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26 U.S.C. § 103 — Interest on State and local bonds

submitted 72 years ago by ch. 736 to r/title-26-INTERNAL-REVENUE-CODE · 133 words · no verdicts yet

in plain englishAI-generated · not legal advice

This section says interest earned on most state and local government bonds isn't taxed as income. But it makes exceptions for certain private activity bonds, arbitrage bonds, and bonds that aren't properly registered.

(a) Exclusion. Except as (b) provides, gross income does not include interest earned on a state or local bond. (b) Exceptions. The exclusion in (a) does not apply to: (1) a private activity bond that isn't a "qualified bond" as section 141 defines it; (2) an "arbitrage bond" as section 148 defines it; or (3) any bond that doesn't meet the registration rules in section 149. (c) Definitions. For this section and part IV: (1) "State or local bond" means a debt obligation of a state or a political subdivision of a state. (2) "State" includes the District of Columbia and any U.S. possession.
the actual law source: uscode.house.gov ↗public domain
(a) Exclusion

Except as provided in subsection (b), gross income does not include interest on any State or local bond.

(b) Exceptions

Subsection (a) shall not apply to—

(1) Private activity bond which is not a qualified bond

Any private activity bond which is not a qualified bond (within the meaning of section 141).

(2) Arbitrage bond

Any arbitrage bond (within the meaning of section 148).

(3) Bond not in registered form, etc.

Any bond unless such bond meets the applicable requirements of section 149.

(c) Definitions

For purposes of this section and part IV—

(1) State or local bond

The term “State or local bond” means an obligation of a State or political subdivision thereof.

(2) State

The term “State” includes the District of Columbia and any possession of the United States.

Source credit: (Aug. 16, 1954, ch. 736, 68A Stat. 29; Pub. L. 90–364, title I, § 107(a), June 28, 1968, 82 Stat. 266; Pub. L. 90–634, title IV, § 401(a), Oct. 24, 1968, 82 Stat. 1349; Pub. L. 91–172, title VI, § 601(a), Dec. 30, 1969, 83 Stat. 656; Pub. L. 92–178, title III, § 315(a), (b), Dec. 10, 1971, 85 Stat. 529; Pub. L. 94–164, § 7(a), Dec. 23, 1975, 89 Stat. 976; Pub. L. 94–182, title III, § 301(a), Dec. 31, 1975, 89 Stat. 1056; Pub. L. 94–455, title XIX, §§ 1901(a)(17), (b)(8)(B), 1906(b)(13)(A), title XXI, §§ 2105(a)–(c), 2137(d), Oct. 4, 1976, 90 Stat. 1765, 1766, 1794, 1834, 1902, 1931; Pub. L. 95–339, title II, § 201(a), Aug. 8, 1978, 92 Stat. 467; Pub. L. 95–600, title III, §§ 331(a), (b), 332(a), 333(a), 334(a), (b), title VII, § 703(j)(1), (q)(1), Nov. 6, 1978, 92 Stat. 2839–2841, 2941, 2944; Pub. L. 96–222, title I, § 107(a)(3)(C), Apr. 1, 1980, 94 Stat. 223; Pub. L. 96–223, title II, §§ 241(a), 242(a), 244(a), Apr. 2, 1980, 94 Stat. 281, 283, 286; Pub. L. 96–499, title XI, § 1103, Dec. 5, 1980, 94 Stat. 2669; Pub. L. 97–34, title VIII, §§ 811(a), (b), 812(a), Aug. 13, 1981, 95 Stat. 349, 350; Pub. L. 97–248, title II, §§ 214(a)–(e), 215(a), (b), 217(a)–(d), 219(a), 221(a), (b), (c)(1), title III, § 310(b)(1), (c)(1), (2), Sept. 3, 1982, 96 Stat. 466–469, 472–474, 477, 478, 596, 599; Pub. L. 97–424, title V, § 547(a), Jan. 6, 1983, 96 Stat. 2199; Pub. L. 97–473, title II, § 202(b)(2), Jan. 14, 1983, 96 Stat. 2609; Pub. L. 98–369, div. A, title IV, § 474(r)(4), title VI, §§ 621–624(a), (b)(2), (3), 626(a), 627, 628(a), (c)–(e), (g), 630, July 18, 1984, 98 Stat. 839, 915–922, 924, 926, 928, 931–933; Pub. L. 99–272, title XIII, § 13209(e), Apr. 7, 1986, 100 Stat. 323; Pub. L. 99–514, title XIII, § 1301(a), title XVIII, §§ 1864(a)(1), (b)–(e), 1865(a), 1869(a), (b), 1870, 1871(a)(1), (b), 1899A(2)–(4), Oct. 22, 1986, 100 Stat. 2602, 2885, 2886, 2888, 2890, 2891, 2958; Pub. L. 100–647, title I, § 1013(a)(34)(A), (c)(12)(A), Nov. 10, 1988, 102 Stat. 3544, 3547.)

history & why it existsrecord from the source credit
  • 1954Enacted · Act of Aug. 16, 1954, ch. 736
  • 1968Amended · Pub. L. 90-364 · 82 Stat. 266
  • 1968Amended · Pub. L. 90-634 · 82 Stat. 1349
  • 1969Amended · Pub. L. 91-172 · 83 Stat. 656
  • 1971Amended · Pub. L. 92-178 · 85 Stat. 529
  • 1975Amended · Pub. L. 94-164 · 89 Stat. 976
  • 1975Amended · Pub. L. 94-182 · 89 Stat. 1056
  • 1976Amended · Pub. L. 94-455 · 90 Stat. 1765, 1766, 1794, 1834, 1902, 1931
  • 1978Amended · Pub. L. 95-339 · 92 Stat. 467
  • 1978Amended · Pub. L. 95-600 · 92 Stat. 2839
  • 1980Amended · Pub. L. 96-222 · 94 Stat. 223
  • 1980Amended · Pub. L. 96-223 · 94 Stat. 281, 283, 286
  • 1980Amended · Pub. L. 96-499 · 94 Stat. 2669
  • 1981Amended · Pub. L. 97-34 · 95 Stat. 349, 350
  • 1982Amended · Pub. L. 97-248 · 96 Stat. 466
  • 1983Amended · Pub. L. 97-424 · 96 Stat. 2199
  • 1983Amended · Pub. L. 97-473 · 96 Stat. 2609
  • 1984Amended · Pub. L. 98-369 · 98 Stat. 839, 915
  • 1986Amended · Pub. L. 99-272 · 100 Stat. 323
  • 1986Amended · Pub. L. 99-514 · 100 Stat. 2602, 2885, 2886, 2888, 2890, 2891, 2958
  • 1988Amended · Pub. L. 100-647 · 102 Stat. 3544, 3547

A history note hasn’t been published yet. The record shows enactment by ch. 736 on 1954-08-16.

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