Leagues Pledge $1 Million To Fight UBIT

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The state leagues have set a funding goal of $1 million to be raised during 2003 to assist in fighting attempts to have credit unions pay the business income tax (UBIT).

According to CUNA, the funding commitment came after a meeting of league presidents at the American Association of Credit Union Leagues (AACUL) meeting in Park City, Utah last week. A presentation on UBIT was led by CUNA CEO Dan Mica and CUNA Mutual CEO Mike Kitchen. CUNA Mutual reported it has already spent more than $1 million on efforts related to the UBIT issue.

CUNA reported that the IRS is known to have active audits of state-chartered credit unions underway in Alabama, Connecticut, and Colorado. The IRS position is that income credit unions derive from services that include insurance, ATM fees and debit/credit interchange income are not core credit union activities and therefore subject to the tax. The National Association of State CU Supervisors (NASCUS) is also involved in the effort.

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