29 January 2018 External T.I. 2017-0702731E5 - Patronage dividends and partnerships -- summary under Paragraph 96(1)(a)

Can a cooperative corporation, that is a member of a limited partnership, deduct patronage dividends computed on the basis of sales made by the partnership to its customers who are members of the cooperative corporation? In responding negatively, CRA indicated that this approach would be contrary to “customer” being defined in s. 135(4) as a customer of the “taxpayer,” which under the s. 96(1) assumptions was to be treated as the partnership rather than its member.