Clover Farm Stores Corp. v. Commissioner
United States Tax Court
Petitioner, whose stockholder-members were wholesale grocers, was organized to administer a system of merchandising in the food and grocery field which would enable wholesalers and their retail customers to meet chain store competition. Under the plan agreements were entered into between petitioner and the wholesalers, and between the wholesalers and retailers in their territories.
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Petitioner, whose stockholder-members were wholesale grocers, was organized to administer a system of merchandising in the food and grocery field which would enable wholesalers and their retail customers to meet chain store competition. Under the plan agreements were entered into between petitioner and the wholesalers, and between the wholesalers and retailers in their territories. Amounts paid by wholesalers for services under petitioner-wholesaler agreements were substantially equivalent to amounts paid by retailers to wholesalers under wholesaler-retailer agreements, but services rendered…
1Opinion of the Court
OPINION.
Raum, Judge:
Petitioner is a corporation organized for profit, and does not claim to be exempt from taxation under section 101. or any other provision of the Internal Revenue Code. It does contend, however, that its gross income must be reduced by patronage dividends which it paid to its stockholder-members, and the Commissioner does not disagree that such reduction is proper, provided that the amounts involved are true patronage dividends.
The concept that “patronage dividends” paid by a corporation may operate to reduce its gross income (or constitute a “deduction” therefrom) is not…
2Cases cited5 opinions
- Farmers Cooperative Co. v. BirminghamDistrict Court, N.D. Iowa · 1949
- Uniform Printing & Supply Co. v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1937
- Co-Operative Oil Ass'n v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1940
- Colony Farms Cooperative Dairy, Inc. v. CommissionerUnited States Tax Court · 1951
- Farmers' Union Co-Op. Ass'n v. CommissionerUnited States Board of Tax Appeals · 1928
3Cited by1 opinion
- Clover Farm Stores Corp. v. CommissionerUnited States Tax Court · 1952