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Types of Bonds

State Taxation of Municipal Bonds for Individuals

Notes:

Bonds are designated "X" if taxable. All others are exempt or excluded from tax, or no income taxes are levied by those states. In certain cases, these designations pertain only to general obligation bonds, or to bonds in general. For example, a state may not generally exempt bonds, but some bonds may be specifically exempted by the laws authorizing their issuance.

  1. Income earned from a bond issued by another state is taxable only if such other state imposes a tax on Utah bonds.
  2. Interest from some obligations is exempt from tax.
  3. Taxable only if long form is used.
  4. Some bonds may be exempt by state law.
  5. Pro-rata adjustment is allowed.
  6. Interest on some obligations is exempt by law.
  7. Taxable only for gross income tax purposes.
  8. Interest on U.S. obligations and obligations of all states would not be taxable if the investment allocation percentage is zero. Otherwise, the interest is taxable at the investment allocation percentage.
 
State State’s Own Bonds Other State’s Bonds
Alabama   X
Alaska (no tax)    
Arizona   X
Arkansas   X
California Income   X
Colorado   X
Connecticut   X
Delaware   X
District of Columbia    
Florida  
Georgia   X
Hawaii   X
Idaho   X
Illinois X2 X2
Indiana    
Iowa X2 X
Kansas X
Kentucky   X
Louisiana   X
Maine   X
Maryland   X
Massachusetts   X
Michigan   X
Minnesota   X
Mississippi   X
Missouri   X
Montana   X
Nebraska   X
Nevada (no tax)    
New Hampshire   X
New Jersey   X
New Mexico   X
New York   X
North Carolina   X
North Dakota   X3
Ohio   X
Oklahoma X4 X4
Oregon   X
Pennsylvania   X
Rhode Island   X
South Carolina   X
South Dakota (no tax)    
Tennessee   X
Texas (no tax)    
Utah X2 X1 2
Vermont   X
Virginia   X
Washington (no tax)    
West Virginia   X
Wisconsin X2 X2
Wyoming (no tax)    

Source: Reproduced with permission from State Tax Guide, published and copyrighted by Commerce Clearing House, Inc., 4025 W. Peterson Ave., Chicago, Illinois 60646. Reflects law through 01/01/10.

 

All information and opinions contained in this publication were produced by the Securities Industry and Financial Markets Association from our membership and other sources believed by the Association to be accurate and reliable. By providing this general information, the Securities Industry and Financial Markets Association makes neither a recommendation as to the appropriateness of investing in fixed-income securities nor is it providing any specific investment advice for any particular investor. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information and sources may be required to make informed investment decisions.