26 U.S.C. § 521
Exemption of farmers’ cooperatives from tax
# (a) Exemption from tax
A farmers’ cooperative organization described in subsection (b)(1) shall be exempt from taxation under this subtitle except as otherwise provided in part I of subchapter T (sec. 1381 and following). Notwithstanding part I of subchapter T (sec. 1381 and following), such an organization shall be considered an organization exempt from income taxes for purposes of any law which refers to organizations exempt from income taxes.
# (b) Applicable rules
(1) Exempt farmers’ cooperatives The farmers’ cooperatives exempt from taxation to the extent provided in subsection (a) are farmers’, fruit growers’, or like associations organized and operated on a cooperative basis (A) for the purpose of marketing the products of members or other producers, and turning back to them the proceeds of sales, less the necessary marketing expenses, on the basis of either the quantity or the value of the products furnished by them, or (B) for the purpose of purchasing supplies and equipment for the use of members or other persons, and turning over such supplies and equipment to them at actual cost, plus necessary expenses.
(2) Organizations having capital stock Exemption shall not be denied any such association because it has capital stock, if the dividend rate of such stock is fixed at not to exceed the legal rate of interest in the State of incorporation or 8 percent per annum, whichever is greater, on the value of the consideration for which the stock was issued, and if substantially all such stock (other than nonvoting preferred stock, the owners of which are not entitled or permitted to participate, directly or indirectly, in the profits of the association, upon dissolution or otherwise, beyond the fixed dividends) is owned by producers who market their products or purchase their supplies and equipment through the association.
(3) Organizations maintaining reserve Exemption shall not be denied any such association because there is accumulated and maintained by it a reserve required by State law or a reasonable reserve for any necessary purpose.
(4) Transactions with nonmembers Exemption shall not be denied any such association which markets the products of nonmembers in an amount the value of which does not exceed the value of the products marketed for members, or which purchases supplies and equipment for nonmembers in an amount the value of which does not exceed the value of the supplies and equipment purchased for members, provided the value of the purchases made for persons who are neither members nor producers does not exceed 15 percent of the value of all its purchases.
(5) Business for the United States Business done for the United States or any of its agencies shall be disregarded in determining the right to exemption under this section.
(6) Netting of losses Exemption shall not be denied any such association because such association computes its net earnings for purposes of determining any amount available for distribution to patrons in the manner described in paragraph (1) of section 1388(j).
(7) Cross reference For treatment of value-added processing involving animals, see section 1388(k).
Source: view the official text
Cited by 54
- 26 CFR § 1.1245-4 — Exceptions and limitations.
- 26 CFR § 1.1250-3 — Exceptions and limitations.
- 26 CFR § 1.1251-4 — Exceptions and limitations.
- 26 CFR § 1.1252-2 — Special rules.
- 26 CFR § 1.1254-2 — Exceptions and limitations.
- 26 CFR § 1.1381-1 — Organizations to which part applies.
- 26 CFR § 1.1381-2 — Tax on certain farmers' cooperatives.
- 26 CFR § 1.1382-3 — Taxable income of cooperatives; special deductions for exempt farmers' cooperatives.
- 26 CFR § 1.1382-7 — Special rules applicable to cooperative associations exempt from tax before January 1, 1952.
- 26 CFR § 1.1385-1 — Amounts includible in patron's gross income.
- 26 CFR § 1.1388-1 — Definitions and special rules.
- 26 CFR § 1.163(j)-4 — General rules applicable to C corporations (including REITs, RICs, and members of consolidated groups) and tax-exempt corporations.
Show 42 more
- 26 CFR § 1.199A-8 — Deduction for income attributable to domestic production activities of specified agricultural or horticultural cooperatives.
- 26 CFR § 1.246-1 — Deductions not allowed for dividends from certain corporations.
- 26 CFR § 1.402(f)-1 — Required explanation of eligible rollover distributions; questions and answers.
- 26 CFR § 1.403(c)-1 — Taxability of beneficiary under a nonqualified annuity.
- 26 CFR § 1.45R-1 — Definitions.
- 26 CFR § 1.467-7 — Section 467 recapture and other rules relating to dispositions and modifications.
- 26 CFR § 1.48-1 — Definition of section 38 property.
