What is Patronage?
Skagit Farmers Supply is a locally owned cooperative and as such pays patronage funds. Patronage is a return of profits to eligible customers who have met the minimum purchase requirements. These minimum purchase requirements change from year to year, based on profitability, and do not include some items like sales tax, fuel taxes, and rentals.
How do I Become Eligible to Receive Patronage?
All that is required is for you to establish a member or credit account to track your purchases along with completing and signing an IRS W-9 form. This form must be on file for patronage to be issued per IRS guidelines.
What is the Minimum Purchase Amount?
The minimum purchase amount is the amount of required purchases form Skagit Farmers Supply during its fiscal year. These are for all purchases including everything from propane to gasoline to pet food. The minimum purchase amount, which changes form year to year, is based on profitability, and does not include such items as sales tax, fuel tax and rentals.
Where do I Include Patronage Refunds on my Income Tax Return?
Purchase of Personal Items
Do not need to report as income any patronage refund that is for purchasing personal items. Patronage dividends on personal item purchases are considered savings and therefore not taxable.
Purchase of Farm or Business Use Items
You generally report patronage refunds as income on Schedule F or Schedule C for the tax year you receive them. Only items used in farming or business are reported on Schedule F or C.
What is Stock and How is it Returned?
Stock that is issued by Skagit Farmers Supply is held in your account, no certificate is issued. The stock pays no interest and has no cash value until retired. Retiring stock is at the discretion of the Skagit Farmers Supply Board of Directors.
