Cite as: 537 U. S. 437 (2003)
Opinion of the Court
"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 attributable 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 setting forth
. . . . . "(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." 26 U. S. C. §§ 994(a)(1)-(3), (b)(2) (emphasis added).
The statute does not define the term "combined taxable income," nor does it specifically mention expenditures for R&D. Congress did grant the Secretary express authority to prescribe regulations for determining the proper alloca-
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