WASHINGTON-Bankers' complaints about the credit union tax exemption have ranged from an "unlevel playing field" to calling them downright unpatriotic. Yet, Federal Deposit Insurance Corporation data compiled by NAFCU showed that in addition to the more than 2,000 Subchapter S banks that do not pay income taxes, another 692 for - profit banking institutions either did not pay income taxes last year or received a refund. Not all of these institutions are small or in poor financial health, either. The largest bank receiving a return on its income taxes was $18.4 billion RBC Centura Bank of Rock Mount N.C., which got a $27 million return, but its net income was a negative $124 million. However, $10.7 billion people's Bank of Bridgeport, Conn, got an $8.5 million return with nearly $200 million in net income. Four other billion banks also had positive net incomes and received tax returns. The problem with being tax-exempt, as credit unions are, is you also do not receive tax returns. However, at least one former credit union, $88 million Bank @lantec, received $217,000 back from the U.S. Treasury in 2004. On the other hand, former credit union $124 million in assets BUCS Federal paid $330,000 in taxes last year. Additionally, $162 million Lusitania Savings Bank, FSB, got a $1.1 million tax bill and Rainier Pacific Bank, with $750 million in assets, paid $1.3 million in taxes for 2004. Whether a bank pays taxes or not is "dependent on their activity and whether their accountants are really good," NAFCU Chief Economist Tun Wai said. He added that there might be more banks receiving tax refunds now because of the point in the economic cycle. Banks are being deceptive when they claim that they all pay taxes, Wai said, between these 692 banks and the Subchapter S charters. The American Bankers Association did not return a request for comment. Given the bankers' "equal pain for everybody" philosophy, they might have better success if they just work to reduce their own taxes rather than trying to tax credit unions, Wai said, which they have proven they can do through accounting of Subchapter S charters. "If you're more laissez faire, as the Republicans tend to be, they might be more successful," he stated. -email@example.com
Nearly 700 Non-Sub S Banks Avoid Paying Taxes or Get a Return
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