New Tax Fight Emerges InMaine
AUGUSTA, Me. - (01/17/05) -- A new tax challenge has emerged froman unlikely source here, a state representative and active creditunion member who has drafted a bill that would enact an annualfranchise (income) tax on Maine's 12 state chartered credit unions.The aim of the bill, to be introduced by State Rep. William Smith,is apparently to help close the state's bulging revenue shortfall,and not to penalize credit unions on behalf to the banks, who wouldalso be hit by an increase in their existing franchise taxes undera separate proposal by Smith, a long-time member of Northeast FCU.The credit union lobby hopes to convince Smith to pull the measurebefore it is formally introduced, lest it unleash a broad debateover credit union taxation, according to Jon Paradise, spokesmanfor the Maine CU League. "We don't even want the dialogue tooccur," he told The Credit Union Journal on Friday. The creditunion lobby hopes to convince Smith the $140,00 or so in revenuethe bill might raise would not go very far to closing the projected$300 million shortfall in state coffers for 2005, and could drivesome state credit unions to the tax-exempt shield of a federalcharter. Rep. Smith did not return phone calls from The CreditUnion Journal last week. Maine credit unions last faced a taxthreat in 1993, which they successfully defeated.