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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

tax-exempt bond

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
The execution utilized publicly-issued tax exempt bonds and 4% tax credit equity, provided by PNC Bank, to fund approximately USD 11 million in repairs, renovations and upgrades to the community.
Financing for the deal was made possible by R4 Capital Funding, which purchased $16,300,000 in Tax Exempt Bonds and $8,058,250 in tax credit equity provided by Alliant Capital through their purchase of the Low-Income Housing Tax Credits and HUD's provision of a Mark-to-Market Project Based Section 8 Contract
The Tax Exempt Bonds Division is part of the Governmental Entities division of the IRS Tax Exempt and Governmental Entities Division.
Ultimately CIGA was given the authority to issue tax exempt bonds over a two-year period to raise up to $1.5 billion to continue to pay the claims of injured workers.
Investment in tax exempt bonds will be much less attractive as after-tax yields on taxable investments increase.
For an individual investor to be indifferent between taxable bonds, AMT bonds, and tax exempt bonds, the expected after-tax returns must be equal.
If, however, a building converted to an 80/20 project or an 80/20 project was developed without tax exempt bonds, the company would have to fill out applications and apply to qualify for these tax credits.
The city is serving up $35 million in tax exempt bonds for three retail projects in Downtown Brooklyn and Far Rockaway, Queens.
David Lombino, a spokesman for the city's economic development corporation, said that the program differs from the tax exempt bonds that the city is typically able to release in that they will be reserved exclusively for commercial real estate projects that cost over $20 million.
According to Brancato, Rockrose has over 800 additional units in the pipeline in the Hudson Yards District that are dependant on reciving tax exempt bonds. "We are hopeful NYS HFA will allocate the approprite amount of bonds for this, project," he added.
The $90 million dollar project will be financed through developer equity and tax exempt bonds issued in accordance with the New York State Housing Finance Agency's 80/20 program.