Preserved CU tax status in passed tax reform bill upholds power of advocacy
Thursday, December 21, 2017
On Wednesday morning, the House and Senate passed tax reform legislation that leaves the credit union tax status unaffected. This outcome exemplifies the long-standing advocacy efforts in the Carolinas and nationwide to ensure lawmakers ongoing commitment to preserve the credit union tax status.
Credit: Matt McClain, Washington Post
“The mission to protect the credit union tax exemption has always been a top priority for us, said John Radebaugh, Carolinas Credit Union League president and CEO. “Only this year, there was more urgency surrounding Congress’ plans to overhaul the tax code.”
Under the preserved tax exemption, credit unions don’t have to pay federal income tax. They do, however, continue to pay property, employment and other taxes.
Still, this doesn’t stop banks and other opposition from trying to rollback this exemption.
In a response letter to an anti-CU op-ed in the Charlotte Observer on October 24, Radebaugh honed in on the value of the tax status exemption: “The true value of potential taxation revenue is in its impact on the people those taxes are to serve. For every dollar the federal government could collect from credit unions, the not-for-profits provide nearly six times that in financial benefits to members.”
Radebaugh’s letter was reinforced the very next day as credit union advocates in the Carolinas took to Washington, DC for Hike the Hill October 25-27, where they met with lawmakers to focus on four important issues, including the tax-exempt status.
Reflecting on his experience at Hike the Hill for the Wall Street Journal, Truliant Federal Credit Union’s Joe Clark noted how these visits serve as “one brick in a fortress that credit unions have been building for decades around their tax-exempt status.”
He couldn’t be more correct.
“The continued engagement by credit unions and their members over the years has made all the difference in this tax reform process,” added Radebaugh. “Every time credit unions reached out to Congressional leaders, visited them on Capitol Hill or welcomed them to visit a credit union branch, they laid the groundwork for a positive relationship with their legislators.”
Although the impact of the overall tax reform bill won’t unfold for months to come, the Credit Union National Association shared on Monday its analysis of the bill as it relates to credit union business. View that analysis here.