EXEMPT GROUPS
Mixed news for state chartered credit unions that sell products to members:
Income from sales of financial services is tax-exempt, a district court says. It rejects IRS’ position that such income is hit with unrelated business income tax. Selling financial products such as mutual funds and annuities to members is related to the group’s exempt purpose.
But income from insurance sales to members may be taxable. The court reserves judgment on whether income from selling credit life and disability insurance and car loan protection coverage to members is taxed as unrelated business income. This does not affect federal credit unions. They do not pay unrelated business tax.
Mixed news for state chartered credit unions that sell products to members:
Income from sales of financial services is tax-exempt, a district court says. It rejects IRS’ position that such income is hit with unrelated business income tax. Selling financial products such as mutual funds and annuities to members is related to the group’s exempt purpose.
But income from insurance sales to members may be taxable. The court reserves judgment on whether income from selling credit life and disability insurance and car loan protection coverage to members is taxed as unrelated business income. This does not affect federal credit unions. They do not pay unrelated business tax.
www.BusinessLately.com
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