The origins of the FSC dispute date back to 1971, when the US introduced legislation providing for "Domestic international sales corporations" (DISCs).

The Governor will propose a state-sponsored foreign sales corporation that small to mid-sized companies could join and reap Federal tax benefits of up to 15 percent.

The World Trade Organization has repeatedly ruled that an American tax break for what are known as foreign sales corporations amounts to an illegal trade subsidy.

The domestic international sales corporation is a provision unique to tax law in the United States.

The trade panel awarded Europe the right to impose $4 billion worth of trade sanctions against the United States for giving tax breaks to American exporters through foreign sales corporations.

The actual dispute centers on what are called "foreign sales corporations," which are offshore subsidiaries of American corporations used to export American-made products.

The United States has 13 variations on the basic Form 1120 for S corporations, insurance companies, Domestic international sales corporations, foreign corporations, and other entities.

The Clinton administration has strongly supported foreign sales corporations, arguing that the provision is necessary to level the playing field with the European tax system.

The clementines matter has still not been resolved and neither have the dispute over duty-free American exports nor the case of foreign sales corporations, which is obviously significant.

If Disney exported a master copy of 'Toy Story' with a license to make 100,000 additional copies, it would be fully eligible for the tax benefits of a foreign sales corporation.