§ 103601 Bond Tax Exemption Rules

This law says that bonds and other debt papers the district sells, plus the interest they earn, don’t have to pay any California state taxes, except for a few special taxes.

Key Takeaways

•Bonds and debt papers from the district are not subject to state taxes.
•Interest earned on those bonds is also tax‑free in California.
•Only transfer, franchise, inheritance, and estate taxes can still apply.

Example

A city sells a bond to raise money for a new library. A resident buys the bond and later gets interest payments.

The resident doesn’t have to pay California income tax on the interest, and the city doesn’t have to pay state tax on the bond itself. If the resident later sells the bond, they might have to pay a transfer tax, and if they inherit the bond, inheritance or estate tax could apply.

All bonds and other evidences of indebtedness issued by the district under the provisions of this part, and the interest thereon, are free and exempt from all taxation within the State of California, except for transfer, franchise, inheritance, and estate tax. (Added by Stats. 1974, Ch. 502.)

This law says that bonds and other debt papers the district sells, plus the interest they earn, don’t have to pay any California state taxes, except for a few special taxes.

Key Takeaways

•Bonds and debt papers from the district are not subject to state taxes.
•Interest earned on those bonds is also tax‑free in California.
•Only transfer, franchise, inheritance, and estate taxes can still apply.

Example

A city sells a bond to raise money for a new library. A resident buys the bond and later gets interest payments.

Key Takeaways

Example

Key Terms

References

§ 103601 Bond Tax Exemption Rules

Key Takeaways

Example

Key Terms

References

Key Takeaways

Example

Key Terms

Related Statutes

References

Key Takeaways

Example

Key Terms

Related Statutes

References