Comments on Proposed Contract Manufacturing Regulations

March 27, 2009 On March 27, 2009, Tax Executives Institute submitted the following comments to the U.S. Department of the Treasury and the Internal Revenue Service relating to proposed regulations regarding the treatment of foreign base company sales income from property produced under contract manufacturing arrangements and sold by controlled foreign corporations under section 954(d) of the Internal Revenue Code. The comments were prepared under the aegis of TEI's International Tax Committee whose chair is Brian C. Ugai of Starbucks Coffee Company. Other members of the Institute who contributed to the project are Anthony J. Blackburn and Terri Yuhaniak of Goodyear Tire & Rubber Company, Dorothy C. Chao of Baxter International, Inc., Lester D. Ezrati of Hewlett-Packard Company, Daniel R. Goff of Xilinx, Inc., Peter Hiltz of Cisco Systems, Inc., Howard Schneck of Atheros Communications, Inc., and Daniel J. Wenzel of S.C. Johnson & Son. TEl General Counsel Mary L. Fahey served as staff liaison on this project.