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Taxable Municipal Bond |
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Taxable municipal bond Taxed private-purpose bonds issued by the state or local government to finance prohibited projects such as sports stadiums. Taxable Municipal Bond A municipal bond in which a local government entity seeks to raise money for a private company with no obvious public benefit. The municipality issues a taxable municipal bond when it wishes to attract a business and the jobs it would bring to the area, especially when the business may be otherwise unable to obtain financing for the project. While this may benefit the area in the long term, the bond remains taxable unless then municipality can prove that a public benefit derives directly from the bond. Taxable municipal bonds generally are not guaranteed by the revenue of the municipality. See also: Private activity bonds.
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