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current and prior years in determining their CTI from export sales.
II. Regulatory Definition of "Export Property"
Petitioners manufactured two specialized vessels that were
designed and built for transoceanic transport of liquefied
natural gas. The tankers were manufactured under contract for
sale to a company for direct use outside the United States.
After the completion, but before the tankers could be used for
foreign purposes, unforeseen delays caused some domestic use of
one of the tankers. The delay also caused both tankers not to be
used in foreign commerce prior to 1 year after their sale.
In order for petitioners' DISC to retain its statutory
status, 95 percent of its gross receipts must consist of
qualified export receipts. Sec. 993(e). Qualified export
receipts include gross receipts from the sale, exchange, or other
disposition of export property. "Export property" is statutorily
defined, in pertinent part, as "property * * * manufactured * * *
in the United States by a person other than a DISC, * * * held
primarily for sale, * * * in the ordinary course of trade or
business * * * for direct use, consumption, or disposition
outside the United States”. Sec. 993(c)(1).
The regulations in connection with the definition of "export
property" provide for a "destination test". Property satisfies
the destination test "only if it is * * * directly used * * *
outside the United States * * * by the purchaser * * * within 1
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