WASHINGTON–There are no changes to the credit union tax exemption in the first draft of a Senate tax reform bill that was released on Thursday. The Senate action comes just a day after the final version of the tax reform bill was released by the House Ways and Means Committee in which the CU tax status also remains unchanged.
While both the American Bankers Association and the Independent Community Bankers of America called on Congress to remove the credit union tax exemption, its status was never really threatened in the debate around the Tax Cuts and Jobs Act (HR 1) in the House. It is expected the two groups will continue to lobby the Senate for one of its favorite annual issues. CUNA said the Senate Finance Committee is now expected to mark up the bill over the next week, and it could head to the Senate floor the week of Thanksgiving.
In response to the Senate bill, NAFCU CEO Dan Berger said, "NAFCU and our members thank Chairman [Orrin] Hatch and Senate Republican leaders for recognizing that altering the tax status of credit unions would have a devastating impact not only on credit union members across the country, but also on consumers and small businesses," said NAFCU President and CEO Dan Berger. "As both the House and Senate continue their work on tax reform, we’re staying in close contact with lawmakers to ensure the preservation of credit unions' tax exemption and other interests."
NAFCU added continues to advocate five tenets for ensuring a positive environment for credit unions, and one of these is a fair playing field, and that it will review this tax bill and will be engaging Congress on any potential impact this legislation would have on credit unions – not only with respect to the tax exemption, but other tax code provisions as well.
Following the release of the final version of the Tax Cuts and Jobs Act (H.R. 1) in the House, CUNA CEO Jim Nussle issued a statement that "“Advancing this bill for House consideration is the next step in the tax reform process, and CUNA will engage with policymakers in both Houses of Congress as the process continues,” said CUNA President/CEO Jim Nussle in a statement. “CUNA remains committed to tax reforms that build and support a strong middle class, and will continue our advocacy.”
CUNA noted it published its analysis of HR 1 earlier this week, examining the bill’s effect on Unrelated Business Income Tax, executive compensation, retirement savings rules, mortgage interest, property tax deductions and business loan interest deductibility, among others.
HR 1 is expected to see House consideration next week.