What are These Patronage dividends? Your Questions Answered!
If you have any problems, please skip to the bottom of the page to contact us.
What is a patronage dividend?
A patronage dividend is a mechanism to return a portion of our profits to our owners based on how much you shopped over the past year. The Co-op Board of Directors can elect to return these profits to owners rather than include them in the Co-op's taxable income.
How will I get my dividend?
on August 1, 2017, The Co-op will be sending notifications via postcard to your most current address on file. These postcards have a coupon on them, so be sure to not throw them away. Owners with an email address on file will also receive a notification at a later date to remind them to redeem their dividends. Pick up your patronage dividend voucher at the customer service desk whenever we are open. If you believe your current address is not correct, you can update it in the store or visit the link below to update it.
WHAT CAN I DO WITH MY dividend?
You have three options:
- Apply your dividend amount to your purchase. The whole amount must be used, so any leftover will be returned as cash
- Redeem the entire dividend amount for cash
- Donate it to our Seed Sowers Cooperative Community Fund
WHAT IS THE SEED SOWERS Cooperative Community FUND?
The Seed Sowers Cooperative Community Fund (Seed Sowers) is our Co-op's endowment fund, administered by the Twin Pines Cooperative Foundation. Cooperative Community Funds support the work of cooperatives across the country. The interest earned on donations made to our fund is returned to us to support the work of local organizations. It's a win-win!
WHAT IF I DO NOTHING?
Action must be taken by October 31st, 2017 in order to qualify as allocated patronage dividends. If you do not take action by this date, the returned portion of your dividend will be donated to the Seed Sowers Fund. This ensures that the full amount of the patronage dividend declared for the Co-op will be allocated for in this time period.
How much of Co-op profits get returned?
Only profits made on sales to owners are eligible to be returned as patronage dividends. When patronage dividends are declared by the Board of Directors, the IRS requires us to return a minimum of 20% of the total declared dividend, though the Board of Directors has the discretion to pay out up to 100%.
How much has the Board of Directors elected to return for the 2016 Fiscal year?
In keeping with best practices, the Co-op has elected to return 20% of declared dividend to owners.
What does the Co-op do with the percentage of profit that the Board of Directors does not issue back to the owners?
The portion of the dividend not returned to you, known as “retained patronage,” is reinvested in the Co-op. Each owner's individual equity in the Co-op is increased by each year's individual retention.
What about the profit generated by non-owners?
Profit earned from sales to non-owners is treated as taxable income. This money, along with owner's retained patronage, ensures we have enough money to cover operating costs, capital expenditures, and emergencies. It also means we are less dependent on interest-accruing bank loans to achieve our goals.
In the event the Co-op makes a profit, when will I get my voucher?
The Board of Directors votes on a resolution to approve patronage dividends before the year's finances are finalized. This resolutions states that if certain conditions are met, patronage dividends will be approved. Notification of a dividend must be made no later than September 15th. This year, owners with a dividend will be notified via postcard and/or email by August 1st.
I shopped at the Co-op, but I didn’t get a dividend. Why not?
- The store did not make enough profit to justify preparing and sending dividend notifications
- We don't have your current mailing address or email address
- You may not have shopped enough to meet the cutoff. Patronage dividends under $2.00 are not processed due to costs involved in generating and mailing the notification
If you feel that you should have received a dividend but did not, please use the link at the bottom of the page to let us know.
I redeemed a patronage Dividend Voucher. Do I have to include it as income on my tax return?
No, as long as the products you purchased during the year were for your own personal consumption. If you were purchasing for business use, please contact your tax professional
Tell me again why patronage Dividends are a good thing.
Like all true cooperative businesses, the Moscow Food Co-op operates according to the Principles of Cooperation. These principles lead us directly to patronage dividends by stating that the economic results (profit) arising from the owners belong to the ownership in direct proportion to their patronage. This ensures that no single owner benefits at the expense of another. They also help ensure the sound financial health of your Co-op, ensuring the Co-op will be able to serve you and all our owners for many years to come.
Problems or Questions?
If you have questions or feel there is a problem, let us know! You can reach us in person, via phone, or via email (our preferred method.
Address: 121 E 5th Street, Moscow, ID 83843