Like all other businesses, cooperatives pay taxes on real estate, personal property, sales, employment, utilities, and more. Cooperatives are subject to single taxation, similar to most businesses, except for C-corporations, which are taxed twice—once at the entity level and again at the stockholder level.

While single tax treatment is not unique to cooperatives, the taxation of patronage refunds is distinct. The net margin (income minus expenses) is not considered taxable income for the cooperative because it is distributed back to members as patronage refunds. Instead, these refunds are taxed at the patron level, ensuring that taxation aligns with the cooperative principle of member benefit.