reciprocal immunity

reciprocal immunity

The tax immunity that interest payments on federal securities have against state and local authorities and that interest payments on state and local securities have against federal authorities. Although not specifically stated as such in the U.S. Constitution, reciprocal immunity has been recognized by the U.S. Supreme Court.
References in periodicals archive ?
The principle of reciprocal immunity - the federal government doesn't tax state and local governments, and vice versa - was considered imperative to the original tax code.
If the exemption on municipal bonds were eliminated, it would upend the more than 100-year established precedent of reciprocal immunity.
And the federal government under the doctrine of reciprocal immunity, has not taxed the debt or bonds of cities and towns.
Federal intervention also crosses the line when it comes to reciprocal immunity and separation of powers.
Similarly, under the current doctrine of reciprocal immunity, states and local governments may not impose taxes on the interest earned on federal bonds, or on other properties or sales on federal reservations or properties, any more than the federal government has been able to tax the interest on state and local governments.
And the federal government, under the doctrine of reciprocal immunity, has not taxed the debt or bonds of cities and towns.
The President's and House-passed version of the bill would set a precedent by altering the principle of reciprocal immunity and imposing a federal tax on the essential operations of state and local governments.
The House-passed version also contains provisions which would interfere with the traditional principle of reciprocal immunity by imposing the federal Btu energy tax on essential operations of municipal governments and permanently extend limitations on the deductibility of state and local taxes.
The House-passed version also contains provisions which wouyo interfere with the traditional principle of reciprocal immunity by imposiol the federal BTU energy tax on essential operations of municipal governments and preempt municipal condemnation authority.
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