Four States Apply Some Type of Tax On State Charters

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With the repeal of California's franchsie tax on credit unions two years ago there are only four other states that apply a tax on credit unions, other than sales taxes. In Iowa, state-chartered credit unions pay a "Monies and Credit Tax" that amounts to 0.5% of legal and special reserves. Oklahoma assesses a 6% "In Lieu Tax" on the income of state charters, similar to the corporate income tax paid by banks. Indiana credit unions pay the state's "Financial Institutions Tax," which is 8.5% of net transfers to undivided earnings. And state charters in Rhode Island pay the same "Deposit Tax" paid by banks, which amounts to 6.25 cents per $100 of the average daily deposits for credit unions under $150 million in assets, and 6.95 cents per $100 for those over $150 million in deposits.

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