Costco pays special 'fiscal cliff' dividend to investors

Costco is paying shareholders a special dividend of $7 per share, in addition to the regular quarterly payout the wholesaler gives investors. Costco is one of many companies making special payouts because investors may have to pay higher taxes starting in January. 

Rick Bowmer/AP/File
In this May 2012 file photo, David Lee shops at a Costco Wholesale store, in Portland, Ore. Costco is adding a special dividend to its quarterly payout to investors in anticipation of investor tax rates possibly rising in January.

Costco plans a special dividend of $7 per share next month in addition to the regular quarterly dividend the wholesale club operator pays shareholders.

The Issaquah, Wash., company said Wednesday that the special dividend will be payable Dec. 18 to shareholders of record Dec. 10. Costco Wholesale Corp.'s regular quarterly dividend of 27.5 cents per share will be paid Nov. 30 to shareholders of record as of Nov. 16.

Costco also said Wednesday that its November revenue climbed nearly 9 percent to $8.15 billion. Revenue from stores open at least a year climbed 6 percent. The increase was 5 percent excluding gains from gasoline price inflation and stronger foreign currencies.

Revenue from stores open at least a year is a key gauge of a retailer's health because it excludes results from stores recently opened or closed.

Costco's shares rose 4.7 percent, or $4.49, to $101 in premarket trading.

Many companies are making special end-of-year dividend payments or moving up their quarterly payouts because investors may have to pay higher taxes on dividend income starting in January.

Investors have paid a maximum 15 percent on dividends since 2003. But that historically low rate will expire in January unless Congress and President Barack Obama reach a compromise on taxes and government spending.

As it stands, dividends will be taxed as ordinary income in 2013, the same as wages, so rates will go up depending on which income bracket a taxpayer is in. For the highest earners, the dividend rate would jump to 43.4 percent.

Even if a compromise is reached, there's no guarantee that the tax rate for dividends will remain at its current level.

Costco runs 618 warehouses in several countries, including 447 in the United States and Puerto Rico.

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