TOPEKA, Kan.–Legislation that would have placed an income tax on state-chartered credit unions has died for now.
A separate bill that would have reduced the privilege tax on banks has also been tabled. Both bills may be reconsidered when the legislature reconvenes in January.
As CUToday.info reported here, the Committee on Financial Institutions and Insurance is studying whether to fix “what some call a growing disparity between local banks and credit unions.”
The state’s banks had been arguing they can’t compete with tax-exempt credit unions, with the news outlet stating tax equality “will create jobs and allow banks to give more back to their communities.”
The attack on state-chartered CUs in Kansas is part of what the CU trade associations have been warning is a broader effort by banks to find victories at the state level after not succeeding in Congress. The goal, as was discussed during the California and Nevada CU leagues’ REACH Conference earlier this week, is to drive state charters to federal charters and then renew attacks on the federal tax exemption, according to several people.
2 Senate Bills
The committee had been considering two Senate bills, one that would reduce the privilege tax on banks, while the other would require credit unions of more than $100 million in assets to also pay the tax.