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Frequently Asked Questions:


What are capital credits?

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


What is a patronage allocation?

Patronage allocation is the term applied to the act of determining each member’s share of the margin and the notification to the member of what their individual allocation for the year is.


What is a distribution?

Actual payments, called distributions, 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 co-op for any proper purpose such as facility/plant upgrades and payment of debt.


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

Current customers of the cooperative (those who currently get their local phone service through the cooperative) will automatically get any distributions declared mailed to them at their billing address. 


What services do I receive patronage dividends for?

Patronage dividends are based on a percentage of local phone, long distance, broadband internet, and SGC-TV.


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.

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