Cal. Code Regs. Tit. 18, § 24404 - Cooperative Associations

Cooperative associations are not exempt from tax under this part, but are permitted a deduction for all income arising from business done for or with members, and for or with nonmembers when done on a nonprofit basis.

Thus, all cooperatives are subject to tax on or measured by income derived from business done with nonmembers on a profit basis but not less than the minimum tax. It is immaterial that the income derived from nonmember business is incidental to the primary activity of the taxpayer.

For special deductions allowed farmer's cooperative associations, see Legal Ruling 389 (CCH Paragraph 205-320; P-H Paragraph 13,640).

Notes

Cal. Code Regs. Tit. 18, § 24404

1. Renumbering and amendment of Section 24404-24405 to Section 24404 filed 9-3-82; effective thirtieth day thereafter (Register 82, No. 37).

Note: Authority cited: Section 26422, Revenue and Taxation Code. Reference: Section 24504, Revenue and Taxation Code.

1. Renumbering and amendment of Section 24404-24405 to Section 24404 filed 9-3-82; effective thirtieth day thereafter (Register 82, No. 37).