PUBLIC LAWS--CH. 289-MAY 28, 1938 Marketing products of nonmembers and making purchases. Federal business disregarded. Exempt corpora- tions financing crop operations of mem- bers. Corporations as trustees for exempted organizations. Instrumentalities of the United States. Voluntary employ- ees' beneficiary asso- ciations. Teachers' retire- ment fund associa- tions. Religious, etc., asso- ciations having a oom- mon treasury, etc. a reasonable reserve for any necessary purpose. Such an associa- tion may market the products of nonmembers in an amount the value of which does not exceed the value of the products marketed for members, and may purchase supplies and equipment for non- members in an amount the value of which does not exceed the value of the supplies and equipment purchased for members, pro- vided the value of the purchases made for persons who are neither members nor producers does not exceed 15 per centum of the value of all its purchases. Business done for the United States or any of its agencies shall be disregarded in determining the right to exemption under this paragraph; (13) Corporations organized by an association exempt under the provisions of paragraph (12), or members thereof, for the purpose of financing the ordinary crop operations of such mem- bers or other producers, and operated in conjunction with such association. Exemption shall not be denied any such corporation because it has capital stock, if the dividend rate of such stock is fixed at not to exceed the legal rate of interest in the State of incorporation or 8 per centum per annum, whichever is greater, on the value of the consideration for which the stock was issued, and if substantially all such stock (other than nonvoting preferred stock, the owners of which are not entitled or permitted to par- ticipate 2 directly or indirectly, in the profits of the corporation, upon dissolution or otherwise, beyond the fixed dividends) is owned by such association, or members thereof; nor shall exemp- tion be denied any such corporation because there is accumulated and maintained by it a reserve required by State law or a reason- able reserve for any necessary purpose; (14) Corporations organized for the exclusive purpose of hold- ing title to property, collecting income therefrom, and turning over the entire amount thereof, less expenses, to an organization which itself is exempt from the tax imposed by this title; (15) Corporations organized under Act of Congress, if such corporations are instrumentalities of the United States and if, under such Act, as amended and supplemented, such corporations are exempt from Federal income taxes; (16) Voluntary employees' beneficiary associations providing for the payment of life, sick, accident, or other benefits to the members of such association or their dependents, if (A) no part of their net earnings inures (other than through such payments) to the benefit of any private shareholder or individual, and (B) 85 per centum or more of the income consists of amounts collected from members for the sole purpose of making such payments and meeting expenses; (17) Teachers' retirement fund associations of a purely local character, if (A) no part of their net earnings inures (other than through payment of retirement benefits) to the benefit of any private shareholder or individual, and (B) the income con- sists solely of amounts received from public taxation, amounts received from assessments upon the teaching salaries of mem- bers, and income in respect of investments; (18) Religious or apostolic associations or corporations, if such associations or corporations have a common treasury or community treasury, even if such associations or corporations engage in business for the common benefit of the members, but ony if the members thereof include (at the time of filing their returns) in their gross income their entire pro-rata shares, whether distributed or not, of the net income of the association or corporation for such year. Any amount so included in the gross income of a member shall be treated as a dividend received. 482 [52 STAT.
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