Empire Ltd. (Empire), is a German corporation engaged in the sale of machinery parts to various customers throughout Europe. For many years Empire purchased the parts from Colonial Ohio Corp. (Colonial), an Ohio corporation, in Youngstown, Ohio. Although Empire has no U.S. office, it took title to the parts in Youngstown. Although Empire has no U.S. office, it took title to the parts in Youngstown, transported the parts to Europe, and made delivery to its European customers. The two companies are each wholly owned by a Swiss holding company.

-Does Empire have any U.S. income tax liability?

-Should the relationship between Empire and Colonial affect the analysis?