Taxes that work for your community
During the month of April, taxes are on nearly everyone’s mind. Even organizations that may not pay income taxes, like your not-for-profit electric cooperative, are busy getting all of their IRS forms submitted for their annual reporting.
As Manager of Finance and Accounting Wendy McElvain explains, “People often have the impression that cooperatives like Cuivre River are tax exempt. As a Missouri 501(c)12 corporation, it does not owe income tax, but it is not tax exempt.”
Why no income tax? Technically, there is no income.
“In a cooperative, if revenue exceeds expenses to provide your service, the revenue is neither ‘income’ nor ‘profit.’ It’s patronage capital that is credited to you and used on your behalf until it can be refunded back to you.”
However, that still leaves a lot of taxes to pay. In 2017 Cuivre River’s tax bills for real estate (on power lines and property) and personal property (on equipment and vehicles) totaled nearly $2.8 million, up $127,000 from last year.
Cuivre River also pays payroll taxes, plus sales taxes on everything purchased to run the office and build power lines — from paper clips to wires, poles and bucket trucks.
“The good news: local tax dollars go right to work in our local communities,” McElvain adds. These taxes help support schools, libraries, hospitals, emergency services, roads, bridges and much more.