Dorman Products to pay special dividend of $1.50
COLMAR, Pa. (AP) — Dorman Products Inc., which distributes parts to automotive retailers, said Wednesday that it will pay a special cash dividend of $1.50.
The Colmar, Pa.-based company said the dividend will be paid on Dec. 28 to shareholders of record as of Dec. 17.
Dorman Chairman and CEO Steven Berman said the dividend returns some of the company's profits to shareholders in a "tax efficient manner."
Dorman is the latest company to move up its quarterly payout or issue a special end-of-year payment to protect investors from potentially having to pay higher taxes on dividend income starting in January.
Many companies are reviewing their dividend policies now that it appears investors could soon pay higher taxes. Since 2003 investors have paid a maximum 15 percent on dividend income. 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.