Foundryman testifies on global competitiveness. (Washington Alert).

Doug Parsons, president of Excel Foundry and Machine, Pekin, Illinois, testified on the importance of tax incentives in increasing export activity for small businesses before a House of Representatives subcommittee in June. He reported on his firm's utilization of a foreign sales corporation (FSC) in the past and its current use of an extraterritorial income regime (ETI) to compete in overseas markets. These types of tax incentives, created over the past 20 yr, are designed to neutralize some of the tax advantages enjoyed by foreign competitors located in countries with territorial tax systems.

According to Parsons, international sales account for 33% of Excel's revenue. He said FSC/ETI benefits are critical to his export efforts and "justify the additional efforts needed to go into overseas markets and compete."

In recent years, the FSC/ETI benefits have been under attack. The European Union (EU) agreed to hold off on sanctions on the U.S. this year over the FSC/ETI dispute. Congress is considering a FSC-related tax-law change by year-end that would respond to the EU challenge.