Congressional Committee Estimates CU Tax Exemption to Cost $10.3 Billion Over Five Years

The credit union tax exemption is estimated to cost $10.3 billion between 2019 and 2023, the congressional Joint Committee on Taxation said last week in its latest estimate of tax expenditures.

Unlike other estimates, such as those done by the Treasury Department, the joint taxation committee estimates the cost of such exemptions over five years. The committee releases estimates of all tax exemptions each year.

The Treasury Department estimates tax exemptions over 10 years. The Treasury Department earlier this year estimated the cost of the tax exemption at $21.878 billion between 2020 and 2029.

The joint tax committee gave several technical reasons why its estimates might differ from the Treasury Department, including the use of different methodologies for assessing tax exemptions.

Last year, the committee estimated the tax exemption at $9.9 billion between 2018 and 2022.

The General Accounting Office has recommended that the Treasury Department evaluate all tax expenditures to determine how useful they are, but the Trump Administration has declined to do so.

The tax exemption continues to be a flashpoint between banks and credit unions. Banking trade groups have argued the tax exemption gives credit unions an unfair advantage.

The fight escalated again this year, as the Independent Community Bankers of America began a high profile “Wake Up” campaign to press policymakers on the issue.

And the battle may continue on the state level early next year, when state legislatures begin their sessions.