- 26 CFR § 1.501(c)(16)-1 — Corporations organized to finance crop operations.
- 26 CFR § 1.521-1 — Farmers' cooperative marketing and purchasing associations; requirements for exemption under section 521.
- 26 CFR § 1.522-1 — Tax treatment of farmers' cooperative marketing and purchasing associations exempt under section 521.
- 26 CFR § 1.522-2 — Manner of taxation of cooperative associations subject to section 522.
- 26 CFR § 1.522-3 — Patronage dividends, rebates, or refunds; treatment as to cooperative associations entitled to tax treatment under section 522.
- 26 CFR § 1.6012-2 — Corporations required to make returns of income.
- 26 CFR § 1.6042-1 — Return of information as to dividends paid in calendar years before 1963.
- 26 CFR § 1.6044-2 — Returns of information as to payments of patronage dividends.
- 26 CFR § 1.6044-3 — Amounts subject to reporting.
- 26 CFR § 1.6072-2 — Time for filing returns of corporations.
- 26 CFR § 1.617-4 — Treatment of gain from disposition of certain mining property.
- 26 CFR § 16A.1255-2 — Special rules.
- 26 CFR § 301.6104(a)-1 — Public inspection of material relating to tax-exempt organizations.
- 26 CFR § 31.3121(b)(10)-1 — Services for remuneration of less than $50 for calendar quarter in the employ of certain organizations exempt from income tax.
- 26 CFR § 31.3306(c)(10)-1 — Services in the employ of certain organizations exempt from income tax.
- 26 CFR § 53.4960-0 — Table of contents.
- 26 CFR § 53.4960-1 — Scope and definitions.
- 26 CFR § 601.106 — Appeals functions.
- 26 CFR § 601.201 — Rulings and determinations letters.
- 26 U.S.C. § 1245 — Gain from dispositions of certain depreciable property
- 26 U.S.C. § 1250 — Gain from dispositions of certain depreciable realty
- 26 U.S.C. § 1381 — Organizations to which part applies
- 26 U.S.C. § 1388 — Definitions; special rules
- 26 U.S.C. § 168 — Accelerated cost recovery system
- 26 U.S.C. § 246 — Rules applying to deductions for dividends received
- 26 U.S.C. § 3121 — Definitions
- 26 U.S.C. § 3306 — Definitions
- 26 U.S.C. § 337 — Nonrecognition for property distributed to parent in complete liquidation of subsidiary
- 26 U.S.C. § 4960 — Tax on excess tax-exempt organization executive compensation
- 26 U.S.C. § 50 — Other special rules
- 26 U.S.C. § 52 — Special rules
- 26 U.S.C. § 6044 — Returns regarding payments of patronage dividends
- 26 U.S.C. § 7428 — Declaratory judgments relating to status and classification of organizations under section 501(c)(3), etc.
- 26 U.S.C. § 854 — Limitations applicable to dividends received from regulated investment company
- 26 U.S.C. § 860E — Treatment of income in excess of daily accruals on residual interests
Nearby sections (25 sections)
- 503 · Requirements for exemption
- 504 · Status after organization ceases to qualify for exemption under…
- 505 · Additional requirements for organizations described in paragraph…
- 506 · Organizations required to notify Secretary of intent to operate…
- 507 · Termination of private foundation status
- 508 · Special rules with respect to section 501(c)(3) organizations
- 509 · Private foundation defined
- 511 · Imposition of tax on unrelated business income of charitable,…
- 512 · Unrelated business taxable income
- 513 · Unrelated trade or business
- 514 · Unrelated debt-financed income
- 515 · Taxes of foreign countries and possessions of the United States
- 521 · Exemption of farmers’ cooperatives from tax
- 522 · Repealed. Pub. L. 87–834, § 17(b)(2), Oct. 16, 1962, 76 Stat. 1051
- 526 · Shipowners’ protection and indemnity associations
- 527 · Political organizations
- 528 · Certain homeowners associations
- 529 · Qualified tuition programs
- 529A · Qualified ABLE programs
- 530 · Coverdell education savings accounts
- 530A · Trump accounts
- 531 · Imposition of accumulated earnings tax
- 532 · Corporations subject to accumulated earnings tax
- 533 · Evidence of purpose to avoid income tax
- 534 · Burden of proof