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State and local governments also typically exempt interest on bonds issued by taxpayers’ state of residence. However, the US Supreme Court in Department of Revenue of Ky. v. Davis upheld states’ ability to tax interest on bonds issued by other jurisdictions. Outstanding state and local debt obligations totaled $ trillion as of Decem The majority of tax-exempt municipal securities are owned by individuals, mutual and money market funds, commercial banks, and property and casualty insurance companies. In an advance refunding, the refunded bonds are redeemed more than 90 days from the date the refunding bonds are issued. Changes to federal tax law in late eliminated the ability of governments to issue tax-exempt advance refunding bonds. Taxable advance refundings of tax-exempt or taxable bonds are still permitted. Issuers of taxable or. Introduction This memorandum provides a brief explanation and overview of tax-exempt financing for governmental purposes under Georgia law and the Internal Revenue Code of A summary is presented of the state law procedures and requirements for issuance of bonds and other forms of financing by local governments and public authorities.
certain use of tax-exempt bond financed facilities, such as (a) unrelated trade or business use or (b) certain use by for-profit entities (e.g., pursuant to management agreements and leases), can result in nonqualified use that could adversely affect the tax-exempt status of bonds – consult bond counsel for analysis as well as information regarding federal tax code safe-harbors and. (Replaces the policy - Industrial Development Bonds and the policy - Tax-Exempt, Small-Issue, Conduit Industrial Revenue Bonds) Tax-exempt bonds are the primary source of funds for the traditional capital needs of state and local governments. The tax-exemption provides significant cost savings to state and local governments. Tax-exempt status confers exemption from federal tax on earnings from income-producing assets and activities (other than those that generate unrelated business income). States generally follow the federal precedent for their income taxes and often exempt charities from . Municipal bonds are very tax-efficient because the interest income isn't taxable at the federal level—and it's often tax-exempt at the state and local level, too (munis are sometimes called Author: Jeff Stimpson.
# Calling to Resolve the Conflict between State and Federal Marijuana Laws # Enabling Adoption of Pension Benefit Alternatives that Reduce Costs to Public Sector Employees The primary advantage of municipal bonds for the investor is that the interest is exempt from federal taxes, and are also usually exempt from state and local taxes, if the bond was issued by a municipality within the taxpayer's state and municipality — triple tax exemptions, where US Treasuries are exempt from state and local taxes and municipal bonds are exempt from federal. The December bill eliminated state and local governments’ ability to use tax-exempt bonds to advance refund outstanding bonds, as of Jan. 1. Tax-exempt advance refundings offered an important tool for state and local governments to reduce debt service costs, freeing up resources to be used for other important purposes, and minimizing. Taxes on Tax-Exempt Bonds. in lowering the cost of funding for state and local governments with BAB issuers obtaining finance 54 basis points lower, on average, compared to issuing regular.