 3. Estimated tax penalty. A FSC that 

does not make estimated tax payments 

when due may be subject to an 

underpayment penalty for the period of 

underpayment. Generally, a FSC is subject to 

the penalty if its tax liability is $500 or more 

and it did not timely pay at least the smaller 

of:

• Its tax liability for the current year, or

• Its prior year's tax.

Use Form 2220, Underpayment of 

Estimated Tax by Corporations, to see if the 

FSC owes a penalty and to figure the amount 

of the penalty. If Form 2220 is completed, 

enter the penalty on line 3, Estimated tax 

penalty.

Schedule A

Complete Schedule A only for the cost of 

goods sold deduction related to foreign 

trading gross receipts reported on lines 1 

through 5 of Schedule B.

Complete column (a) to show the cost of 

goods sold for inventory acquired in 

transactions using the administrative pricing 

rules. Complete column (b) to show the cost 

of goods sold for inventory acquired in 

transactions that did not use the 

administrative pricing rules. For details on 

the administrative pricing rules, see the 

Instructions for Schedule P (Form 

1120-FSC).

If the FSC acts as another person's 

commission agent on a sale, do not enter 

any amount on Schedule A for the sale.

Small FSCs will have to make two 

separate computations for cost of goods sold 

if their foreign trading gross receipts exceed 

the limitation amount on line 6e of 

Schedule B. In this case, a deduction for cost 

of goods sold will be figured separately for 

the income on line 6h of Schedule B, and 

separately for the income on line 7 of 

Schedule F.

Inventories

Generally, unless you are a small business 

taxpayer, inventories are required at the 

beginning and end of each tax year if the 

purchase or sale of merchandise is an 

income-producing factor. See Regulations 

section 1.471-1. Additionally, if inventories 

are required, you generally must use an 

overall accrual method of accounting.

If a FSC is a small business taxpayer 

(defined below), it may adopt or change its 

accounting method to account for inventories 

in the same manner as materials and 

supplies that are non-incidental, or conform 

to the FSC's treatment of inventories in an 

applicable financial statement (as defined in 

section 451(b)(3)), or if the FSC does not 

have an applicable financial statement, the 

method of accounting used in the FSC's 

books and records prepared in accordance 

with the FSC's accounting procedures. 

Changing an accounting method generally 

requires IRS consent. See the Change in 

accounting method section, earlier.

Small business taxpayer. For tax years 

beginning in 2023, a FSC qualifies as a small 

business taxpayer if (a) it has average annual 

gross receipts of $29 million or less for the 3 

prior tax years, and (b) is not a tax shelter (as 

defined in section 448(d)(3)).

All FSCs should see Section 263A 

uniform capitalization rules in the instructions 

for Schedule G, later. See those instructions 

before completing Schedule A.

If the FSC uses intercompany pricing 

rules (for purchases from a related supplier), 

use the transfer price figured in Part II of 

Schedule P (Form 1120-FSC).

Line 1. Inventory at beginning of year. If 

the FSC is changing its method of 

accounting for the current tax year, it must 

refigure last year's closing inventory using its 

new method of accounting and enter the 

result on line 1. If there is a difference 

between last year's closing inventory and the 

refigured amount, attach an explanation and 

take it into account when figuring the FSC's 

section 481(a) adjustment (explained 

earlier).

Line 4. Additional section 263A costs. If 

the FSC has elected a simplified method of 

accounting, enter on line 4 the balance of 

section 263A costs paid or incurred during 

the tax year not includible on lines 2, 3, and 

5.

Line 5. Other costs. Enter on line 5 any 

costs paid or incurred during the tax year not 

entered on lines 2 through 4. Attach a 

statement listing details of the costs.

Line 7. Inventory at end of year. See 

Regulations sections 1.263A-1 through 

1.263A-3 for details on determining the 

amount of additional section 263A costs to 

be included in ending inventory.

Lines 9a through 9f. Inventory valuation 

methods. Inventories may be valued at:

• Cost,

• Cost or market value (whichever is lower), 

or

• Any other method approved by the IRS 

that conforms to the requirements of the 

applicable regulations.

FSCs that use erroneous valuation 

methods must change to a method permitted 

for federal income tax purposes. To make 

this change, use Form 3115. See the 

Instructions for Form 3115. Also see Pub. 

538.

Line 9a. Method of valuing closing inventory. On line 9a, check the method(s) used 

for valuing inventories. Under lower of cost or 

market, the term “market” (for normal goods) 

means the current bid price prevailing on the 

inventory valuation date for the particular 

merchandise in the volume usually 

purchased by the taxpayer. If section 263A 

applies to the taxpayer, the basic elements of 

cost must reflect the current bid price of all 

direct costs and all indirect costs properly 

allocable to goods on hand at the inventory 

date.

