CUs Convert To Federal Charter To Avoid Tax
The tax threat is somewhat latent in Utah. Last year we had a major battle that resulted in a two-year task force that did little in its first year. This was partly because the credit unions targeted by the legislation switched to federal charters.
Currently, Utah CUs and are not being looked to for funding, although last year bankers called for the taxation of credit unions to help with public education funding. However, taxing Utah credit unions to fund education would result in such a small amount of money actually going into classrooms that it wouldn't make a dent in the need. In addition, the fact remains that despite any kind of budget shortfalls, the benefits that the state's communities derive from the credit union cooperative structure and tax exemption far outweigh the meager benefits of taxing them.