The Senate Finance Committee’s Tax Reform Options Paper, which focuses on tax-exempt organizations that could be targeted for reform, included credit unions. The paper did not make specific recommendations regarding which tax exemptions should be eliminated in new legislation. However, it sourced a 2012 Tax Foundation study that did offer specifics, which included the credit union exemption.
According to the Finance Committee website, the group led by Chairman Max Baucus (D-Mont.) and ranking member Orrin Hatch (R-Utah) has been collecting feedback on tax reform options and presenting them in papers. The site also said the papers do not necessarily have the endorsement of either the chairman or ranking member. Baucus has previously said he supports the credit union tax exemption.
CUNA President/CEO Bill Cheney reacted to the paper by urging credit unions to get involved in the trade’s “Don’t Tax My Credit Union” advocacy campaign.
“The release of this document should be a wake-up call for action by credit unions,” Cheney said in a release. “As CUNA has been saying for some time, our tax exemption, and its preservation for the long-term, is actively in the mix of discussion on Capitol Hill, as this options paper clearly shows.”
Cheney also noted that as not-for-profit cooperatives, credit unions return billions of dollars in benefits to consumers each year that far exceed any potential tax revenue.
NAFCU Vice President of Legislative Affairs Brad Thaler said the trade is close to tax reform discussions on Capitol Hill, and continues to hear that lawmakers are averse to tinkering with the credit union tax exemption.
“The document released today is more of an ideas document than a policy or recommendations paper,” Thaler said. “The specific mention of credit unions even is just a citation to an outside report of ideas offered by others. Even so, we continue to monitor all tax reform proposals and discussion papers on the Hill that could potentially affect credit unions.”