WASHINGTON (6/14/13)--The Senate Finance Committee's "tax options" paper on exempt organizations and charitable giving, released Thursday, included two options of particular interest to credit unions, noted Credit Union National Association President/CEO Bill Cheney.
The CUNA leader called the options paper "a wake-up call for action by credit unions."
First, the paper mentions that one option for tax reform could be to "disallow tax-exempt status for certain organizations engaged in business activities, such as credit unions, nonprofit hospitals or certain types of insurance." CUNA had expected credit unions to be mentioned in the report and Cheney noted the paper represents confirmation that credit union taxation is an option that some in the U.S. Congress are considering.
The report also includes a discussion of options to expand Unrelated Business Income Tax (UBIT). While it does not list expanding UBIT to include federally chartered credit unions, the report does include as an option "Revise the UBIT rules for organizations engaged in commercial activity."
"As Congress proceeds to consider comprehensive tax reform, rest assured that we are also monitoring proposals that may alter or impact the application of UBIT on credit unions," Cheney pledged.
The options paper yesterday was the ninth to be released by the committee in recent months. It follows papers on simplifying the tax system for families and businesses, business investment and innovation, infrastructure, international competitiveness, and economic development.
"As CUNA has been saying for some time, our tax exemption, and its preservation for the long-term, is actively in the mix of discussion on Capitol Hill, as this 'options paper' clearly shows. That's why we launched our 'Don't Tax My Credit Union campaign," Cheney said.
He emphasized that credit unions are different from all other groups mentioned in the most recent paper. "We are cooperatives, operating on a not-for-profit basis, and actively returning billions of dollars in benefits each year to our members--benefits that far exceed any new revenue that would come from taxing credit unions.
"We can make the distinction that credit unions are different and preserve our tax status - if we speak up, now. Credit unions should contact their senators and congressmen without delay with the simple message, 'Don't Tax My Credit Union!'," he urged.
The groundbreaking grassroots advocacy campaign to support the credit union tax status combines CUNA's traditional efforts of such things as email-writing drives, with new social media and online outreach efforts.
For more CUNA/league advocacy resources, use the resource links. (And see related News Now story: Tax Reform Group Backs CU Tax Status.)