Cooperatives pay taxes on real estate, personal property, sales, employment, utilities, etc. just like all other businesses. Cooperatives are single taxed like all other businesses except for C-corporations, which are double taxed at the entity and the stockholder levels. The single tax treatment is not specific to the cooperative structure, but the taxation of the patronage refunds is unique. The net margin (income-expenses) is NOT considered taxable income because it is returned to the patrons. The net margins are returned as patronage refunds and are taxed at the patron level in all situations.
RESOURCES
- Comparing Nonprofit and Cooperative Entities. University of Wisconsin Center for Cooperatives 2015.
Indiana Cooperative Statues
- Non-profit Mutual Benefit Corporations
- Agricultural Cooperatives – Ind.Code 15-7 (1925)
- Rural Electric Membership Corporations – Ind.Code 8-1-13 (1935)
- Rural Telephone Cooperatives – Ind.Code 8-1-17 (1951)
- Farm Mutual Insurance Companies – Ind.Code 27-5.1
- Mutual Savings Banks – Ind.Code 28-6.1
Indiana Cooperative Development Center
225 S. East Street, Suite 252
Indianapolis, IN 46202
Phone: 317.692.7707
Email: info@icdc.coop
ICDC is an equal opportunity employer and provider.