Notwithstanding repeated assurances from all corners that tax reform wouldn’t touch the exclusion from gross income of interest on tax-exempt bonds (here, here, and here), proposed legislation would touch it indeed, and quite profoundly. The opening statement in what is sure to be a long legislative discussion on tax reform came this morning, as the House Ways & Means Committee released the first draft of a tax reform bill, which was introduced as the Tax Cuts and Jobs Act. The high[sic]-lights, if the bill were enacted into law:
- No private activity bond issued after 2017 could be issued as a tax-exempt bond. This includes bonds issued for the benefit of 501(c)(3) organizations.
- No tax-exempt bond issued after 2017 could be issued to “advance refund” another bond.
- No tax credit bonds (regular tax credit bonds or direct pay) could be issued after 2017.
- No governmental bond issued after November 2, 2017 (!) could be used to finance a “professional sports stadium.”
Let’s take them in order, after the jump.
The Public Finance Tax Blog.
By Johnny Hutchinson and Michael Cullers on November 2, 2017
Squire Patton Boggs