Patronage Dividend FAQs
WHAT IS PATRONAGE?
Patronage dividends are a portion of the net profit that Berkshire Food Co-op makes from purchases returned to you, the Owner.
WHY PAY PATRONAGE?
Patronage is one of the benefits of owning a share of the Co-op. In addition, patronage is beneficial to the business. Berkshire Food Co-op saves tax dollars by distributing patronage dividends to our Owners.
WHEN IS PATRONAGE DETERMINED?
We wait until our annual finances are finalized and then the Board of Directors votes on the recommended pay out. Owners should be on the lookout for more information at the Annual Co-op Meeting each fall.
WHO RECEIVES PATRONAGE DIVIDENDS?
Owners in good standing as of June 30, the end of our fiscal year, who have sufficient patronage to balance the expense of distribution. Essentially, any Owner who has made a certain amount of purchases (determined each year) recorded through our point-of-sale system between July 1 and June 30 of the following year will receive a rebate.
CAN YOU DONATE YOUR DIVIDEND TO BERKSHIRE FOOD CO-OP?
Berkshire Food Co-op must pay taxes on unredeemed dividends. We appreciate the thought, but using your dividend to shop in the store is the best way to help the Co-op and to help yourself. Or, if you prefer, you can donate your dividend to the charitable organization of your choice.
ARE DIVIDENDS TAXABLE INCOME TO RECIPIENTS?
Under Internal Revenue Code section 1385 (b) (2), dividends received for purchases made for personal, living or family purposes are exempt from taxable income. If you made purchases for business purposes, however, you might want to consult your tax advisor about whether your allocation should be reported as income or if your expense deduction or property basis should be adjusted.