Member Dividend Program | TX Communication Provider | GVTC

Member Dividend

Your loyalty pays off!

We're reducing your payment every month*

When you sign up for GVTC services, this special program knocks 20% off your monthly bill. As a co-op, we're focused on helping you save money on our leading-edge entertainment and communication technology. 

What is the GVTC Member Dividend Program?

The Member Dividend Program established by the GVTC Board of Directors provides a monthly dividend to GVTC members. The Member Dividend will be distributed to GVTC members on their monthly invoice and calculated as a percentage of the amount billed for GVTC qualifying services such as telephone, internet, cable tv, security, long distance, etc. This amount will be shown on the member's bill as a Member Dividend beginning June 1, 2018 and is currently calculated at 20% of the qualifying services. The Member Dividend Program may be modified or eliminated at any time by the GVTC Board.

Why is GVTC instituting this new Member Dividend Program?

As a cooperative, GVTC exists to serve its members. GVTC has been successful in generating Non-Patronage earnings (earnings from areas of the business that were not directly generated from GVTC's members, such as dividends, interest, partnership earnings and subsidiary earnings). In accordance with IRS rules, upon Board approval, GVTC may distribute dividends to its members from its Non-Patronage earnings. In the spirit of serving its members, GVTC is pleased to distribute surplus Non-Patronage earnings to its members in an equitable manner that is based on the level of each member's purchase of qualifying services.

How is the Member Dividend amount determined and paid?

Monthly, the GVTC Board will determine an amount, if any, of current year Non-Patronage earnings that will be distributed to members the following month as a Member Dividend on the member's bill. The Member Dividend will be calculated as a percentage of the amount billed for GVTC qualifying services such as telephone, internet, cable tv, security, long distance, etc. This methodology is equitable because it distributes dividends to members proportionally to the GVTC services to which they subscribe. The Member Dividend will not be paid in the form of cash to the member and is not assignable by the member. It is the Board's intent to provide the monthly dividend well into the future as a consistent percentage of the billed amounts for qualifying services, however this is subject to monthly review and determination. As mentioned above, the Member Dividend Program may be modified or eliminated at any time by the GVTC Board.

Are all members eligible for the Member Dividend?

All active members of the Cooperative with a valid a Social Security Number (SSN) or Employer Identification Number (EIN) on their GVTC account are eligible for the Member Dividend. Members that do not provide a valid SSN or EIN to GVTC are automatically ineligible for the program to ensure compliance with IRS Form 1099-DIV issuance rules.

Are Member Dividends taxable?

Yes, Member Dividends are subject to federal income tax in the year the Member Dividend is distributed on the member's bill. GVTC will issue an IRS Form 1099-DIV to the member annually, usually not later than January 31st. Any tax related questions should be directed to a tax professional.

Why Are Member Dividends taxable while Capital Credits are not taxable?

Per IRS regulations, Non-Patronage earnings (earnings from areas of the business that were not directly generated from GVTC's members, such as dividends, interest, partnership earnings and subsidiary earnings), are considered taxable profits and are taxed when earned by GVTC, and also taxed when distributed to members. Per IRS regulations, Patronage earnings (earnings from areas of the business that are directly generated from GVTC's members such as local telephone service and DSL/Fiber internet service) are not considered as profits but rather a return of capital, i.e. Capital Credits, and are therefore not taxable.

What services and charges are not included in the Member Dividend Program?

Certain recurring charges for special circuits, taxes, fees, surcharges, and some non-recurring charges such as late fees, unreturned equipment charges, etc., are not part of the program.

Is there an opt-out provision for the Member Dividend Program?

Yes, active members can opt-out at any time and the 20% dividend (applied as a monthly reduction) will be removed. Please note that approximately 95% of our members choose to participate in this valuable program.

Why do some customers not receive a Member Dividend?

Only active members of the Cooperative with a valid SSN or EIN on file who purchase qualifying services will receive a Member Dividend. To be a member of the Cooperative, an individual or business must purchase local telephone service or DSL/Fiber Internet service inside the Cooperative's certificated serving area. The Cooperative's certificated serving area does not include the cities of Boerne, Blanco or Gonzales.

*Terms & Conditions: GVTC Member Dividends are payable at the discretion of the Board of Directors ("Board") of Guadalupe Valley Telephone Cooperative, Inc. ("GVTC"), consistent with GVTC's Board policies. Member Dividends are distributed on the GVTC bill to current active members with a valid Social Security Number (SSN) or Employer Identification Number (EIN) on their GVTC account, subject to certain restrictions. Member Dividends are not payable as cash, transferable or assignable. Member Dividends are subject to federal income tax, and GVTC will issue an IRS Form 1099-DIV to the member annually. Other restrictions may apply. The Member Dividend program may be modified or eliminated at any time by the Board.