Texas Senate and House Tax Plans Would Keep Credit Unions Exempt
AUSTIN, Texas -With just four weeks left in the 79th legislative session, the debate on how to fund the state's public school system is moving forward. And, Texas credit unions are cautiously optimistic they will maintain their tax exemption at least through the 2006-2007 biennium. Not-for-profit credit unions remain exempt under both the House-passed tax plan and are expected to be exempt under the Senate's emerging plan. The Senate's version, SB 1 by Sen. Steve Ogden (R-Dist. 5), was pending in committee May 3. At the Texas Governmental Affairs Conference, Lt. Gov. Dewhurst announced his support for credit union exemption under the state's existing franchise tax, and he is standing by his word. Although at press time details of the Senate's plan had not been released, sources around the state house have shared some of the plan's key elements. Most important to state-chartered credit unions, according to Allison Castle, TCUL Communications Director, Advocacy, the bill retains the current franchise tax exemptions. The House bill, HB 3 by Rep. Jim Keffer (R-Dist. 60), allows businesses the option of filing under the current franchise tax or under a new payroll tax. Credit unions would retain their exemption. Consensus between the Senate and House tax plans remains elusive, but tax exemption is preserved under either approach. It would be difficult, but not impossible, for conferees to reverse the exemption from here on, Castle said. "Things are looking positive for us. We hope the House and Senate are able to resolve the issues by May 30, sine die, or we could be looking at a special session this summer," she said.