July 27, 2017

NAFCU vigilant on CU exemption as tax writers seek reform

NAFCU promised to be vigilant in defense of the credit union tax exemption yesterday as Treasury Secretary Steven Mnuchin, White House advisors, House and Senate majority leaders and the chairmen of the House Ways and Means and Senate Finance Committees released a joint statement reiterating Republicans' goal to advance tax reform this fall.

The statement calls for the committees to draft and vote out legislation this fall and move it to the House and Senate floors for action. "As the committees work toward this end, our hope is that our friends on the other side of the aisle will participate in this effort," it says.

The statement offers broad themes for reform – lower tax rates, more fairness, encouraging U.S. jobs – but does not address how such a package would affect current deductions, credits and exemptions, such as credit unions' federally tax-exempt status.

NAFCU continues to meet with lawmakers and policy makers and to share the findings of a tax study it released earlier this year showing the value of the credit union tax exemption to consumers and the broader economy. Preservation of credit unions' tax exemption, NAFCU's top legislative priority, will also be a key focus for credit union representatives visiting lawmakers this September during NAFCU's Congressional Caucus in Washington.

"While there have been no proposals to change the tax status of credit unions, we will be vigilant in defending the credit union tax exemption throughout this process," said NAFCU Vice President of Legislative Affairs Brad Thaler.

Thursday's statement says this reform effort will not address a border tax but should focus on achieving "the goals shared broadly within Congress, the Administration, and by citizens who have been burdened for too long by an outdated tax system." It adds that the president " fully supports these principles and is committed to this approach."

Last week, Sen. Dean Heller, R-Nev., reaffirmed during a Senate Finance hearing the Republicans' plan to release tax-reform legislation around Sept. 1 so hearings and discussions can begin.