CU Tax-Exemption Estimated At $8.2 Billion 2007-11

WASHINGTON-Every year, when the president’s budget comes out, it includes the annual estimates for tax expenditures. Among those is the credit union tax-exemption, a figure that the banking groups often use against credit unions. According to the budget’s “Analytical Perspectives,” credit unions’ tax-exemption cost the Treasury $1.29 billion in 2005. That figure is expected to jump to $1.37 billion by the end of this year. From 2007 through 2011, the budget estimated the credit union tax-exemption to be worth $8.22 billion. However, that does not account for legal tax avoidance measures that credit unions would likely take, CUNA Chief Economist Bill Hampel said. Typical tax avoidance measures could take anywhere from 10% to 50% per credit union off their hypothetical tax obligations, he said, adding that the bigger the institution, the higher the percentage saved.