Inventory may be valued below cost when 

the merchandise is unsalable at normal 

prices or unusable in the normal way 

because the goods are subnormal due to 

damage, imperfections, shop wear, etc. The 

goods may be valued at the bona fide selling 

price, minus direct cost of disposition (but 

not less than scrap value). Bona fide selling 

price means actual offering of goods during a 

period ending not later than 30 days after 

inventory date.

Lines 9c and 9d. LIFO method. If this is 

the first year the Last-in, First-out (LIFO) 

inventory method was either adopted or 

extended to inventory goods not previously 

valued under the LIFO method provided in 

section 472, attach Form 970, Application To 

Use LIFO Inventory Method, or a statement 

with the information required by Form 970. 

Also check the LIFO box on line 9c. On 

line 9d, enter the amount of total closing 

inventories computed under section 472. 

Estimates are acceptable.

If the FSC changed or extended its 

inventory method to LIFO and had to write up 

the opening inventory to cost in the year of 

election, report the effect of the write-up as 

other income (as appropriate on Form 

1120-FSC, Schedule F, line 16), 

proportionately over a 3-year period that 

begins with the year of the LIFO election.

Instructions for Form 1120-FSC (Rev. 1-2024) 7
For more information on inventory 

valuation methods, see Pub. 538. For more 

information on changes in the method of 

accounting for inventory, see Form 3115 and 

the Instructions for Form 3115.

Additional Information

Line 2. Enter any tax-exempt interest 

received or accrued. Include any 

exempt-interest dividends received as a 

shareholder in a mutual fund or other 

regulated investment company. Also include 

this amount on Schedule M-1, line 7a.

Line 5. If the FSC owned at least a 10% 

interest, directly or indirectly, in any foreign 

partnership, attach a statement listing the 

following information for each foreign 

partnership. For this purpose, a foreign 

partnership includes an entity treated as a 

foreign partnership under Regulations 

section 301.7701-2 or 301.7701-3.

1. Name and EIN (if any) of the foreign 

partnership;

2. Identify which, if any, of the following 

forms the foreign partnership filed for its tax 

year ending with or within the FSC's tax year: 

Form 1042, 1065, or 8804;

3. Name of the partnership 

representative (if any); and

4. Beginning and ending dates of the 

foreign partnership's tax year.

Line 6. Generally, if the FSC has a net 

operating loss (NOL) for the current tax year, 

it can elect to waive the entire carryback 

period for the NOL and instead carry the 

NOL forward to future tax years. To do so, 

check the box on line 6 and file the tax return 

by its due date, including extensions. Do not 

attach the statement described in Temporary 

Regulations section 301.9100-12T. Generally 

once made, the election is irrevocable.

If the FSC timely filed its return for the 

loss year without making the election, it can 

make the election on an amended return filed 

within 6 months of the due date of the loss 

year return (excluding extensions). Attach the 

election to the amended return and write 

"Filed pursuant to section 301.9100-2" on 

the election statement. See the Instructions 

for Form 1139.

Line 7. Enter the amount of the NOL 

carryover to the tax year from prior years, 

even if some of the loss is used to offset 

income on this return. The amount to enter is 

the total of all NOLs generated in prior years 

but not used to offset income (either as a 

carryback or carryover) to a tax year prior to 

the current tax year. Do not reduce the 

amount by any NOL deduction reported on 

line 19a, Part II, of Schedule B.

Lines 8c and 9b(2). See Definition of a 

Foreign Sales Corporation (FSC), earlier, for 

definitions of qualifying foreign country and 

U.S. possession.

Line 9. All FSCs (except small FSCs) must 

answer these questions. For more 

information, see Foreign Management Rules, 

earlier.

Line 10. All FSCs (except small FSCs) must 

answer these questions. On line 10b, 

indicate how the FSC met the foreign direct 

costs requirement of section 924(d) for all 

transactions that generated foreign trading 

gross receipts reported on lines 1 through 5 

of Schedule B. Also, complete line 10a

and/or line 10d to make an election to use 

either of the annual grouping election(s) 

indicated. See Foreign Economic Process 

Rules, earlier, for details.

Schedule B

Use Schedule B to compute taxable income 

from all sources.

Part I

Use Part I to compute net income attributable 

to nonexempt foreign trade income. Income 

and expenses on lines 1 through 15 are 

reported in column (a) if the administrative 

pricing rules were used in the transaction 

that produced the income.

Report in column (b) all foreign trade 

income from all transactions in which the 

administrative pricing rules were not used. 

Attach a statement that shows the 

computation of the taxable and nontaxable 

income included on line 15, column (b). 

Include only the taxable amount on line 16.

