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MILWAUKEE-Eighty-seven settlement agreements have been reached between the State of Wisconsin and its banks, which have been accused of using subsidiaries in Nevada to evade state taxes, a Dec. 2 report in the Wall Street Journal stated. The agreements settled on total $24 million in payments of back taxes, state Department of Revenue spokeswoman Eva Robelia said. The figure is just $1 million over the September numbers when the department announced it had 26 agreements but many of the ones since September have involved small banks, the Journal reported. At least 80 more settlements are being worked out. Wisconsin banks used subsidiaries in Nevada to transfer loans and other assets, where there is no corporate income tax, to evade Wisconsin’s 7.9% tax. “We’ve been aware of this story since it first broke last year in the Madison, Wisconsin newspapers,” CUNA Senior Vice President of Governmental Affairs John McKechnie said. CUNA was quick to jump on the story earlier this year, pointing out banks’ hypocrisy in trying to get credit unions taxed. “Frankly,” he continued, “we were appalled at the hypocrisy of the banks. So much so, that since then we have taken action to inform key members of the Congress about what these banks have been up to. That is, setting up tax avoidance schemes in Nevada while decrying the credit union tax exemption.” In response to the state’s action, McKechnie added, “We are pleased that the state has taken action, but we have to wonder that, had this issue not ever faced public scrutiny, would any action at all have taken place? Bankers continue to bad-mouth credit unions before Congress. As in the case of the Wisconsin banks, we will use every opportunity to show Congress how shallow are the banks’ statements, particularly when compared to their own activities.” Taxing credit unions at the federal and state levels has been a top priority of banks across the nation for a number of years. Earlier this year, House Ways and Means Committee Chairman Bill Thomas (R-Calif.) said he was interested in looking into whether certain nonprofits will deserve their tax exemption, including credit unions. [email protected]

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