The people's voice. [volume] (Helena, Mont.) 1939-1969, 1945-11-30
NATL. ASSN. OF CO-0PS. COMMENTS
ON TREASURY STUDY OF FORM 99OS

WASHINGTON, Nov 17.-The fol
lowing notes summarize points of spe-
cial interest to co-ops revealed by the
special report of the Bureau of Inter-
nal Revenue, compiled from returns
of organizations exempt from tax UNI
der section 101, Internal Revenue
Code, and released to the public here
today:
The report shows that 1897 Form
zoos were received from farmer coop
eratives prior to December 81, 1914,
of which APO came from co-opera-
tives the exempt status of which had
been established for the taxable year
while 277 were fled by co-operatives
awaiting a ruling on their taxability.
The report also lists total of 1,19S
farmer co-operatives which filed their
Form 990s between December 81, 1914
and September 1, 1915 but it does not
indicate which of these were exempt
and which were awaiting a ruling on
their taxability.
While the figures are admittedly
incomplete, they are sufficiently so
to indicate that the total number of
tax-exempt farmer co-operatives in
1943 was probably between $500 and
$500 Since the Farm Credit admins
tration has areported total of TO-
300 farmer co-operatives for 1943-44
the number operating without exemp-
ton must have been between 1900
and 5000.
The report failed dismally to meet
the desires of those hoping to uncover
vast reservoirs of untaxed farmer CO.
op income. The 5,223 exempt farmer
co-operatives reporting gross receipts
from business activities showed a to-
tai of 1891, 321 900. The number of
farmer co-operatives included in the
tables from which these figures were
compiled were only slightly over one
half the 10000 previously reported
by FCA as the total of all farm co-ops,
while the business receipts were less
than 5S per cent of the FCA estimated
total for the same period.
Patronage refunds for the same CO.
operatives totaled $136,989, 900 an av-
erage of Az per cent on the total
business volume of $2,991 ,321,000 as
reported above. comparison of ex-
empt co-operatives engaged exclusive
ly in marketing with those engaged |
exclusively in purchasing shows that
1853 marketing co-ops reported pat |
ronage refunds which averaged slight |
ly over per cent of their receipts |
erage for 1928 purchasing co-ops was
not quite 8 u per cent.
These figures established that the
average saving to patrons is adequate
but not sensational. 1t does, however
demonstrate that even the exempt |
farmer co-ops do not owe their prog
ress to tax favors since discounts and
refunds to patrons, when properly
made. are not taxable to any form
of business organization, exempt or
non-exempt
The effective manner in which Sec.
1O1 (12) encourages exempt farmer CO.
ops to stick closely to their original
purpose of serving the farm field only,
is demonstrated with surprising force
IN a table showing the type of patron
age of 1919 co-ops which reported on
this subject When business done with
the United States government is ex-
cluded, these figures show that 81 per
cent of the total volume of farm prod
ucts marketed by these exempt co-ops
was for members, while per cent of
the balance was for non-member prod
ucers.
In the purchasing field, although
the law permits exempt eo-operatives
to transact up to Is per cent Of their
business with others than farmers, the
actual volume of non-farmer business
was less than 8 per cent of the total,