Robert Morrison stated the following back in the 1800’s, “To do what ought to be done but would not have been done unless I did it.” As I think about the role of community banks on our local economies and our South Dakota rural way of life these words ring as true as ever. Whether we are discussing Basel III, the CFPB or tax exemption issues of Farm Credit Services and Credit Unions we all need to do what ought to be done.
As I start my journey with you here at ICBSD I ask that each of you take the above words to heart. You must be willing to step up and help in the fight. Together we will fight against one size fits all regulation that will be over burdensome to your banks. From our largest member banks to our smallest family owned operations I ask for your help and ask that you get fully engaged.
I want to draw a parallel that was shared with me recently. Many of our state legislators are becoming more and more outraged at the estimated $39 million dollars of uncollected sales tax in our state due to online purchases. In a recent Press Dakotan article State Sen. Rampelberg is quoted as saying, “we think there’s an inherent unfairness when people aren’t paying what is legally owed to the state.” The article goes on to say, on average there is 6 or 7 percent difference in price built into the profit margin when and Internet company does not collect sales tax.” The article closes with the statement, “Collecting sales tax on Internet purchases is not a new tax. It is simply enforcing an across the board collection of a tax that already exists.
The issue is lost revenue for our state. This is a great parallel to Credit Unions and Farm Credit Services. Credit Unions and FCS had $5.3 billion in assets in 2011, and recorded a net profit of $89.4 million in South Dakota alone.
If taxed like community banks they would have generated $36 million of taxes. The state general fund alone lost out on an $5.3 million as these entities didn’t pay the 6% bank franchise tax. Over the last 5 years the total lost revenue because of the lack of a bank franchise tax was $21.7 million.
Ask your legislators the following:
If there was ever a time to remove exemptions, now is the time!
I look forward to working with each of you in the coming months and years. Together we will “do what ought to be done but would not have been done unless we did it”
McCurry, a native of MN and resident of Mitchell, SD, holds a Bachelor of Arts degree in Communications / Marketing from the Minnesota State University, Mankato. Prior to joining the ICBSD as President and CEO, he directed the marketing, sales and government relations efforts at Santel