Texas House Preserves CU TaxExemption
AUSTIN, Texas - (03/16/05) -- After a week of debate, the Housepassed a bill overhauling the state's business tax system Tuesday,while maintaining the tax exemption for the state's credit unions.Buddy Gill, lobbyist for the Texas CU League, said the bill willnow be debated in the Senate, where members have expressedintentions to amend the measure, but he is confident the creditunion exemption will survive. "The bill is not likely to remain inits current form; the Senate has said all along it will dosomething very different, but they have indicated they will protectour franchise tax exemption," Gill told The Credit Union Journal.He attributed the House's vote to retain the exemption to anoutpouring of credit union correspondence via email, letters andtelephone calls to lawmakers during the week-long debate on thebill. The bill passed by the House will allow businesses to choosebetween paying the franchise tax or a tax on payrolls. An economicimpact study conducted by the Texas league suggested that if theproposed 1.15% tax on payrolls is applied to the 230 statechartered credit unions in Texas it could cost them as much as $3.5million a year.