Nonaccrual experience method for service providers. Accrual method FSCs are 

not required to accrue certain amounts to be 

received from the performance of services 

that, based on their experience, will not be 

collected, if:

• The services are in the fields of health, 

law, engineering, architecture, accounting, 

actuarial science, performing arts, or 

consulting; or

• The FSC meets the section 448(c) gross 

receipts test for all prior years.

This provision does not apply to any 

amount if interest is required to be paid on 

the amount or if there is any penalty for 

failure to timely pay the amount. See 

Regulations section 1.448-3 for more 

information on the nonaccrual experience 

method, including information on safe harbor 

methods.

FSCs that qualify to use the nonaccrual 

experience method should attach a 

statement showing total gross receipts, the 

amount not accrued because of the 

application of section 448(d)(5), and the net 

amount accrued. Enter the net amount on 

the applicable line of Schedule B.

Lines 1 through 5. Enter the foreign trading 

gross receipts requested on lines 1 through 

5. See section 924 and Foreign Trading 

Gross Receipts, earlier, for receipts that are 

excluded and other details. Report 

commission income on line 1 or line 2 based 

on the sale, lease, or rental of property on 

which that commission arose.

Line 5. If the 50% gross receipts test of 

section 924(a)(5) is not met, report the FSC's 

gross receipts that would have otherwise 

qualified under that section on line 16, 

Schedule F, instead of line 5,

Schedule B.

Lines 6b through 6h. See section 924(b)

(2)(B) for the rules regarding the limitation on 

the amount of foreign trading gross receipts 

that a small FSC can take into account in 

determining its exempt foreign trade income.

Line 6d. Temporary Regulations section 

1.921-1T(b)(5) indicates that, in the case of a 

small FSC having a short tax year, the dollar 

limitation reported on line 6b or 6c is to be 

prorated on a daily basis. A small FSC 

having a short tax year must divide the 

number of days in its short tax year by the 

number of days that would have made up a 

full tax year and enter the resulting fraction 

on line 6d as a decimal less than 1.00000.

Example. For its 2023 calendar year tax 

year, a small FSC has a short tax year of 73 

days. The FSC enters 0.20 (73/365) on

line 6d.

Line 6f. If commission income is reported in 

the total for line 6a of Schedule B, total 

receipts for purposes of line 6f are figured as 

follows:

1. Enter total of columns (a) and 

(b), line 6a, Schedule B .... 1.

2. Enter total commission income 

reported on line 1 and line 2, 

Schedule B ........... 2.

3. Subtract line 2 from line 1 ... 3.

4. With respect to the commission 

income reported on line 2 above, 

enter total gross receipts on the 

sale, lease, or rental of property 

on which the commission income 

arose (section 927(b)(2)) ... 4.

5. Add lines 3 and 4. Enter here and 

on line 6f, Schedule B ..... 5.

Line 6h. When making the line 6h 

allocation, allocate only the commission 

income from the gross receipts on line 4 

above. If the small FSC's foreign trading 

gross receipts for the tax year (line 6f, 

Schedule B) exceed its allowable limitation 

(line 6e, Schedule B), the small FSC may 

select the gross receipts to which the 

limitation is allocated. In such a case, 

allocate the amount on line 6g between 

columns (a) and (b) on line 6h based on 

whether the administrative pricing rules were 

used for the gross receipts selected. See 

Regulations section 1.921-2(b), Q&A-4.

Part II

Line 19a. Net operating loss deduction. 

A FSC may use the NOL incurred in one tax 

year to reduce its taxable income in another 

tax year. Enter on line 19a the total NOL 

carryovers from other tax years, but do not 

enter more than the FSC's taxable income 

(after the dividends-received deduction). 

Attach a statement showing the computation 

of the NOL deduction. Also complete line 7 

in Additional Information on page 2 of the 

form.

8 Instructions for Form 1120-FSC (Rev. 1-2024)
For more details on the NOL deduction, 

see section 172 and the Instructions for Form 

1139.

Line 19b. Dividends-received deduction. 

A FSC may be entitled to a deduction for 

dividends it receives from other corporations. 

Complete the worksheet on page 12 using 

the Instructions for Dividends and 

Dividends-Received Deduction Worksheet, 

later. Attach the completed worksheet to 

Form 1120-FSC.

Line 20. Taxable income or (loss). If 

line 20 is zero or less, the FSC may have an 

NOL that may be carried back or forward as 

a deduction to other tax years.

Only farming losses can be carried back. 

The carryback period for these losses is 2 

years. For NOLs that can be carried back, 

the FSC can elect to waive the carryback 

period and instead carry the NOL forward to 

future tax years.

See the instructions for Additional 

Information, line 6, earlier, for information on 

making the election to waive the entire 

carryback period for farming losses. See the 

Instructions for Form 1139 for other special 

rules and elections.

