tax-exempt bond

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Tax-exempt bond

A bond usually issued by municipal, county, or state governments whose interest payments are not subject to federal and, in some cases, state and local income tax.

Tax-Exempt Bond

A bond issued by a local or state government. Municipal bonds are usually used to raise capital for improvements in infrastructure or other aspects of the municipality. For example, a city or school district may issue a tax-exempt bond to build a new school or a new playground. They are called tax-exempt bonds because they are exempt from federal income taxes and sometimes from state and local taxes as well. Tax-exempt bonds usually pay lower coupons than corporate bonds, but because the yield is tax-free, the after-tax basis may be higher for the tax-exempt bond. Risk varies according to the municipality and the particular type of bond.

tax-exempt bond

References in periodicals archive ?
gov/TaxExempt-Bonds) and e-mails notifications to those who subscribe to the Tax Exempt Bond Community Update.
A similar spirit has informed the early efforts of the Internal Revenue Service's Tax Exempt Bond (TEB) Group in its choice of which bonds to audit.
1 million tax exempt bond financing with the Town of Riverhead Industrial Development Agency on Oct.
Charter Municipal Mortgage Acceptance Company and American Tax Exempt Bond Trust jointly announced that the merger of ATEBT with and into a wholly-owned subsidiary of CharterMac, CM Holding Trust, was finalized and certificates were mailed to shareholders on Nov.