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TITLE 26-INTERNAL REVENUE CODE title VI, § 803(a), Mar. 29, 1975, 89 Stat. 64; Pub. L. 94-455, title XI, § 1101(b), (c), title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1658, 1834.) REFERENCES IN TEXT Section 3 of the Export Administration Act, referred to in subsec. (c)(2)(D), is classified to section 2402 of Title 50 App., War and National Defense. AMENDMENTS 1976-Subsecs. (a)(2), (b)(9). Pub. L. 94-455. § 1906(b)(13)(A), struck out "or his delegate" following "Secretary". Subsec. (c). Pub. L. 94-455, §§ 1101(b), 1906(b)(13)(A). in par. (I) in provisions following subpar. (C), struck out "or his delegate" following "Secretary", in par. (2)(B) "or" following "like property" and, in par. (2)(C), substituted "under section 613 or 613A" for "under section 611" following "uranium products)". Subsec. (d)(1)(C). Pub. L. 94-455, § ll01(c)(1), added "determined without regard to subparagraph (C) or (D) of subsection (c)(2)" following "export property". Subsec. (d)(2). Pub. L. 94-455, § 1101(c)(2), added "(determined without regard to subparagraph (C) or (D) of subsection (c)(2))" following "would be export property". Subsec. (d)(4)(A). Pub. L. 94-455, § 1906(b)(13)(A), struck out "or his delegate" following "Secretary". Subsec. (e)(3)(B). Pub. L. 94-455, § 1906(b)(13)(A), struck out "or his delegate" following "Secretary". 1975-Subsec. (c)(2). Pub. L. 94-12 added subpars. (C) and (D) and provisions following subpar. (D). 1974-Subsec. (b)(3). Pub. L. 93-482 added "or of an- other corporation which is a DISC and which is a member of a controlled group which includes such cor- poration" following "such corporation". EFFECTIVE DATE OF 1976 AMENDMENT Section 1101(g)(2) of Pub. L. 94-455 provided that: "The amendments made by subsection (b) [amending subsec. (c)(2) of this section] shall apply to sales, ex- changes, and other dispositions made after March 18, 1975, in taxable years ending after such date." Section 1101(g)(3) of Pub. L. 94-455 provided that: "The amendments made by subsections (c) and () (amending subsecs. (d)(1)(C), (2) of this section] shall apply to taxable years ending after March 18, 1975." Er'EcTivE DATE OF 1975 Ammpugwr Section 603(b) of Pub. L. 94-12 as amended by sec- tion 1101(f) of Pub. L. 94-455, provided that: "(1) IN OGENEAL.-Except as provided in paragraph (2), the amendments made by subsection (a) [amend- ing this section] shall apply to sales, exchanges, and other dispositions made after March 18, 1975, in tax- able years ending after such date. "(2) BINDING coNTRAcT.-The amendments made by subsection (a) [amending this section] shall not apply to sales, exchanges, and other dispositions made after March 18, 1975, but before March 19, 1980, If such sales, exchanges, and other dispositions are made pur- suant to a fixed contract. The term 'fixed contract' means a contract which was, on March 18, 1975, and is at &Il times thereafter binding on the DISC or a tax- payer which was a member of the same controlled group (within the meaning of section 993(a)(3) of the Internal Revenue Code of 1954 [subsec. (a)(3) of this section]) as the DISC, which was entered into after the date on which the DISC qualified as a DISC and the DISC and the taxpayer became members of the same controlled group, and under which the price and quantity of the products sold, exchanged, or otherwise disposed of cannot be increased." ErrEcrivE DATE OF 1974 AmDMmNT Section 3(b) of Pub. L. 93-482 provided that: "The amendment made by subsection (a) [amending subsec. (b)(3) of this section] applies to taxable years begin- ning after December 31, 1973. The aihendment shall, at the election of the taxpayer made within 90 days after the date of enactment of this Act (Oct. 26, 1974], also apply to any taxable year beginning after Decem- ber 31, 1971, and before January 1. 1974." SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 861, 908, 992, 995, 999 of this title. § 994. Inter-company pricing rules (a) In general In the case of a sale of export property to a DISC by a person described in section 482, the taxable income of such DISC and such person shall be based upon a transfer price which would allow such DISC to derive taxable income attributable to such sale (regardless of the sales price actually charged) in an amount which does not exceed the greatest of- (1) 4 percent of the qualified export receipts on the sale of such property by the DISC plus 10 percent of the export promotion expenses of such DISC attributable to such receipts, (2) 50 percent of the combined taxable income of such DISC and such person which is attributable to the qualified export receipts on such property derived as the result of a sale by the DISC plus 10 percent of the export promotion expenses of such DISC at- tributable to such receipts, or (3) taxable income based upon the sale price actually charged (but subject to the rules provided in section 482). (b) Rules for commissions, rentals, and marginal costing The Secretary shall prescribe regulations set- ting forth- (1) rules which are consistent with the rules set forth in subsection (a) for the application of this section in the case of commissions, rentals, and other income, and (2) rules for the allocation of expenditures in computing combined taxable income under subsection (a)(2) in those cases where a DISC is seeking to establish or maintain a market for export property. (c) Export promotion expenses For purposes of this section, the term "export promotion expenses" means those expenses in- curred to advance the distribution or sale of export property for use, consumption, or distri- bution outside of the United States, but does not include income taxes. Such expenses shall also include freight expenses to the extent of 50 percent of the cost of shipping export prop- erty aboard airplanes owned and operated by United States persons or ships documented under the laws of the United States in those cases where law or regulations does not require that such property be shipped aboard such air- planes or ships. (Added Pub. L. 92-178, title V, § 501, Dec. 10, 1971, 85 Stat. 543, and amended Pub. L. 94-455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.) AMENDMENTs 1976-Subsec. (b). Pub. L. 94-455 struck out "or his delegate" following "Secretary". § 994 Page 624