Nebraska CUs Already Living With Taxation
The tax issue in Nebraska is some what muted by the fact that the Cornhusker State is one of only six that impose an income and/or franchise tax on its state-chartered credit unions. As a result, the bankers continue to complain about the federal tax treatment of credit unions; however, they have not yet ventured into the realm of state taxes.
We continue to underscore for lawmakers the irony of contradiction in the bank arguments. Since the passage of the Small Business Job Protection Act in 1996, 73 Nebraska banks have elected to operate under the Subchapter S corporate structure and as a result have forgone an estimated $21.4 million in federal taxes. By comparison, the estimated forgone federal income tax of Nebraska's 81 credit unions is estimated at $5.2 million.