The prospect of tax reform has been swirling on both federal and state levels, and with the federal tax cut plan in Washington, D.C., released by the House Ways and Means Committee on November 2nd, it is a topic that will continue as Congress works through what details remain in the bill, and what details may change in the legislative process. There have also been attempts by some in the for-profit banking industry to shift the discussion to credit unions – seen in attempts in other states, as well as on a national level. In Georgia, it is something that is monitored closely, and it is something that requires consistent messaging from the credit union industry nationwide on the benefits of being not-for-profit financial cooperatives.
As soon as the federal tax reform package was released, CUNA’s research team began the analysis of the details to ensure that credit unions are not implicated or hindered. As of now, the credit union not-for-profit tax status is not entangled in the bill; however, the full legislation is being reviewed for any other provisions that may impact credit union operations to ensure that tax reform does not create barriers to credit unions in serving their members. To see CUNA’s summary of the points of credit union interest in this first public draft of the tax bill, please click here. Please realize, though, that this is the first draft of the bill, and it is likely to change – so stay tuned; your involvement may be needed as this legislation moves through the process. To illustrate how fluid this process is: The Senate Finance Committee just released their version of the tax reform bill on November 9th. And, while the credit union tax status is untouched as it is in the House bill, this Senate version is being analyzed for any issues for credit unions.
On a state level, GCUA continues to engage in the state hearings on taxation; on October 27th, the state Legislature held another off-session hearing dedicated to examining the tax breaks and incentives in Georgia. The state Senate has been systematically reviewing tax credit/exemption programs with the intent to establish an estimated return on investment with the programs, whether the programs are working, and whether they should (or should not) be continued. This has been slated to be an ongoing project for the Senate over the next several years.
This review has spanned income as well as sales tax incentives/credits and exemptions. GCUA has stayed in close communication with the committee to ensure that credit unions are protected. And while credit unions are not referenced in the analysis, these hearings will need to continue to be monitored closely not only to protect, but to be aware of the direction the committee takes in the process.
