In recent months, leading congressional committees have ramped up their discussions and work on tax reform legislation. Leaders on both sides of the aisle have said that they are working to have legislation as early as later this year or in 2014. The House Ways and Means Committee, which is the chief tax writing committee in Congress, organized several working groups to look at the tax code as it pertains to industry including the financial services industry. The working groups were tasked with collecting data on the tax benefits provided by the federal government to those specific industries. Once the data is collected, they would transition to an advocacy stage. The financial services working group is chaired by Nebraska Congressman Adrian Smith (CD 3).
Congressional leaders have said that they are taking a “blank sheet” approach when it comes to tax reform. Simply put, the list of tax exemptions would be wiped clean and organizations or groups that currently enjoy a tax benefit would need to advocate to Congress why they should be put back on the “blank sheet”. This scenario makes it imperative that credit unions make their voice heard by Congress as to why our tax exemption is warranted and how its elimination would hurt our 445,000 credit union members across Nebraska and the 96 million nationwide.
The Senate Finance Committee released its tax options paper on tax exempt organizations and charitable giving. Read it here . 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.” The paper cites a 2012 report produced by the Tax Foundation entitled, “Raising Revenue: The Least Worst Options.”
The report also includes a discussion of options to expand 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, CUNA and the Leagues will also be monitoring proposals that may alter or impact the application of UBIT on credit unions.
The Senate Finance Committee has also requested U.S. Senators to submit their priorities when it comes to tax reform and which tax expenditures should be kept or eliminated. As discussions on tax reform develop, it’s important that credit unions activate their staff, volunteers and members to contact our members of Congress to tell them “Don’t tax my credit union!”. CUNA has developed a toolkit on their website, www.cuna.org, for credit unions to access that provides information, videos, radio spots, internet banner ads, sample newsletter articles and more. CUNA has also developed a public website, www.DontTaxMyCreditUnion.org , the public can go to learn more about credit unions and send a message to their member of Congress.
Urge your credit union staff, volunteers, and members to visit DontTaxMyCreditUnion.org to send a pre-written email to their Member of Congress today, or they can call their representative toll-free at 877-642-4223. The message is simple, “Don’t Tax My Credit Union!”