Tax strategies

As lawmakers look for ways to plug budget gaps, credit union groups are preparing for a possible assault on the industry's tax exemption at the state and federal level.

The National Taxpayers Union called on Congress to reevaluate the movement's tax structure, including citing the trend of CUs buying banks as a "textbook example of poor tax policy."

Federal legislation introduced this week by Rep. Gregory Meeks, D-N.Y., would ensure that taxi drivers don't get taxed on medallion debt that gets forgiven. The bill dovetails with a debt forgiveness plan under development in New York, where hundreds of drivers have filed for bankruptcy.

A special committee in the state Senate has recommended not to move forward on a proposed bill to tax credit unions above a certain asset threshold.

A study commissioned by the Florida Bankers Association found that 70% of participants supported Congress requiring CUs with at least $500 million in assets to pay income taxes.

One bill would tax credit unions in the Sunflower State with at least $100 million in assets.

As credit unions buy up community banks, policymakers should take another look at ending the industry’s tax exemption and regulatory breaks.

A federal court this week will hear arguments in NCUA's appeal of a a judge's split decision on its 2016 field of membership rule while the new NCUA board meets later in the week.

The fight over the credit union industry's tax-exempt status has moved from the federal to state level. It will take the entire movement working together to combat these challenges.

Along with amendments to the Bank Secrecy Act, the Taxpayers First Act could help credit unions maintain their tax-exempt status.