Monday, February 22, 2010

Why Should FCU Officials Be Exempt from Washington D.C. Taxes?

Nearly 5,000 credit union activists are attending CUNA's Government Affairs Conference and the big loser is the city of Washington, D.C.

Why am I saying the District of Columbia is a big loser?

Over the four day event, the city may lose $500,000 or more in tax revenues.

Representatives from Federal credit unions attending this conference are exempt from the city's hotel and occupancy tax, which is currently 14.5 percent. (click to enlarge)

With convention room rates ranging from a low of $246 at the Hampton Inn or Hilton Garden Inn to $326 at the Capitol Hilton, that means each night the city loses between $35.67 and $47.27 in tax revenue per Federal credit union attendee.

Moreover, these officials from federal credit unions are also exempt from the city's sales tax when conducting business with vendors at the conference. (click to enlarge)

It seems very bizarre that federal credit union officals are subsidized by the taxpayers of the District of Columbia to come to Washington to lobby Congress to preserve their preferential tax treatment and to expand their powers, when struggling families visiting our nation's capital are subject to these taxes.

That just doesn't seem to be fair.


  1. As presented, the argument is flawed because it offers no context. What the article implies is that all non-profits and not-for-profits should lose their tax exemptions for conference travel. Why should credit unions be singled out? Why are they less-deserving of this tax break than all the other groups that travel to D.C. for their conventions?

  2. Jeffry:

    State chartered credit unions have to pay these taxes. So, in the credit union world, federal credit unions are the only institution that gets this blanket special treatment.

    Also, ABA is a not for profit; but when I travel on ABA's business, I'm not exempt from these taxes.

  3. So there is a "carveout" just for employees of FCUs travelling to D.C.? Who made that decision?

  4. Jeffry:

    It is not just Washington, D.C. This carveout applies to anywhere in the United States they travel on offical FCU business.

  5. So wait, let me get this straight: Are FCUs the *ONLY* organizations in the country that have this unlimited hotel/travel tax exemption?

  6. Simply read the law stated in the NCUA's Letter of Exemption. The Federal Credit Union Act states that federal credit unions are exempt from most local/state taxes. The United States Supreme Court has ratiifed this law in the City of Anaheim v. California Credit Union League case in the late 1990s. Sorry, gentlemen. If you have a gripe, please take it to your Member of Congress. I think bankers' pleas are being well-headed in this Congress.

  7. That's not really much of a response Anonymous. You've restated what the law says...but added no additional thoughts or reflections about whether FCUs are the only organizations enjoying this benefit, nor why it should be considered justifiable. Translating your comment, "It may not be fair but who cares? If someone legislators made a mistake, that's too bad because it's the law now buddy. Good luck getting that fixed! Besides, credit unions need some Congressional love and gravy because banks get plenty." What kind of reply is that?

  8. I’m not that familiar with the tax treatment of other forms of not for profit organizations. But as anonymous correctly pointed out, the FCU tax exemption is very broad. It is written into the Federal Credit Union Act. The only state and local tax that applies to FCUs is real property and tangible personal propeerty tax.

    I know when I was a college professor, I had to pay this tax even when I was on travel to conferences as part of my job.



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