Earnings from the co-op are distributed to members based on their purchases during the year. Earnings are returned to members either as equity or cash, depending on each co-op’s financial situation.
The cash portion is paid out to you each year.
The equity portion is your money that is being held back by the co-op to help finance the business, and maintain and upgrade assets to ensure ongoing success.
Equity is normally paid out:
- when you move away from the trading area or
- when you reach a certain age as specified by the Board of Directors (69) or
- when the equity is paid to your estate
Is my cash refund taxable?
- A tax of 15% is withheld from refunds exceeding $100.
- If your purchases are for personal use they are not taxable and you can claim back this amount as pre-paid income tax by using box 22 of your T4A and including this amount on line 437 of your income tax return.
- If your purchases are for business purposes the amount of your refund can be included as part of your income tax calculation.
For a detailed example of a Sherwood Co-op Equity Statement please see the link below.