Cite as: 537 U. S. 437 (2003)
Opinion of the Court
how a particular research cost should be allocated and apportioned.
Nor does § 1.994-1(c)(6)(iv) support Boeing's argument. It provides that a "taxpayer's choice in accordance with subparagraph (7) of this paragraph as to the grouping of transactions shall be controlling, and costs deductible in a taxable year shall be allocated and apportioned to the items or classes of gross income of such taxable year resulting from such grouping." The regulation makes clear that if the taxpayer selects the CTI method of transfer pricing (as Boeing did), then the taxpayer may choose to group export receipts according to product lines, two-digit SIC codes, or on a transaction-by-transaction basis. Ibid. The regulation also establishes that there shall be an allocation and apportionment of all relevant costs deducted in the taxable year. Ibid. Notably, however, the regulation simply does not speak to how costs should be allocated among different items or classes of gross income and apportioned between the DISC and its parent once the taxpayer (pursuant to § 1.994-1(c)(6)) groups its gross receipts. Treasury Regulation § 1.861-8(e)(3) fills this gap by providing that R&D expenditures that are related to all income reasonably connected with the taxpayer's relevant two-digit SIC category or categories are "allocable to all items of gross income as a class . . . related to such product category (or categories)." 26 CFR § 1.861-8(e)(3) (1979) (emphasis added).
IV
Boeing also relies heavily on legislative history, particularly on statements in Reports prepared by the tax-writing committees of the House and the Senate on the DISC statute. Those Reports are virtually identical in terms of their discussion of the DISC provisions. See H. R. Rep., at 58-95; S. Rep., at 90-129. Neither says anything about R&D costs. They both contain statements supporting the proposition that in determining how to calculate income that qualifies
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