UPDATE: Credit Unions' Tax Exemption Status
Credit unions celebrated a victory in early March when Rep. Dave Camp (R-Mich.), chairman of the House Ways and Means Committee, introduced a “draft” corporate tax reform plan that maintains credit unions’ current federal income tax exemption, as long as they remain nonprofit entities. If passed, the measure would go into effect Jan. 1.
“Our top issue has been preserving the credit union tax exemptions, which have been in place since 1917,” said Bill Cheney, president and chief executive of the Credit Union National Association. “This is not some new-fangled, late-breaking tax loophole. This has been around a very long time.”
“Credit unions aren’t banks, and it doesn’t make sense to tax them like they are,” said Rep. Derek Kilmer, (D-Wash.).
Rep. Shelley Moore Capito (R-W.Va.) agreed: “Credit unions need a great deal of regulatory flexibility to meet the needs of their members,” she said. “One-size-fits-all Washington regulations simply don’t work.”
Across America, credit union supporters joined forces to send over 1.3 million messages to lawmakers urging them “Don’t Tax My Credit Union.” These efforts clearly made a difference – but, until the measure passes, we cannot let our guard down. Stay tuned to wwwDontTaxMyCreditUnion.org for the latest news.
2013 Don't Tax My Credit Union Campaign
Since credit unions earnings benefit their member-owners and they are volunteer-driven, they are not-for-profit and therefore tax exempt from State corporate and Federal income taxes. Credit unions do pay payroll taxes, sales taxes, and property taxes.
But, there's talk in Washington about imposing new taxes on credit unions, ones that would fundamentally change, or even eliminate, credit unions.
Some bankers and legislators say that taxing CUs would help balance the budget. 96 million, 40%, of Americans are credit union members, but credit unions hold only 6% of all financial assets while banks hold 93%.
Taxing CUs won't dent the budget deficit, but it will hurt the people who depend on them and our economy.
For every $1 in new credit union taxes, the government wipes out $10 in credit union member benefits - and that takes money out of the hands of 96 million credit union members.
While banks and some Washington politicians believe they are raising taxes on credit unions, they are really raising costs on the middle class - the individuals and families that credit unions serve. Essentially, it is an effort for banks to make more profit. But you didn't save your money to make someone else rich.
Credit unions provide competition to banks by giving consumers a CHOICE. Banks and credit unions have always been different for a reason. And, if you like the difference, you can help make a difference.
Visit www.DontTaxMyCreditUnion.org to find out more details. Or, click here to start an e-mail to your legislator.
What is Don't Tax My Credit Union?
Don’t Tax My Credit Union is a national campaign dedicated to ensuring Congress doesn’t raise taxes on 96 million credit union members nationwide and preserves financial choice for American consumers.
Join us today to share your story and tell Congress: "Don’t Tax My Credit Union!"