See section 172 for additional 

information.

Schedule E

For purposes of the Note at the top of 

Schedule E, a C corporation is a corporation 

other than an S corporation. Shareholders, 

other than C corporations, are individuals, 

partnerships, S corporations, trusts, and 

estates.

Use lines 2a through 2d to figure the 

exemption percentage for foreign trade 

income determined by not using the 

administrative pricing rules. See section 

923(a)(2).

Use lines 3a through 3d to figure the 

exemption percentage for foreign trade 

income that was determined by using the 

administrative pricing rules (see section 

923(a)(3)). If a qualified cooperative is a 

shareholder of the FSC, see section 923(a)

(4).

Schedule F

Part I

Enter net income from nonexempt foreign 

trade income and related expenses in Part I.

Line 2. Enter FSC income that resulted from 

the FSC's cooperation with an international 

boycott. See section 927(e)(2) and Form 

5713 and related schedules and instructions.

Line 3. Enter the amount, if any, of illegal 

payments, bribes, or kickbacks that the FSC 

paid, directly or indirectly, to government 

officials, employees, or agents. See section 

927(e)(2).

Line 5. See the instructions for Schedule A 

before completing this line.

Part II

Enter the taxable portion of gross income of 

the FSC that was not derived from foreign 

trading gross receipts. This type of income 

includes:

• Small FSCs only. Amounts specifically 

excluded from foreign trade income because 

of the small FSC limitation (the amount by 

which line 6f of Schedule B exceeds line 6e 

of Schedule B). (Enter the excess, if any, on 

line 7 of Schedule F.)

• Investment type income. (Enter on lines 8 

through 12 of Schedule F.)

• Income from property that is subsidized, 

deemed in short supply, or destined for use 

in the United States. (Enter on lines 13 and 

14 of Schedule F.)

• Amounts from transactions that did not 

meet the foreign economic process 

requirements. (Enter on line 15 of

Schedule F.)

• Other nonforeign trade income. (Enter on 

line 16 of Schedule F.)

For more details, see sections 924(f) and 

927(a)(2) and (3).

Line 9. See the Dividends and 

Dividends-Received Deduction Worksheet, 

later, to figure the total dividends to report on 

line 9. Attach the completed worksheet to 

Form 1120-FSC.

Line 18. Enter the deductions allocated or 

apportioned to line 17 income. Attach to 

Form 1120-FSC a statement listing each 

type of deduction. Show deductions related 

to cost of goods sold separately. See the 

instructions for Schedule A, earlier, before 

completing this line.

Passive activity limitations. Section 469 

generally limits the deduction of passive 

activity losses for closely held FSCs and 

FSCs that are personal service corporations. 

See section 469 and the Instructions for 

Form 8810 for details.

Instructions for Dividends

and Dividends-Received

Deduction Worksheet

For purposes of the 20% ownership test on 

lines 1 through 7, the percentage of stock 

owned by the FSC is based on voting power 

and value of the stock.

Line 1, Column (a)

Enter dividends (except those received on 

certain debt-financed stock acquired after 

July 18, 1984–see section 246A) that:

• Are received from less-than-20%-owned 

domestic corporations subject to income tax, 

and

• Qualify for the 50% deduction under 

section 243(a)(1).

Also include on line 1 dividends (except 

those received on certain debt-financed 

stock acquired after July 18, 1984) from a 

regulated investment company (RIC). The 

amount of dividends eligible for the 

dividends-received deduction under section 

243 is limited by section 854(b). The FSC 

should receive a notice from the RIC 

specifying the amount of dividends that 

qualify for the deduction.

Report so-called dividends or earnings 

received from mutual savings banks, etc., as 

interest. Do not treat them as dividends.

Line 2, Column (a)

Enter dividends (except those received on 

certain debt-financed stock acquired after 

July 18, 1984) that are received from 

20%-or-more-owned domestic corporations 

subject to income tax and that are subject to 

the 65% deduction under section 243(c).

Line 3, Column (a)

Enter the following.

• Dividends received on certain 

debt-financed stock acquired after July 18, 

1984, from domestic and foreign 

corporations subject to income tax that 

would otherwise be subject to the 

dividends-received deduction under section 

243(a)(1), 243(c), or 245(a). Generally, 

debt-financed stock is stock that the FSC 

acquired by incurring a debt (for example, it 

borrowed money to buy the stock).

• Dividends received from a RIC on 

debt-financed stock. The amount of 

dividends eligible for the dividends-received 

deduction is limited by section 854(b). The 

FSC should receive a notice from the RIC 

specifying the amount of dividends that 

qualify for the deduction.

