Joint Tax Committee says Banks and CUs aren’t all that Different Anymore

November 8, 2017 at 9:08 am Leave a comment

I learned something new this morning as I skimmed a report by the Joint Committee on Taxation detailing the provisions of HR 1, the House Republican tax legislation.  According to the Committee, “While significant differences between the rules under which credit unions and banks operate have existed in the past, most of those differences have disappeared over time.” (Page 150) Say What?

Is it possible that the Committee staffers never heard of SEG group requirements? Or don’t know about the MBL cap or Restrictions on community expansions? Is it possible that the committee doesn’t think that the inability to  issue stock is a big deal? I doubt it or though it would explain why our tax code is such a mess.

What banking lobbyist got this gratuitous fallacy tucked away in what is supposed to be an objective analysis of a tax bill which doesn’t impact the CU tax exemption?

On the one hand I’ll be happy if this is the worst thing that comes out of the tax debate; besides, its a waste of time to respond to every claim hurled at the enemies of the industry. But when I find these charges imbedded in an important analysis, presumably one that will be used by bleary-eyed legislators and staff  scrambling for additional revenue in the coming weeks,  it is worth responding to

I was reading the   report to get a sense of how the proposed UBIT amendments could impact state charters. FCUs are categorically exempt from the UBIT tax.  According to the analysis,   Sec. 5001 of the legislation  would  define unrelated business taxable income to include any expenses paid or incurred by a tax exempt organization for qualified transportation fringe benefits, a parking facility used in connection with qualified parking or any onsite  athletic facility.

As longtime readers of this blog know,  it’s not a coincidence my father is the accountant in the Meier family and not me. Please take a look if you think this could impact your CU.

Entry filed under: Advocacy, General, Political. Tags: , .

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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