Tax-exempt (Noun)
Meaning
A security that is not subject to taxation.
Classification
Nouns denoting possession and transfer of possession.
Examples
- Holders of a municipal bond typically enjoy a tax-exempt investment, which means their interest income will not be subject to federal taxation.
- Tax-exempt securities are highly sought after by investors looking to maximize their returns while minimizing their tax liability.
- The new tax-exempt annuity offered by the insurance company quickly attracted the attention of retirees and others seeking predictable income.
- In the United States, government-issued securities such as Treasury bills are typically considered tax-exempt at the state and local level.
- State and local governments often issue tax-exempt bonds to finance large infrastructure projects, such as the construction of new schools or hospitals.