Oklahoma Agricultural Cooperative Council

Founded in 1973, the Oklahoma Agricultural Cooperative Council (OACC) is a member-supported organization advocating for agricultural cooperatives and their producer members. Our mission is to enhance the understanding of cooperatives and advance their development. The OACC serves as the voice for agricultural cooperatives in the legislative and regulatory affairs process and provides educational resources to help strengthen our member cooperatives. Our members include local, statewide and regional agricultural cooperatives that help their farming and ranching members remain competitive in a global marketplace.

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An Update on the Impact of Tax Reform on Agricultural Cooperatives

Phil Kenkel
Bill Fitzwater Cooperative Chair

Economics has been termed “the dismal science.”  It therefore goes against my training to write anything positive.  That makes it a struggle to describe the impact of tax reform on agricultural cooperatives, because it is basically all good!  The outcome is a tribute both to our state and national cooperative councils and the apparent positive reputation of agricultural cooperatives among legislators.  

The Tax Reform and Jobs Act of 2017 had several provisions that impacted agricultural cooperatives.  First, it reduced the corporate income tax from 35% to 21%.  That reduces the cooperatives tax on non-member profits.  It also means that a cooperative does not have to reduce the cash patronage rate as much, if it wished to issue non-qualified stock while maintaining its cash flow.  Tax reform also gives members a 20% deduction on qualified (cash and qualified stock) distributions.  Finally while the Domestic Production Activities Deduction (DPAD or Section 199) was repealed a new Section 199A was created.

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