California Code of Regulations › Title 18 - Public Revenues › Division 3 - Franchise Tax Board › Chapter 2.6 - Administration of Franchise and Income Tax › Subchapter 2 - Returns › Article 4 - Information Returns › Section 18640 - Returns of Information as to Patronage Dividends, Rebates, or Refunds

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) In General. Any
					 corporation allocating to any patron amounts aggregating $100 or more during
					 the calendar year as patronage dividends, rebates, or refunds (whether in cash,
					 merchandise, capital stock, revolving fund certificates, retain certificates,
					 letters of advice, or in some other manner that discloses to each patron the
					 amount of such dividend, rebate, or refund) shall render a return of
					 information with respect to such allocation on Forms 596 and 599. The
					 allocation shall be reported for the calendar year during which the allocation
					 is made. See Reg. 18631-18681(c).
(b) Definitions.
(1) Co-operative Association. For the purpose
					 of this regulation, the term "co-operative association" includes any
					 corporation operating on a co-operative basis and allocating amounts to patrons
					 on the basis of the business done with or for such patrons.
(2) Patron. For the purpose of this
					 regulation, the term "patron" includes any person with whom or for whom the
					 co-operative association does business on a co-operative basis, whether member
					 or a nonmember of the co-operative association, and whether an individual, a
					 trust, estate, partnership, company, corporation, or co-operative
					 association.
(3) Patronage,
					 Dividends, Rebates, and Refunds. For the purpose of this regulation, the term
					 "patronage dividend, rebate, or refund" includes any amount allocated (whether
					 in cash, merchandise, capital stock, revolving fund certificates, retain
					 certificates, certificates of indebtedness, letters of advice, or in some other
					 manner that discloses to each patron the amount of such dividend, refund, or
					 rebate) by a co-operative association, to the account of a patron on the basis
					 of the business done with or for such patron. The following are not patronage
					 dividends, rebates, or refunds:
(A) Amounts
					 distributed in redemption of a capital stock, or in redemption or satisfaction
					 of certificates of indebtedness, revolving fund certificates, retain
					 certificates, letters of advice, or other similar documents;
(B) In the case of a co-operative association
					 marketing the products of members or other patrons, the amount paid in cash or
					 merchandise by the association for such products to the extent such amount is
					 fixed without reference to the earnings of the co-operative association. For
					 this purpose, the term "earnings" includes the excess of amounts retained by
					 the association to cover expense or other items over the amount of such
					 expenses or other items.
(4) Allocation. For the purpose of this
					 regulation, the term "allocation" includes distributions in cash or merchandise
					 made by a co-operative association to a patron, the issuance by such
					 association of capital stock, revolving fund certificates, retain certificates,
					 certificates of indebtedness, letters of advice, similar documents, or any
					 other act by a co-operative association whereby a patron receives actual notice
					 of the segregation on the books of such association of a portion of its assets
					 for the account of such patron. Thus, a mere credit to the account of a patron
					 on the books of the co-operative association, without actual notice to the
					 patron, is not an allocation.