Line 3, Columns (b) and (c)

Dividends received on certain debt-financed 

stock acquired after July 18, 1984, are not 

entitled to the full 50% or 65% 

dividends-received deduction under section 

243 or 245(a). The 50% or 65% deduction is 

reduced by a percentage that is related to 

the amount of debt incurred to acquire the 

stock. See section 246A. Also, see section 

245(a) before making this computation for an 

additional limitation that applies to certain 

dividends received from foreign corporations. 

Attach a statement to Form 1120-FSC 

showing how the amount on line 3, column 

(c), was computed.

Line 4, Column (a)

Enter dividends received on the preferred 

stock of a less-than-20%-owned public utility 

that is subject to income tax and is allowed 

the 23.3% deduction provided in sections 

244 and 247 (as affected by P.L. 113-295, 

Div. A, section 221(a)(41)(A), Dec. 19, 2014, 

128 Stat. 4043) for dividends paid.

Line 5, Column (a)

Enter dividends received on preferred stock 

of a 20%-or-more-owned public utility that is 

subject to income tax and is allowed the 

26.7% deduction provided in sections 244 

Instructions for Form 1120-FSC (Rev. 1-2024) 9
and 247 (as affected by P.L. 113-295, Div. A, 

section 221(a)(41)(A), Dec. 19, 2014, 128 

Stat. 4043) for dividends paid.

Line 6, Column (a)

Enter the U.S.-source portion of dividends 

that:

• Are received from less-than-20%-owned 

foreign corporations, and

• Qualify for the 50% deduction under 

section 245(a). To qualify for the 50% 

deduction, the FSC must own at least 10% of 

the stock of the foreign corporation by vote 

and value.

Line 7, Column (a)

Enter the U.S.-source portion of dividends 

that are received from 20%-or-more-owned 

foreign corporations and that qualify for the 

65% deduction under sections 243 and 

245(a).

Line 8, Column (c)

Limitation on dividends-received deduction. Generally, line 8, column (c), may not 

exceed the amount on line 10 of the 

worksheet below. However, in a year in which 

an NOL occurs, this limitation does not apply, 

even if the loss is created by the 

dividends-received deduction. See sections 

172(d) and 246(b).

1. Refigure line 18, Part II, 

Schedule B (page 3 of Form 

1120-FSC) without any 

adjustment under section 1059 

and without any capital loss 

carryback to the tax year under 

section 1212(a)(1) ....... 1.

2. Multiply line 1 by 65% 

(0.65) .............. 2.

3. Add lines 2, 5, and 7, column (c), 

and the part of the deduction on 

line 3, column (c), that is 

attributable to dividends from 

20%-or-more-owned 

corporations .......... 3.

4. Enter the smaller of line 2 or 

line 3. If line 3 is greater than 

line 2, stop here; enter the 

amount from line 4 on line 8, 

column (c), and do not complete 

lines 5–10 below ........ 4.

5. Enter the total amount of 

dividends from 

20%-or-more-owned 

corporations that are included on 

lines 2, 3, 5, and 7, column 

(a) ................ 5.

6. Subtract line 5 from line 1 ... 6.

7. Multiply line 6 by 50% 

(0.50) .............. 7.

8. Subtract line 3 above from line 8, 

column (c) ........... 8.

9. Enter the smaller of line 7 or 

line 8 ............... 9.

10. Dividends-received deduction 

after limitation (sec. 246(b)).

Add lines 4 and 9. Enter the 

result here and on line 8, column 

(c) ................ 10.

Line 10, Column (a)

Include the following.

1. Dividends (other than capital gain 

distributions reported on Schedule D (Form 

1120) and exempt-interest dividends) that 

are received from RICs and that are not 

subject to the 50% deduction.

2. Dividends from tax-exempt 

organizations.

3. Dividends (other than capital gain 

distributions) received from a real estate 

investment trust that, for the tax year of the 

trust in which the dividends are paid, 

qualifies under sections 856 through 860.

4. Dividends not eligible for a 

dividends-received deduction, which include 

the following.

a. Dividends received on any share of 

stock held for less than 46 days during the 

91-day period beginning 45 days before the 

ex-dividend date. When counting the number 

of days the FSC held the stock, you may not 

count certain days during which the FSC's 

risk of loss was diminished. See section 

246(c)(4) and Regulations section 1.246-5 

for more details.

b. Dividends received on any share of 

preferred stock that are attributable to 

periods totaling more than 366 days if such 

stock was held for less than 91 days during 

the 181-day period that began 90 days 

before the ex-dividend date. When counting 

the number of days the FSC held the stock, 

you may not count certain days during which 

the FSC's risk of loss was diminished. See 

section 246(c)(4) and Regulations section 

1.246-5 for more details. Preferred dividends 

attributable to periods totaling less than 367 

days are subject to the 46-day holding period 

rule discussed above.

c. Dividends on any share of stock to 

the extent the FSC is under an obligation 

(including a short sale) to make related 

payments with respect to positions in 

substantially similar or related property.

