§ 14064 Equipment Obligation Sales

• •The government can sell special money notes (called 'equipment obligations') to get money for equipment.
• •These notes can be sold in two ways: either to the highest bidder in public or through a private deal.
• •The government can sell these notes for up to 5% less than their face value.
• •The money made from these notes, including the interest, is tax-free in the state, except for gift taxes.

Imagine the city needs new fire trucks but doesn't have enough money.

The city can sell special money notes to people or companies to get the money for the fire trucks. If someone buys a $100 note, the city might sell it for $95. The person who buys the note doesn't have to pay taxes on the money they make from it, except if it's a gift.