Utah CU Tax Group Argues for Taxation of Certain CUs

WASHINGTON-The Council for Sound Tax Policy, a group of concerned citizens spawned by bank officials, have submitted a report to the president's advisory panel on tax reform. The CSTP submitted a five-page report to the panel April 29 including specific criteria to create a policy for applying a regular income and sales tax to non-traditional credit unions it feels have clearly out-grown their tax-exempt status. These non-traditional credit unions would include large community charters, single common bonds with expansive affinity rules, association credit unions with "sham" associations, multiple common bond credit unions, those with significant business loan portfolios, and credit unions that provide or participate in services to non-members. The CSTP's recommendations would maintain the tax exemption of 87% of all credit unions, the group said. "As these aggressive-growth credit unions grow in scope and numbers, more and more economic activity is coming out of the tax base. This is a real and growing drain on public revenues and it is affecting local, state and federal government programs," CSTP president Hugh Matheson said. "Our hope is that the panel will realize that when the aggressive-growth credit unions are tax-exempt the burden is shifted to the American taxpayer. Federal Government must act now to reexamine these outdated tax exemptions."