COLUMBUS, Ohio (6/28/13)--Ohio credit unions would pay 0.25% more for certain goods and services under the latest version of the state's proposed compromise tax plan, but they are in a better position than they were under Gov. John Kasich's original tax proposal, the Ohio Credit Union League said.
"The league has been influential in working to ensure credit union's best interests are protected" in the state budget negotiations, Patrick Harris, the league's director of media and public relations, told News Now Thursday. "The version in conference committee, the latest version, would have an impact on credit unions, but very minimal compared to what the original version would have done."
The commercial activity tax would be changed to an incremental scale based on gross receipts under the latest plan (eLumination Newsletter June 26). The sales tax would increase to 5.75% from 5.5% for credit unions on goods and services subject to the tax. However, to the benefit of credit unions, the latest proposal does not expand the sales tax base. All currently exempt services would not be taxed.
The latest plan is composed of parts of the original budget proposal and the House and Senate versions.
Under the original tax expansion proposed by Kasich, all credit unions that provide or charge fees for services would have been required to collect and remit sales taxes for some services they provide to members (News Now April 12). These included "bank service fees," debt counseling, investment services, and sale of amusement park tickets and entertainment books. Credit unions would also have been considered "vendors" and would have been required to obtain a vendor's license, plus collect and remit sales taxes to the state for these services. These are not part of the current budget proposal.
Additional changes are possible while the conference committee continues to negotiate, said Harris. The state budget must be finalized by Sunday.