A patron is generally defined as an individual who patronizes a business, meaning they are a customer or client. In the context of taxation, a patron is someone who conducts business with a cooperative but is not necessarily a member of that cooperative.
General Meaning of Patron
Definition
A patron in the broadest sense is someone who supports or frequents a business or establishment. This could include customers, clients, or benefactors who provide financial support or other forms of patronage.
Etymology
The word “patron” is derived from the Latin word “patronus,” which means a protector or supporter. Historically, patrons were often wealthier individuals who sponsored artists, scholars, or charitable activities.
Examples
- Retail Patron: Regular customers at a local bookstore.
- Art Patron: An individual who financially supports a local art gallery.
- Recurring Client: A business patron who regularly uses a specific service, like a freelance consultant.
Patron in Taxation Context
Specific Definition
In the context of taxation relevant to cooperatives, a patron is a customer who engages in business transactions with a cooperative but is not necessarily a member of that cooperative.
Role and Implications
Being a patron in a cooperative can have specific tax implications:
- Patronage Dividends: Cooperatives may distribute part of their earnings to patrons based on their usage of the cooperative, which can have tax consequences.
- Deductibility: These dividends are often deductible to the cooperative but must be included as taxable income by the patron.
Example in Cooperatives
If a farmer buys supplies from an agricultural cooperative but does not hold membership status, that farmer is considered a patron. If the cooperative issues a patronage refund, the farmer must report this as income, regardless of their non-member status.
Historical Context
Historically, the concept of patronage has been crucial in several domains:
- Art and Culture: Patrons like the Medici family in Renaissance Italy supported artists such as Michelangelo and Leonardo da Vinci.
- Education and Scholarship: Wealthy patrons often funded educational institutions, libraries, and researchers throughout history.
Comparison with Related Terms
Customer vs. Patron
- Customer: Primarily engages in transactions for goods or services.
- Patron: May also include a sense of support or sponsorship, beyond mere transactions.
Benefactor vs. Patron
- Benefactor: Usually donates money or resources without expecting a direct service or product in return.
- Patron: May engage both in financial support and purchasing goods or services.
Related Terms
- Client: A person or organization using the services of a lawyer or other professional.
- Sponsor: An individual or organization that provides financial support for a project or activity.
- Donor: Someone who gives something, particularly to a charitable cause.
- Member: An individual who formally joins an organization, often involved in its governance and benefiting from its services.
FAQs
How is a patron different from a member in a cooperative?
What are patronage dividends?
Are patronage dividends taxable?
Can a patron become a member of a cooperative?
References
- Smith, J. (2019). Cooperative Principles and Patronage. Cooperative Press.
- Brown, A. (2020). Taxation for Cooperatives. Tax Law Journal.
- Johnson, M. (2021). Economic Models of Patronage. Economics & Finance Review.
Summary
In essence, the term “patron” encompasses a customer or supporter of a business and extends to individuals who conduct business with cooperatives without being members. This dual usage spans various contexts from general commerce to specific tax-related definitions within cooperative frameworks, highlighting the nuances in how patronage operates in different spheres. Understanding this term’s implications can greatly benefit anyone engaged in business, economic studies, or cooperative activities.
