Charlotte-based department store company Belk, Inc. is joining a parade of firms paying special dividends in advance of widely-anticipated tax increases next year, the company said Wednesday.
“In view of the prospect of significant tax increases on dividend income, we felt it was in the best interest of our stockholders to pay these dividends before year end,” said CEO Tim Belk, in a statement. “It is a priority for Belk to provide returns to our stockholders, and we will continue to strive to increase the value of their investment in our company.”
Belk, which is privately held, said it will pay a special 25-cent dividend on Dec. 21. The company also announced it will pay its regular dividend of 75 cents a share at the same time, instead of in April, when it is normally paid. The Belk family still holds most of the company’s stock.
Dividend tax rates were cut to 15 percent under the Bush-era tax cuts. That rate is scheduled to expire in January, leading to likely tax increases on dividends. A tax increase could also be part of a deal to avert the “fiscal cliff” of spending cuts and tax increases set to take effect next year.
More than 170 companies, including Wal-Mart, Whole Foods, Costco, Cato, and casino firm Las Vegas Sands, have announced similar plans for special or accelerated dividends ahead of the end of the year.