Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 66-53

1966-1 C.B. 206

Sec. 1385
Sec. 1388
Sec. 1441
Sec. 1442

Full Text

Rev. Rul. 66-53

A domestic cooperative is engaged in the purchase of lubricating oils and allied products and in the sale of them in the United States to its member patrons on a cooperative basis. The savings resulting from purchasing on a cooperative basis are distributed as patronage dividends to its member patrons, some of whom are nonresident aliens and foreign corporations or foreign cooperatives not doing business in the United States.

Held , under sections 1441 and 1442 of the Internal Revenue Code of 1954, the domestic cooperative is required to withhold tax on these patronage dividends distributed to the nonresident patrons since these amounts are fixed or determinable annual or periodical income from sources within the United States.