The people's voice. [volume] (Helena, Mont.) 1939-1969, 1945-04-20
CORPORATIONS
HAVE Way TO
TAX EXEMPTION

CHICAGO-The National Tax Equal
/ ity Associations scare campaign t,
the effect that big corporations ar.
planning to reorganize as co-opera
tives ''in order to evade payment O
| federal income taxes" was character
lied in a statement today from head
quarters here of the National Asso
citation of Co-operatives as part Of
desperate effort to frame a CASE
against the farmer cooperative asso
Citations"
| NTEA's attack on the farm organ
| izations have centered chiefly on fed
eral income tax exemptions available
to them under provisions of the In
ternal Revenue Act They have neg
lected however, to inform the public
that these exemptions are only DOS
sible provided the Co-ops comply with
certain rigid restrictions upon their
operations.
No corporation, declared r. Wayne
Newton, manager of the National AS
sociation of Co-operatives, needs to
|reorganize under cooperative law in
order to reduce or eliminate its fed
eral income tax liability. The chief
requirement he said, is to contract
with customers to serve them at &C.
tual cost Payments made to patrons
ir fulfilment of this obligation, he ex-
planned, can then be deducted from
the company's income tax returns.
Many business concerns throughout
the country, which are in no sense CO.
operatives, have been doing exactly
this for years, Newton asserted The
deductions he added, have been sus-
tanned by the courts.
The barrage of propaganda hostile
to the farmer cooperative associa-
lions let loose on the country by the
National Tax Equality Association,
Newton charged, "has twisted and
misinterpreted the facts with the ex-
press design of obscuring or canceal-
ing the truth" The attack, he said,
is prompted solely by selfish interests
who are in competition with success
full farmer co-operatives. Their ex-
travagant and untrue charges, he de-
clared are being made because they
realize that. in this time of worldwide
war, this is the only way to command
attention from people who take their
ideas prefabricated
There are in this country, today.
Newton stated, 100000 partnership
and 100000 sole proprie-
torships which are wholly exempt
from corporation income tax or sim
liar levy on business income as dis
tinguished from personal income.
Farmer co-operatives today number
10,450, according to government sta
tistics, and of these, Newton said,
only about so per cent qualify for
exemption from corporation income
taxes.
I'm other words" he said, "less than
one out of every 200 businesses which
are free from corporation income tax
IS a farmer cooperative. Many farm
er Co-ops do not even claim exemp-
ton, but if the entire 10,450 did so,
the advantage which NTEA charges
hey would enjoy thereby would not
have the effect of driving a single
AK paying business competitor out of
business. No business which operates
IN non-profit basis will be liable
or income tax"
Many nationally known department
stores in New York, Chicago, and
elsewhere, Newton pointed out, are
banded together to conduct central
zed purchasing agencies on the COOP
,rative plan. Many of them, he added,
llso conduct cooperative credit bu-
eaus, and delivery services or pub
ish shoppers guides on a share-the-
:ost basis. Examination of modern
merchandising practices further re-
-eals, he said, that similar purchasing
are being run by groc-
RS, druggists, hardware dealers and |
ther Independent retailers He re-
erred also to the mutual insurance |
formed by numerous trade |
to provide their members with |
ow-cost protection against fire and
ther business losses.
eff the National Tax Equality Asso-
iation is sincere in its determination
CONTINUED on Page Four