Think you hate paying state sales tax on the retail items and services you regularly or occasionally buy?
Well, Connecticut’s state-chartered credit unions abhor it so much that they have finally done something about it.
Tucked into the state budget implementer’s bill enacted at the close of the recent legislative session, is an exemption for state credit unions from paying the 6.35 percent levy on purchases of office supplies, furniture and equipment, and other capital goods, credit union promoters say.
If the governor signs it, the measure would take effect July 1.
Indeed, since 2006, one third, or 17, of Connecticut’s then 46 state-chartered credit unions merged with credit unions that bore, or converted, to federal charters, largely to avoid the tax, said attorney Bruce Adams, the Banking Department’s top lobbyist. Federally chartered credit unions are exempt from state sale taxes.
The new state exemption opens the door for some credit unions to reconvert to state charters, Adams said.
Michael Petroni, spokesman for the Credit Union League of Connecticut, said state chartered nonprofit cooperatives for years have been pushing for the exemption to “level the playing field” with federal credit unions.
The league said sales-tax savings would run about $500,000 a year. Not a huge sum, but for many tiny, member-owned credit unions taxes can mean the difference between a yearly profit or loss.
“This is a significant victory for Connecticut’s credit unions,” new CULC President/CEO Jill Nowacki said in a statement. “Securing this exemption at a time of scrutiny nationwide is a testament to the power of grassroots advocacy.”
— Gregory Seay