Colony Farms Cooperative Dairy, Inc. v. Commissioner

OPINION.

Leech, Judge:

By reason of the large amount of business done by petitioner, a cooperative, for its nonmembers, it is not entitled to and does not claim tax immunity. Nor is the question here one of its right to a deduction from gross income in computing net income subject to tax. Our question is its right to exclude from its gross receipts earnings upon business done for or with its members, where, under its charter, bylaws, and marketing contracts with its members, such profits are segregated for return to such members in the form of patronage dividends.

This problem is not new, and…