Federal credit unions are organized and operate under the provisions of
the Federal Credit Union Act. The federal statute governing federal credit
unions requires that the word 'Federal' appear in the name of the credit
union immediately preceding the words 'Credit Union.' The Federal Credit
Union Act states that these entities will be exempt from all taxes imposed
by the United States or by any state, and they are recognized as instrumentalities
of the United States which are neither wholly nor partially owned by the
United States. The credit unions are exempt from federal income taxes under
Section 501(a) of the IRS code, however, they are not exempt from federal
unemployment taxes unless they are granted a specific exemption. Section
3308 of the Federal Unemployment Tax Act provides that, notwithstanding
any other provisions of the law which grants exemption from taxation to
any instrumentality of the United States, the instrumentality shall not
be exempt from Federal unemployment taxes unless the other provision of
law grants a specific exemption by referring to Section 3301 of the Federal
Unemployment Tax Act. The law which granted exemption to Federal Credit
Unions did not specify exemption from Section 3301 of the Federal Unemployment
Tax Act. Therefore, service for a Federal Credit Union is not excluded in
the definition of 'employment.'
Telephone cooperatives organized and operating under the Telephone Cooperative
Act (Article 1528 (c), V.C.S.) are exempt from the payment of 'all other
excise taxes.' Courts have held that the tax levied by the Texas Unemployment
Compensation Act is an excise tax and therefore the Telephone Cooperative
Act exempts these telephone cooperatives from payment of state unemployment
taxes. While there is no specific exemption for telephone cooperatives in
the Texas Unemployment Compensation Act, the Commission honors the provisions
of the other State statute.
The Commission will accept taxes from telephone cooperatives if
they wish to waive their exemption and voluntarily elect coverage under the
Texas Unemployment Compensation Act.
COMMENT: The labor agent is the employer, regardless of who has direction
and control. However, if the labor agent does not pay the tax due, the farmer
is liable for payment of the tax due on the wages paid by the labor agent
while contracting with the farmer. If the labor agent pays the tax due,
the labor agent must present evidence of the payment to the farmer.
Section 204.007 states:
An employer identified by the commission as classified in U.S. NAICS manual
as Number 115111, cotton ginning or Number 115114, postharvest crop activities
* will receive a contribution rate of the lowest of:
* Postharvest crop activities include, crop cleaning, sun drying, shelling,
fumigating, curing, sorting, grading, packing (packing sheds) and cooling.
Reference NAICS 1997, Code 115114.
