Tax Anticipation Notes

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Tax Anticipation Notes (Tans)

Notes issued by states or municipalities to finance current operations in anticipation of future tax receipts.

Tax Anticipation Note

A municipal bond, usually with a maturity of less than one year, issued on the assumption that the debt will be paid back on future tax revenue. Municipalities issue tax anticipation notes to provide cash for immediate or time sensitive needs. For example, a city may issue a bond to pay for school construction rather than wait for tax revenues to pay for it because either the school is desperately needed or construction can only occur in certain times of the year when the city is cash poor. At maturity, tax anticipation notes are paid with tax revenues in the months following the issue.
References in periodicals archive ?
Tax anticipation notes are sometimes used by cities and other local governments to borrow cash that they later pay back with tax revenue, although both the Eugene and Bethel districts say they have never used the debt instrument before.
35 million in tax anticipation notes since July 1 to pay fiscal 2007 bills.
Preparation and issuance of Bond Anticipations, Special Emergency and Tax Anticipation Notes.
Issuances may include, but are not limited to, new and refunding (i) Certificates of Participation (COPs), (ii) Obligation Bonds (GOBs), and Sales Tax Revenue Bonds, Revenue Anticipation Bonds (RANs), Tax Anticipation Notes (TANs), Bond Anticipation Bonds (BANs); any other lease purchase or any other financing vehicle determined to be in SBBC s best interest.