The Bon-Ton Stores Inc. is paying its quarterly dividend early while tax rates on dividend income are still low.
The retailer with dual headquarters in Springettsbury Township and Milwaukee said a dividend of 5 cents is payable Dec. 21 to shareholders of record as of Dec. 14.
The retailer would normally issue the payment during the first quarter of 2013, but the company is releasing the payment sooner in anticipation of "likely increases in taxes," referring to effects of the fiscal cliff.
For the past nine years, investors have paid no more than a 15 percent tax rate on dividend income. That historically low rate is set to expire Jan. 2 unless federal lawmakers reach a compromise on tax increases and spending cuts.
Without intervention, taxes on dividend income will be levied based on which income bracket a taxpayer is in. For example, the highest earners would pay 43.4 percent on dividends.
Bon-Ton is one of several companies to recently announce an early dividend payout. Others include American Eagle, Best Buy, Coach, Costco Wholesale Corp., DSW, Family Dollar and Wal-Mart Stores.
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