New ‘Tax Options’ Paper Is Wake Up Call For CUs

The Senate Finance Committee’s “tax options” paper on exempt organizations and charitable giving, released Thursday, included two options of particular interest to credit unions, noted Credit Union National Association President/CEO Bill Cheney.

The CUNA leader called the options paper “a wake-up call for action by credit unions.”

First, the paper mentions that one option for tax reform could be to “disallow tax-exempt status for certain organizations engaged in business activities, such as credit unions, nonprofit hospitals or certain types of insurance.”  CUNA had expected credit unions to be mentioned in the report and Cheney noted the paper represents confirmation that credit union taxation is an option that some in the U.S. Congress are considering.

The report also includes a discussion of options to expand Unrelated Business Income Tax (UBIT).  While it does not list expanding UBIT to include federally chartered credit unions, the report does include as an option “Revise the UBIT rules for organizations engaged in commercial activity.”

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