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Muni Bond Tax Exemptions Upheld by U.S. Supreme Court
05-19-2008, 08:41 AM
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#1
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Administrator
Join Date: Jan 2008
Location: Land of Florida Man
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Muni Bond Tax Exemptions Upheld by U.S. Supreme Court
Good news for muni investors
 Quote:
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May 19 (Bloomberg) -- The U.S. Supreme Court ruled that dozens of states can continue to offer special tax breaks on securities issued within their borders, deciding not to disrupt the $2.6 trillion municipal bond market.
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Bloomberg.com: Worldwide
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05-19-2008, 08:52 AM
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#2
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Thinks s/he gets paid by the post
Join Date: Apr 2008
Posts: 1,482
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Definitely good news for DW and me, as we had planned to invest a sizable chuck of our taxable account into CA tax-exempt bond funds.
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05-19-2008, 09:21 AM
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#3
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Thinks s/he gets paid by the post
Join Date: Nov 2005
Posts: 1,407
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Thanks for the update. I heard that this issue was being pursued in the courts. 
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05-19-2008, 09:24 AM
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#4
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Give me a museum and I'll fill it. (Picasso)
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Ummm, you think this is good news? The alternative would have been that anyone in any state could buy a muni issued anywhere (even out of state) and still avoid being taxed by their home state on the interest. I'd love to be able to buy national muni funds rather than just NJ and escape NJ state taxes.
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Ezekiel 23:20
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05-19-2008, 09:48 AM
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#5
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Dryer sheet aficionado
Join Date: Feb 2008
Posts: 36
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Quote:
Originally Posted by brewer12345
Ummm, you think this is good news? The alternative would have been that anyone in any state could buy a muni issued anywhere (even out of state) and still avoid being taxed by their home state on the interest. I'd love to be able to buy national muni funds rather than just NJ and escape NJ state taxes.
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So this is good for NJ (using your example). If NJ is where you live, that good should benefit you as NJ wouldn't have to pay higher interest to attract buyers who would have fled their tax exempt bonds. That means NJ wouldn't have to tax you in some other way to compensate for their increased borrowing costs.
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05-19-2008, 09:57 AM
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#6
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Give me a museum and I'll fill it. (Picasso)
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Quote:
Originally Posted by nepo
So this is good for NJ (using your example). If NJ is where you live, that good should benefit you as NJ wouldn't have to pay higher interest to attract buyers who would have fled their tax exempt bonds. That means NJ wouldn't have to tax you in some other way to compensate for their increased borrowing costs.
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NJ isn't me. More interested in what benefits me than the state I live in. Callow, I know.
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"All animals are equal, but some animals are more equal than others."
- George Orwell
Ezekiel 23:20
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05-19-2008, 10:14 AM
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#7
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Administrator
Join Date: Jan 2008
Location: Land of Florida Man
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Quote:
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Ummm, you think this is good news?
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Yes
Quote:
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The alternative would have been that anyone in any state could buy a muni issued anywhere (even out of state) and still avoid being taxed by their home state on the interest. I'd love to be able to buy national muni funds rather than just NJ and escape NJ state taxes.
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So a major disruption in the states muni bond market would be fine as long as you benefited? Wouldn't the value of most state's bonds decline if they lose the additional tax benefit? That would represent a tremendous economic loss in the US.
Michael
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05-19-2008, 10:26 AM
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#8
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Give me a museum and I'll fill it. (Picasso)
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Quote:
Originally Posted by MichaelB
So a major disruption in the states muni bond market would be fine as long as you benefited? Wouldn't the value of most state's bonds decline if they lose the additional tax benefit? That would represent a tremendous economic loss in the US.
Michael
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Have you been under a rock for the last 12 months?
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"All animals are equal, but some animals are more equal than others."
- George Orwell
Ezekiel 23:20
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05-19-2008, 10:33 AM
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#9
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Administrator
Join Date: Jan 2008
Location: Land of Florida Man
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Quote:
Originally Posted by brewer12345
Have you been under a rock for the last 12 months?
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No, in Florida. Similar, but not quite the same.
I thought the disruption in the muni markets was nationwide and not state specific - more the result of credit concerns and not taxation.
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05-19-2008, 10:40 AM
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#10
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Give me a museum and I'll fill it. (Picasso)
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Quote:
Originally Posted by MichaelB
I thought the disruption in the muni markets was nationwide and not state specific - more the result of credit concerns and not taxation.
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If the tax landscape changed, the market for all states' muni obligations would go through a transition. But it probably would be less painful than what happened in the last year.
__________________
"All animals are equal, but some animals are more equal than others."
- George Orwell
Ezekiel 23:20
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05-19-2008, 08:44 PM
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#11
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Full time employment: Posting here.
Join Date: Jul 2004
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Quote:
Originally Posted by brewer12345
The alternative would have been that anyone in any state could buy a muni issued anywhere (even out of state) and still avoid being taxed by their home state on the interest.
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Actually another legally acceptable alternative would be that a state could choose to tax all munis (including their own).
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05-20-2008, 06:12 AM
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#12
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Thinks s/he gets paid by the post
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,437
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Quote:
Originally Posted by gindie
Actually another legally acceptable alternative would be that a state could choose to tax all munis (including their own).
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No, thank you.
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