5. Any other taxable dividend income 

not properly reported elsewhere on the 

Dividends and Dividends-Received 

Deduction Worksheet.

If patronage dividends or per-unit retain 

allocations are included on line 10, identify 

the total of these amounts in a statement 

attached to Form 1120-FSC.

Schedule G

Limitations on Deductions

Section 263A uniform capitalization 

rules. The uniform capitalization rules of 

section 263A require FSCs to capitalize 

certain costs to inventory or other property.

In general, FSCs subject to the section 

263A uniform capitalization rules are 

required to capitalize:

1. Direct costs of property produced or 

acquired for resale, and

2. Certain indirect costs (including 

taxes) that are properly allocable to property 

produced or property acquired for resale.

Indirect costs properly allocable to 

property acquired for resale are generally 

those costs in the following categories:

• Off-site storage or warehousing.

• Purchasing.

• Handling, such as processing, 

assembling, repackaging, and transporting.

• General and administrative costs (mixed 

service costs).

For details, see Regulations section 

1.263A-3(d).

In general, the FSC cannot deduct the 

costs required to be capitalized under 

section 263A until it sells, uses, or otherwise 

disposes of the property (to which the costs 

relate). The FSC recovers these costs 

through depreciation, amortization, or costs 

of goods sold.

A small business taxpayer (defined 

earlier) is not required to capitalize costs 

under section 263A. A small business 

taxpayer that wants to discontinue 

capitalizing costs under section 263A must 

change its method of accounting. See 

10 Instructions for Form 1120-FSC (Rev. 1-2024)
section 263A(i) and Regulations section 

1.263A-1(j). Also, see the Instructions for 

Form 3115.

For more information on the uniform 

capitalization rules, see Pub. 538. Also, see 

Regulations sections 1.263A-1 through 

1.263A-3.

Transactions between related taxpayers. 

Generally, an accrual basis taxpayer may 

only deduct business expenses and interest 

owed to a related party in the year the 

payment is included in the income of the 

related party. See sections 163(e)(3) and 

267(a)(2) for limitations on deductions for 

unpaid interest and expenses.

Limitations on business interest expense. Business interest expense may be 

limited. See section 163(j) and Form 8990.

Line 1. Enter only foreign direct costs on 

lines 1a through 1e. See section 924(e) and 

Regulations sections 1.924(e)-1(a) through 

(e) for definitions and rules on direct activity 

costs related to foreign trade income.

Line 5. Salaries and wages. Enter the total 

salaries and wages paid for the tax year. Do 

not include salaries and wages deductible 

elsewhere on the return, such as amounts 

included in officers' compensation, cost of 

goods sold, elective contributions to a 

section 401(k) cash or deferred 

arrangement, or amounts contributed under 

a salary reduction SEP agreement or a 

SIMPLE IRA plan.

Line 10. Compensation of officers. Enter 

deductible officers' compensation on line 10. 

Do not include compensation deductible 

elsewhere on the return, such as amounts 

included in cost of goods sold, elective 

contributions to a section 401(k) cash or 

deferred arrangement, or amounts 

contributed under a salary reduction SEP 

agreement or a SIMPLE IRA plan. See the 

Instructions for Form 1125-E for more 

information on officers' compensation, 

including any special rules and limitations 

that may apply. You are not required to 

complete Form 1125-E or attach it to Form 

1120-FSC.

Line 14. Other. Attach a statement, listing 

by type and amount, all allowable deductions 

that are not deductible elsewhere on Form 

1120-FSC. Enter the total on line 14.

Examples of other deductions include:

• Amortization. See Part VI of Form 4562.

• Insurance premiums.

• Legal and professional fees.

• Supplies used and consumed in the 

business.

• Utilities.

Do not deduct:

• Amounts paid or incurred to, or at the 

direction of, a government or governmental 

entity for the violation, or investigation or 

inquiry into the potential violation, of a law. 

However, see section 162(f) for exceptions to 

the general rule.

• Any amount that is allocable to a class of 

exempt income. See section 265(b) for 

exceptions.

See Pub. 542 and the Instructions for 

Form 1120 for details on other deductions 

that may apply to corporations.

Schedule J

Line 1

If the FSC is a member of a controlled group, 

as defined in section 927(d)(4), it must check 

the box on line 1 and complete Schedule O 

(Form 1120),Consent Plan and 

Apportionment Schedule for a Controlled 

Group. See Schedule O and the Instructions 

for Schedule O for more information.

