Credit unions, which have been fighting off tax attacks for the past year, appear to have dodged the latest bullet.
A gubernatorial commission studying reform of the state's revenue system has apparently heeded the lesson of the Utah tax battles and backed off a proposal to apply the state's Gross Receipts (Sales) Tax on credit union purchases. But the commission, which is scheduled to make its final recommendations next week before sending them to the legislature for its consideration, is still looking at several other ways to collect money from state-chartered credit unions.
Among the tax proposals still in play before the commission are applying the Gross Receipts Tax to credit union Mexico CU League and its non-profit CU Education Foundation, according to Tracy Rock, chief lobbyist for the New Mexico CU League.
The tax proposals, which come after the state's credit unions successfully fought off a legislative bid last spring to apply an excise tax on the largest state charters, are among several being discussed to both reform the state's tax system and make up a decline in revenue caused by a cut in the state income tax this year.
"There's a lot of discussion back and forth as to where they're going to make up the (projected) shortfall," said Rock, of projections of a future shortfall due to this year's tax cut.
Proposals On The Table
Among the proposals still on the table are a new tax on non-profits such as the league and the non-taxable foundation, the only one in the country authorized to collect eschete, or unclaimed credit union deposits. The funds are then used to award college scholarships for students attending schools in New Mexico.
The foundation, which was established in 1994, claims more than $200,000 and awarded 175 $500 scholarships last year.
Whatever the commission recommends would have to be ratified by the state legislature, not a sure thing, said Rock. The legislature is expected to call a special session later this fall to enact some or all of the recommendations of the commission.
Commission members have apparently heeded the lesson of Utah, where state charters have taken flight from a tax threat, depriving the state of millions of dollar in sales taxes and other revenues, according to Rock, who said that proposal appears to be out of consideration. But still under consideration is a proposal to apply the receipts tax to transactions such as the rental of safe deposit boxes or other fees.
Bankers Not Behind Tax
The latest tax threats, unlike the earlier proposal on excise taxes, is not being driven by the bankers, although the banks are lobbying the commission. New Mexico was one of six states to field a proposal to tax the largest credit unions last year, all of which were either defeated or killed before they made it into legislation. The New Mexico bill would have applied the state's 5% excise tax to all state charters over $100 million in assets and operating in multiple counties.