November 17, 2017

Tax reform recap: CU tax exemption intact in House, Senate bills

Last week, the House and Senate made progress on federal tax reform. The credit union tax exemption remains intact in each of the chamber's respective tax bills.

Here's a rundown of what happened last week:

  • The House Tax Cuts and Jobs Act (H.R. 1) was voted on by the full House Thursday and passed by a vote of 227-205. It now moves to the Senate for consideration.
  • The Senate Finance Committee late Thursday night approved and reported out the Senate Tax Cuts and Jobs Act on a party-line vote after four days of mark-up. It now moves to the full Senate for consideration. Potentially complicating the Senate's passage of the bill is the inclusion of the repeal of the Affordable Care Act's individual mandate. The tax reform bill is being moved through the reconciliation process, which requires only a simple majority to pass; however, a few Republican senators are unlikely to support the bill with the individual mandate repeal included.
  • NAFCU President and CEO Dan Berger sent an email to association members Thursday launching a grassroots effort to push back on recent calls by some in the banking industry to eliminate the credit union tax exemption.
  • After the Senate passes its version of the tax bill (the chamber is expected to consider the bill the week of Nov. 27), a House-Senate conference committee will meet to reconcile legislative differences. Republicans hope to have a tax reform package passed before the end of the year.

NAFCU staff remain on Capitol Hill, engaging with lawmakers in both the House and Senate as this process moves forward. The association is ensuring all members of Congress understand the economic benefits credit unions provide their communities and nation as a whole. An independent tax study released by NAFCU earlier this year shows that the cumulative benefit credit unions provide the greater economy totals $16 billion a year.

Preserving credit unions' tax exemption remains NAFCU's top legislative priority.