Line 2

FSCs, including FSCs that are qualified 

personal service corporations (as defined in 

section 448(d)(2)), figure their tax by 

multiplying taxable income (Schedule B, 

line 20) by 21%. Enter this amount on line 2.

Line 3

If the corporation had gross receipts of at 

least $500 million in any 1 of the 3 tax years 

preceding the current tax year, complete and 

attach Form 8991. Enter on line 3 the base 

erosion minimum tax from Form 8991, Part 

IV, line 5e. See section 59A and the 

Instructions for Form 8991.

Line 4

A FSC generally enters on line 4 the sum of 

Schedule J, lines 2 and 3. However, if the 

FSC is an applicable corporation under 

section 59(k) and is subject to the corporate 

alternative minimum tax (CAMT), complete 

Form 4626 and attach it to Form 1120-FSC. 

Enter on line 4 the sum of (a) the amount 

from Form 1120-FSC, Schedule J, lines 2 

and 3, and (b) the amount from Form 4626, 

Part II, line 13.

Line 5

Foreign tax credit. Generally, a FSC may 

not claim a foreign tax credit. It may, 

however, claim a foreign tax credit for any 

foreign taxes imposed on foreign source 

taxable nonforeign trade income 

(Schedule F, Part II) that is treated as 

effectively connected with a U.S. trade or 

business. See Temporary Regulations 

section 1.921-3T(d)(2) for more details.

Instructions for Form 1120-FSC (Rev. 1-2024) 11
Dividends and Dividends-Received Deduction Worksheet Keep for Your Records

(See Instructions for Dividends and Dividends-Received Deduction Worksheet, earlier.)

(a) Dividends

received (b) %

(c)

Dividends-received 

deduction: (a) x (b)

1 Dividends from less-than-20%-owned domestic corporations (other than 

debt-financed stock) .......................................... 50

2 Dividends from 20%-or-more-owned domestic corporations (other than 

debt-financed stock) .......................................... 65

3 Dividends on certain debt-financed stock of domestic and foreign corporations 

(section 246A) .............................................. See Inst.

4 Dividends on certain preferred stock of less-than-20%-owned public 

utilities .................................................... 23.3

5 Dividends on certain preferred stock of 20%-or-more-owned public 

utilities .................................................... 26.7

6 Dividends from less-than-20%-owned foreign corporations ................ 50

7 Dividends from 20%-or-more-owned foreign corporations ................ 65

8 Total dividends-received deduction. Add lines 1 through 7. See instructions for 

limitation. Enter here and on Schedule B, line 19b ...................... ▶

9 Other dividends from foreign corporations not included on line 3, 6, or 7 .......

10 Other dividends ..............................................

11 Total dividends. Add lines 1 through 10. Enter here and on 

Schedule F, line 9 ............................................ ▶

Schedule L

The balance sheet should agree with the 

FSC's books and records. Include 

certificates of deposit as cash on line 1, 

Schedule L.

Line 5. Tax-exempt securities. Include on 

this line:

• State and local government obligations, 

the interest on which is excludible from gross 

income under section 103(a), and

• Stock in a mutual fund or other regulated 

investment company that distributed 

exempt-interest dividends during the tax year 

of the FSC.

Line 27. Adjustments to shareholders' 

equity. Some examples of adjustments to 

report on this line include:

• Foreign currency translation adjustments.

• The excess of additional pension liability 

over unrecognized prior service cost.

If the total adjustment to be entered on 

line 27 is a negative amount, enter the 

amount in parentheses.

Schedule M-1

Line 5c. Travel and entertainment. 

Include on line 5c any of the following.

• Entertainment expenses not deductible 

under section 274(a).

• Meal expenses not deductible under 

section 274(n).

• Expenses for the use of an entertainment 

facility.

• The part of business gifts over $25.

• Expenses of an individual over $2,000, 

that are allocable to conventions on cruise 

ships.

• Employee achievement awards of 

nontangible property or of tangible property if 

the value is over $400 ($1,600 if part of a 

qualified plan).

• The cost of skyboxes.

• Nondeductible club dues.

• The part of luxury water travel expenses 

not deductible under section 274(m).

• Expenses for travel as a form of 

education.

• Other nondeductible travel and 

entertainment expenses.

Line 7a. Tax-exempt interest. Report any 

tax-exempt interest received or accrued, 

including any exempt-interest dividends 

received as a shareholder in a mutual fund or 

other regulated investment company. Also 

report this same amount on line 2, Additional 

Information, on page 2 of the form.

12 Instructions for Form 1120-FSC (Rev. 1-2024)
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If you have comments concerning the accuracy of these time estimates or suggestions for making this form and related schedule simpler, 

we would be happy to hear from you. You can send us comments through IRS.gov/FormComments. Or you can write to the Internal Revenue 

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address. Instead, see Where To File, earlier, near the beginning of the instructions.

