A bill introduced has been introduced in Utah's legislature that would let certain financial institutions become limited liability companies (LLCs), meaning they can avoid certain corporate taxes.
The bill was sponsored by Senate Majority Whip John Valentine (R-Orem) and would initially apply to industrial loan banks and Subchapter S corporations. If passed, the law would immediately affect two banks in the state, one of which is interested in becoming an LLC, the other which is already organized as a Subchapter S corp.
The Utah League of Credit Unions has said it will not oppose the proposed bill even as banks in Utah have been the most aggressive in attacking the credit union tax exemption. Most of the state's largest credit unions have converted to federal charters.
The new bill also calls for the Financial Institutions Task Force, which examined the credit union tax exemption in Utah and field of membership issues, to study whether the LLC structure should be available to a wider group of institutions.
