NEW YORK – Hudson Valley FCU has filed a suit in state court challenging the state’s mortgage tax, arguing that federally chartered credit unions should be exempt from the levy.
The credit union claims that federally chartered credit unions, which are defined as instrumentalities of the federal government under the Federal CU Act, should be exempt from all federal and state taxes.
The tax varies from county to county, but is $1.30 per $1,000 of a new mortgage when the deed is recorded, and is as high as $2 per $1,000 in New York City, Manhattan County. An exemption from the four-decade-old tax could save credit unions millions of dollars a year.
The suit has extra teeth because it is also joined by the Department of Justice, as well as NAFCU and CUNA.
Federal charters just recorded a victory on the state’s new commuter tax, with the state tax agency finding federally chartered credit union exempt from that levy.