Instructions for Form 1120-FSC (Rev. 1-2024) 13
Forms 1120-FSC

Principal Business Activity Codes

This list of principal business activities and their associated 

codes is designed to classify an enterprise by the type of 

activity in which it is engaged to facilitate the administration 

of the Internal Revenue Code. These principal business 

activity codes are based on the North American Industry 

Classification System.

Using the list of activities and codes below, determine 

from which activity the FSC derives the largest percentage 

of its “total receipts.” Total receipts is defined as the sum of 

the foreign trading gross receipts on Form 1120-FSC, 

page 3, Schedule B, line 6a, and the total income on 

page 4, Schedule F, lines 4 and 17. If the FSC's largest 

percentage of its total receipts is derived from the 

wholesale trading of durable goods, the FSC must use one 

of the corresponding codes from the list below 

(423100-423990).

Once the principal business activity is determined, 

entries must be made on Form 1120-FSC, page 2, 

Additional Information, lines 1a, 1b, and 1c. For the 

business activity code number, enter the six digit code 

selected from the list below. On line 1b, enter a brief 

description of the FSC's business activity. Finally, enter a 

description of the principal product or service of the FSC on 

line 1c.

Wholesale Trade

Merchant Wholesalers, Durable Goods

423100 Motor Vehicle & Motor Vehicle 

Parts & Supplies

423200 Furniture & Home Furnishings

423300 Lumber & Other Construction 

Materials

423400 Professional & Commercial 

Equipment & Supplies

423500 Metal & Mineral (except Petroleum)

423600 Household Appliances and 

Electrical & Electronic Goods

423700 Hardware & Plumbing & Heating 

Equipment & Supplies

423800 Machinery, Equipment, & Supplies

423910 Sporting & Recreational Goods & 

Supplies

423920 Toy & Hobby Goods & Supplies

423930 Recyclable Materials

423940 Jewelry, Watch, Precious Stone, & 

Precious Metals

423990 Other Miscellaneous Durable 

Goods

Merchant Wholesalers, Nondurable 

Goods

424100 Paper & Paper Products

424210 Drugs & Druggists' Sundries

424300 Apparel, Piece Goods, & Notions

424400 Grocery & Related Products

424500 Farm Product Raw Materials

424600 Chemical & Allied Products

424700 Petroleum & Petroleum Products

424800 Beer, Wine, & Distilled Alcoholic 

Beverages

424910 Farm Supplies

424920 Book, Periodical, & Newspapers

424930 Flower, Nursery Stock, & Florists' 

Supplies

424940 Tobacco Products & Electronic 

Cigarettes

424950 Paint, Varnish, & Supplies

424990 Other Miscellaneous Nondurable 

Goods

Wholesale Electronic Markets and Agents 

and Brokers

425120 Wholesale Trade Agents & Brokers

Information

Publishing Industries (except Internet)

513110 Newspaper Publishers

513120 Periodical Publishers

513130 Book Publishers

513140 Directory & Mailing List Publishers

513190 Other Publishers

513210 Software Publishers

Motion Picture and Sound Recording 

Industries

512100 Motion Picture & Video Industries 

(except video rental)

512200 Sound Recording Industries

Broadcasting, Content Providers, and 

Telecommunications

516100 Radio & Television Broadcasting

516210 Media Streaming, Social Networks, 

& Other Content Providers

517000 Telecommunications (including 

Wired, Wireless, Satellite, Cable & 

Other Program Distribution, 

Resellers, Agents, Other 

Telecommunications, & Internet 

Service Providers)

Data Processing Services

518210 Computing Infrastructure 

Providers, Data Processing, Web 

Hosting, & Related Services

519200 Web Search, Rentals, Libraries, 

Archives, & Other Info. Services

Rental and Leasing

Rental and Leasing Services

532100 Automotive Equipment Rental & 

Leasing

532210 Consumer Electronics & 

Appliances Rental

532281 Formal Wear & Costume Rental

532282 Video Tape & Disc Rental

532283 Home Health Equipment Rental

532284 Recreational Goods Rental

532289 All Other Consumer Goods Rental

532310 General Rental Centers

532400 Commercial & Industrial Machinery 

& Equipment Rental & Leasing

Professional Services

Architectural, Engineering, and Related 

Services

541310 Architectural Services

541320 Landscape Architecture Services

541330 Engineering Services

541340 Drafting Services

541350 Building Inspection Services

541360 Geophysical Surveying & Mapping 

Services

541370 Surveying & Mapping (except 

Geophysical) Services

541380 Testing Laboratories

Other Professional Services

541600 Management, Scientific, & 

Technical Consulting Services

14