Credit Union Tax Status Untouched in Senate Reform Report
July 10, 2015
July 10, 2015
The U.S. Senate Finance Committee working group charged with examining the business income tax code released its report Wednesday with recommendations for reforms. It contained no mention of altering credit unions’ tax status in any way.
The working group was launched in January to spur congressional tax reform efforts in the 114th Congress.
Northwest credit unions have been highly engaged in advocacy efforts to protect the credit union tax status, including producing thousands of contacts to Congress as part of the Don’t Tax My Credit Union initiative, as well as working closely with Oregon Senator Ron Wyden, Ranking Member of the Senate Finance Committee, to provide data highlighting the value of the tax exemption to credit union members and Northwest communities.
Protecting the credit union tax status remains a top credit union movement priority. CUNA, NWCUA, and the rest of the state credit union leagues made credit union voices heard during the working group’s proceedings. Collectively, CUNA and the leagues have been successful in countering a number of inaccurate bank attack ads that have increased in frequency.
The Northwest Credit Union Impact Report showed that credit unions’ impact on the economy of Oregon and Washington totaled $6.8 billion, with $352 million in direct member benefits.
CUNA estimates consumers saw benefits of $12 billion in savings in 2014 alone, due to credit unions’ lower fees, lower rates and higher yields on deposits. Approximately $2 billion of these savings affect bank customers due to credit unions’ competitive effect on the financial services market.
The Business Income Tax Reform Working Group was co-chaired by Sens. Thune and Ben Cardin (D-Md.). The report does mention several structural reforms–outside of the credit union system–to create a business tax code that would “promote tax neutrality and economic growth.”
These reforms include uniformly taxing business income and removing disincentives to save and invest. There is also mention of a potential provision that would require mandatory e-filing of all Form 990s.
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