Login to View Full Member Content:

Tax Committee Staff Clarifies: No Intention to Impose Additional Tax on CUs -Including UBIT

The specific credit union tax status is left untouched in a tax reform plan released Wednesday by House Ways and Means Committee Chairman Dave Camp (R-Mich.), and staff of the tax writing committee have clarified that the proposal has "no intention of imposing any additional taxes on credit unions." The discussion draft of the tax reform plan does not change or eliminate the specific credit union federal tax exemption. CUNA President/ CEO Bill Cheney said the association considered that to be "an endorsement of our long-held position that credit unions' cooperative, not-for-profit structure remains the bedrock upon which the tax exemption is built."

"Reinforcing our position over the past nine months were the actions by CUNA, state associations and credit unions, which together amassed 1.3 million contacts with lawmakers urging them 'don't tax my credit union,'" Cheney added.

However, as CUNA experts were reviewing the details of the discussion draft of the proposal yesterday afternoon, they found that the provisions addressing taxes on unrelated business activities (or UBIT) seemed to subject federal credit unions to the tax for the first time. CUNA senior staff, early Wednesday evening, contacted senior staff of the House Ways and Means Committee, pointing out the impact of the UBIT provisions on federal credit unions and asking why the provision had been applied.

"As a result of our discussion, the Ways and Means Committee senior staff members told us that it was never their intention to impose any additional taxes on federal credit unions," Cheney said after the discussion. "Further, they told us that anything that would impose taxes on credit unions--including UBIT--was unintentional and that is why they have established a process that includes release of a discussion draft."

[read more]

[related: Risk-Based Capital Rule Comments Due 90 Days from Today]
[related: Millions Exposed to 'Don't Tax' Message by CUNA Social Media Blitz]

"This is good news indeed for credit unions," noted League President Rick Pillow. "But it is important we remember this is one step on a very long journey. We will continue to push for preservation of our tax exemption as we reach out to our Congressional delegation, and you can help us by providing the information we need to show how credit unions earn their tax exemption each and every day."

Our Reality Check and Community Involvement surveys take only a few minutes each to complete, but they provide valuable information about our service to members and our communities, information our lawmakers need and want to hear.

Help us out by completing your survey today!

And many thanks to the following credit unions for having already completed the Reality Check survey!

  • Fairfax County FCU
  • URW Community FCU
  • Richmond Fire Department CU
  • Freedom First CU
  • Argent CU
  • Member One FCU
  • Virginia United Methodist CU
  • PWC ECU
  • Celco FCU
  • Resources FCU
  • Chesterfield FCU
  • CommonWealth One FCU
  • Peoples Advantage FCU
  • Norfolk Fire Department FCU
  • First NRV FCU
  • DuPont Community CU
  • Fort Lee FCU
  • Park View FCU
  • Mountain Empire FCU
  • Assurance FCU
  • Blue Eagle FCU

And here are those that completed the Community Involvement Survey...Thanks!

  • Hopewell Chemical FCU
  • Bronco FCU
  • Park View FCU
  • Connects FCU
  • Argent CU

Tags: UBIT, Don't Tax My CU, tax exemption, Reality Check

Comments

Add New Comment