A bond issued by a non-state territory of the United States, such as Puerto Rico or Guam. Territory bonds are exempt from all federal, state, and local taxes. This gives a territory bond preferential treatment to a state or municipal bond, which is generally only exempt from state and local taxes in the state and locality in which it is issued.
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A bond issued by a U.S. territory such as Guam, Puerto Rico, and the Virgin Islands. Interest from territory bonds is generally exempt from taxation by federal, state, and local authorities anywhere in the U.S.
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.