Although the House and Senate Republican tax reform bills contain huge differences, the two bodies agreed on at least one issue—that credit unions should remain tax exempt.
Senate Republicans released the outlines of their bill on Thursday. That same day, the House Ways and Means Committee approved its bill. Both retain the tax exemption.
Next week, the Senate Finance Committee is scheduled to mark up its bill and the House will consider the GOP plan on the floor.
The two bills have vast differences that eventually will have to be reconciled. However, during the four-day markup at the House Ways and Means Committee, no amendments were offered that would have affected the credit union tax exemption.
A Joint Committee on Taxation analysis of the Senate Republican proposal contains credit union language similar to the panel’s analysis of the House bill.
“The exemption is based on their status as not-for-profit mutual or cooperative organizations (without capital stock) operated for the benefit of their members, who generally must share a common bond,” the language states. “The definition of common bond has been expanded to permit greater use of credit unions. While significant differences between the rules under which credit unions and banks operate have existed in the past, most of those differences have disappeared over time.”
Credit union trade group said they will continue to lobby hard to ensure that the tax-exempt status is continued.
“As both the House and Senate continue their work on tax reform, we’re staying in close contact with lawmakers to ensure the preservation of credit unions’ tax exemption and other interests,” said NAFCU President/CEO B. Dan Berger.
“This is a positive sign that both chambers are well aware of the massive public policy benefits conveyed by our tax status,” said CUNA President/CEO Jim Nussle.
When the House considers its bill next week, it likely will go the floor with a highly restrictive rule governing the type and number of amendments that can be offered. In fact, the House Rules Committee could issue a rule that prohibits any amendments.
That likely means that the bill will emerge from the House with the credit union tax exemption intact.
The Senate has much less restrictive rules, so senators are likely to be able to offer amendments on the floor.
But the bill will go to the Senate floor under budget reconciliation rules, which means it can pass the Senate with 51 votes and it cannot be filibustered.
