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LIC-6.04 - Patronage Dividends

Administrative Rules Adopted by Bureau of Licenses Pursuant to Rule-Making Authority

Patronage dividends received by controlling shareholders of a cooperative are not allowed deductions for purposes of Business License and Business Income Tax Laws.
Patronage dividends are a pre-tax distribution to the owners of a non-exempt entity as an enticement to encourage and reward owner patronage of the entity. Since these distributions are determined to arrive at net income and distributed to the owners as a reward for patronage based upon each owner's use of the cooperative, patronage dividends are compensation or interest paid to an owner. These distributions are subject to the owners compensation add back, controlling shareholder rule, and compensation allowance under Business License and Business Income Tax Laws.


Portland City Code Section 7.02.600 C.
Multnomah County Code Section 12.600 C.

Submitted for inclusion in PPD September 17, 2002.
Originally adopted as Bureau of Licenses Administrative Rule 600.93-7 November 23, 1993.

Table of Contents
LIC-6.01 - Payments Deemed to be Compensation to Owners
LIC-6.02 - Self-Employment Tax Deduction and Health Care Premium Deduction
LIC-6.03 - Change of Ownership During the Year and Calculation of the Compensation Allowance Deduction
LIC-6.04 - Patronage Dividends
LIC-6.05 - Short Periods Count as Tax Year
LIC-6.06 - Definition of Controlling Shareholders and Calculation of Number of Controlling Shareholders
LIC-6.07 - Treatment of Currently Taxed Pass-Through Income
LIC-6.08 - Partnerships - Partner Level Deduction Election
LIC-6.09 - Qualified Retirement Plans
LIC-6.10 - De Minimus Business Activity for Personal Services
LIC-6.11 - Apportionment of Gains and Incomes Due to Sale of a Business
LIC-6.12 - Business Activity and Apportionment of Sales of Tangible Personal Property
LIC-6.13 - De Minimus Business Activity for Tangible Personal Property
LIC-6.14 - Apportionment of Gross Income from Business Activities Other than Sales of Tangible Personal Property
LIC-6.15 - Apportionment for Banking Income
LIC-6.16 - Apportionment for Domestic Insurers
LIC-6.17 - Apportionment for Freight Carriers
LIC-6.18 - Apportionment for Passenger Carriers
LIC-6.19 - Apportionment for Incomes Subject to PCC Chapters 7.12 or 7.14
LIC-6.20 - Apportionment for Providers of Electronic or Telephonic Services