Patronage Information

When you sign up for communication services from BCT, you become a member of a cooperative association with more than 115 years of member service experience and technical expertise. Membership establishes your ownership in the cooperative and guarantees access to quality services that support your lifestyle. You earn dividends, or capital credits, based on the qualifying services you subscribe to and the overall financial success of the cooperative. The membership elects a Board of Directors to represent members’ interests, set policies, and ensure the company’s success. You earn capital credits based on the services you subscribe to, or in other words, your patronage to the cooperative.

Frequently Asked Questions

What are capital credits?

BCT is a cooperative. When you signed up for communication service(s) with us, you established your equity interest in the association. In other words, you became a part owner of BCT. As a member cooperative, BCT seeks to provide members with the highest quality service at the most affordable rates. At the end of each fiscal year, BCT allocates margins to each member on a prorated basis according to the total amount paid for communication services(s). These allocations are known as patronage dividends or capital credits. Upon approval of the Board of Directors, these allocations are refunded to our members through patronage distributions.

What is a patronage allocation?

An allocation is the process of adding the amount earned for the year to your capital credit account. At the end of each year BCT allocates margins to each member on a prorated basis according to the total amount paid for all qualified services.

What is a distribution?

What is shown on the letter is the allocation of any net proceeds the cooperative had for the prior year. Actual payments, called a distribution in the form of patronage dividends, are made at the discretion of the Board of Directors.

Why are patronage allocations not paid-out when allocated?

Net margins are a source of working capital provided by the members and are used by the cooperative for any proper purpose such as facility/plant upgrades and payment of debt.

How often does the Board of Directors declare that a distribution should be made?

According to the cooperative bylaws, “Credits to members’ equity account may be retired by the Board of Directors at its discretion and direction as to timing, method and type of retirement.” There is no schedule as to when distributions are made.

Do I need to contact the cooperative each year to see if any distribution has been declared?

Current members of the cooperative (those who currently receive communication service(s)) will automatically receive any distributions declared mailed to their billing address. Those members who no longer receive local service from the cooperative will be mailed a distribution notice to their last known address. This notice will contain a form to sign and return to the cooperative letting us know that it is acceptable to send the check to that address and to notify us of any address change. It is important to keep the cooperative informed of any change of address.

What services qualify for patronage dividends?

Members that reside in our service area receive capital for all subscribed BCT products and services including telephone lines, calling features, high-speed Internet, BCT long distance, yellow page ads, anything included in a service bundle, and any other qualified service billed on your BCT billing statement.

Are payments of patronage dividends taxable?

If the cost of the service was not taken as a deduction on your tax return when the service was received, the return of the excess paid for the service (patronage dividend payments) is not taxable income. However, most businesses claim telephone service provided to the business as a business expense and therefore would have to claim patronage dividends as income. The cooperative cannot advise its members on tax issues. You should check with your tax advisor.