Exempt Facility Bonds | California Infrastructure and Economic Development Bank (IBank) (2024)

FAQs

What is an exempt facility bond? ›

Tax-exempt financing for projects that are government-owned or consist of private improvements within publicly-owned facilities. Bond proceeds are used for defined qualified purposes by a non-governmental entity (the “conduit borrower”).

Private activity bonds are municipal bonds that are issued to raise money for a private project (as opposed to a project for the good of the public). These bonds are exempt from federal taxes under the regular income tax system, but subject to tax under the alternative minimum tax system.

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Bonds issued by California public agencies are also exempt from State of California personal income taxes regardless of the federal income tax treatment.

Both general obligation bonds and revenue bonds are tax-exempt and low-risk, with issuers very likely to pay back their debts.

The main difference between a taxable municipal bond and a tax-exempt muni is that taxable munis pay interest income that's subject to federal and state income taxes, whereas tax-exempt munis pay interest income that's generally exempt from federal and state income taxes.

Tax-Exempt Bond Financing for Nonprofit Organizations and Industries. State-chartered bond authorities exist in every state. They include healthcare facility authorities, housing finance agencies, higher education facility authorities, and industrial development finance authorities.

You can skip paying taxes on interest earned with Series EE and Series I savings bonds if you're using the money to pay for qualified higher education costs. That includes expenses you pay for yourself, your spouse or a qualified dependent. Only certain qualified higher education costs are covered, including: Tuition.

Governments issuing $10 million or less in bonds per calendar year can designate those bonds as bank-qualified, which allows them to by-pass the traditional underwriting system and sell their tax-exempt bonds directly to local banks.

With the new name of Banktivity replacing iBank, the products will retain their current version numbers to help keep things simple for current users.

What bank is iBank? ›

International Exchange Bank, more commonly known as iBank, was one of the largest banks in the Philippines, ranking within the top twenty in terms of assets.

Banktivity (formerly known as iBank) is a personal finance management suite designed for macOS and iOS platforms by IGG Software and debuted in 2003 as a Mac desktop software.

Bonds used to fund local and state government projects like buildings and highways are afforded tax-exempt status at the federal level. Plus, people who purchase bonds issued by their states or localities may not be required to pay state or local taxes on the interest.

Overview. Objective: The California Tax-Exempt Bond ETF seeks to track the performance of a benchmark index that measures the investment-grade segment of the California municipal bond market. The fund is intended for California residents only.

Municipal bonds ETFs are generally free from federal and state taxes if they hold only tax-exempt bonds. However, if the municipal bond ETF has a combination of tax-free and taxable interest, taxes may be due on the federal and state level.

"Exempt Facilities" are privately owned projects that are financed with tax-exempt “private activity” bonds using state and local government entities as the conduit issuers of such bonds. Exempt facilities include (but are not limited to): Solid waste disposal facilities. Sewage facilities. Water furnishing facilities.

Because the bonds are secured by a specific tax and NOT by the general taxing power of the issuer, the bonds are NOT general obligation bonds. revenues received from a specific source. Generally, the source of revenues is the facility financed with the proceeds of the bonds.

Treasury securities are issued in a wide range of maturities, from four weeks to 30 years. Generally, they are non-callable and the interest payments are exempt from state and local taxes – especially important for investors residing in high-tax states.

"Tax-exempt" means that the interest component of bond debt service payments is exempt from federal and sometimes state and local income taxes for the bond holder. Therefore, with regard to credit quality and term of the bonds, the interest rate will be lower than for a taxable bond.