Bankers Press Tax Challenge in Pennsylvania Supreme Court

HARRISBURG, Pa. – Attorneys for the state Banking Department and the Department of Revenue told the state’s High Court the bankers ought to end their legal challenge to the credit unions’ tax exemption and pursue their efforts to get credit unions taxed before the state legislature, instead. “If changes should be made (in the tax exemption) then change should be made by the General Assembly,” Linda Carroll, counsel for the Department of Banking, asserted during yesterday’s argument before the state Supreme Court. Raymond Pepe, an attorney for the Pennsylvania Bankers Association, asked the court to overturn a Commonwealth Court ruling and order the lower court to hear its argument that the 1968 amendment to the state’s constitution did not allow the legislature to approve the credit union tax exemption. Both parties agreed that the bankers main argument, which is still before the lower court, is that the credit union exemption violates the state’s uniformity clause in the constitution, because it discriminates in favor of one group of competitors. The High Court is expected to eventually review that portion of the case, too. The tax case is an outgrowth of the bankers challenge of two broad community charters granted to Freedom CU and TruMark CU, encompassing more than five million people surrounding Philadelphia.