Most of America's electric cooperatives are tax-exempt organizations under Internal Revenue Code (IRC) Section 501(c)(12). In order to maintain tax exempt status, an electric cooperative must receive at least 85 percent of all income from its members. P.L. 115-97 amended Section 118 of the IRC to provide that contributions to a corporation by a non-shareholder government entity or civic group is no longer considered capital. Under prior tax law, such contributions were capital and excluded from the income of a corporation.

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