Throwing the equivalent of a political "Hail Mary," the Independent Community Bankers of America is asking House-Senate conferees on the tax overhaul bill to reconsider their decision to leave the credit union tax exemption intact.
"ICBA and community banks across the nation are disappointed that the tax reform process has, thus far, ignored the significant and increasing base erosion caused by the burgeoning tax-exempt credit union industry and tax-advantaged Farm Credit System," ICBA President/CEO Camden Fine said in a letter to the leaders of the tax conference committee on Thursday. "This is a glaring omission."
The House and Senate have passed their plans to overhaul the tax code and conferees now have the responsibility to reconcile differences between the two.
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Since neither bill touched the credit union tax exemption, any attempt to change the exemption would be subject to a point of order. That point of order could be overcome through a rule in the House. However, the point of order would take a super majority in the Senate—a threshold that would be difficult to overcome.
Fine said that tax reform has "involved tough choices and tradeoffs," adding that conferees could recover billions of dollars in revenue by taxing credit unions.
He said that if conferees do not want to repeal the exemption outright, "there are numerous options for curtailing them based on asset size, activities, or some combination."
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