HIGHTSTOWN, N.J. (8/11/15)--Here’s a list of a few of the taxes credit unions pay: Real estate taxes, payroll taxes, business income taxes, sales taxes and use taxes.
That’s certainly not “no taxes,” as banking trade associations nationwide would like to have consumers and lawmakers believe.
A pair of credit union leaders in New Jersey reminded constituents in their state recently that, despite assertions made in a recent bank-authored op-ed, credit unions--and their member-owners--do in fact pay taxes.
What’s more, many of the banks claiming that credit unions don’t deserve their not-for-profit tax status--despite being not-for-profit financial institutions--actually don’t pay corporate taxes themselves.
“Credit unions are exempt from Federal corporate income tax because of their structure as member-owned, not-for-profit financial cooperatives that promote thrift and provide members access to credit,” said John Gibardi, president/CEO, Entertainment Industries FCU, New York (The Bergen Dispatch Aug. 9).
“In fact, when it comes to Federal corporate and personal income taxes, credit unions are taxed identically to one-third of all U.S. banks, those established under Federal law as ‘Subchapter S’ corporations,” Gibardi added.
The op-ed to which Gibardi and Greg Michlig, New Jersey Credit Union League president/CEO, were responding also tried to argue that credit unions waste taxpayer money.
Michlig reminded readers of NJBIZ.com (Aug. 7) that the exact opposite is true. While banks filter billions of dollars in profit back to stockholders--most of whom live far from the areas the banks serve--credit unions consistently reinvest revenue locally.
“If New Jersey banks were structured like credit unions, the $6.6 billion they paid to stockholders in dividends over the past decade could have instead stayed in the local community, helping people with better loans and savings, and entrepreneurs to start and grow businesses,” Michlig said.