New GAO Report Puts $1.1 Billion Price Tag on 2011 CU Exemption
A U.S. Government Accountability Office report released Monday said the Treasury’s estimated corporate revenue loss due to the credit union tax exemption was $1.1 billion in 2011.
That’s below the 2014 Obama budget figure of $1.44 billion in 2012, but more than double the Congressional Joint Committee on Taxation’s 2012 estimate of $500 million, also for 2012.
Obama Budget Boosts CU Tax Exemption Hit
The GAO’s Corporate Tax Expenditures report said that of the $181 billion in estimated corporate tax revenue losses, 81% was concentrated in the international affairs and housing and commerce budget functions, exceeding their federal outlays.
The credit union exemption is categorized under housing and commerce but represents just 0.61% of corporate tax revenue losses, the report said.
“The 24 tax expenditures used only by corporations in 2011 provide support intended to encourage certain activities, such as energy production, or provide support for certain entity types, such as credit unions,” the report said.
The GAO also included a special section, one of four, that explained the historical basis of the credit union tax exemption. It cited the H.R. 1151, the Credit Union Membership Access Act of 1998, which said credit unions retain exemption because of their “cooperative, not-for-profit structure, which is distinct from other depository institutions, and because credit unions historically have emphasized serving people of modest means.”