[taxabletalk] Russ: States Can Give Preferential Treatment to Their Own Muni Bonds

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Posted by Russ:
States Can Give Preferential Treatment to Their Own Muni Bonds
http://www.taxabletalk.com/posts/1211208662.shtml


   The Supreme Court ruled today in Dept. of Revenue v. Davis that states
   can give preferential treatment to their own municipal bonds (over
   those of other states). Thus, the practice of paying state income tax
   on out-of-state municipal bonds will continue. [1]The Supreme Court
   ruling was fractured, with Justice Souter's opinion, four concurring
   opinions, and two dissenting opinions.
   The main impact of this decision is that municipal bonds will tend to
   be purchased by individuals who reside in that state, so that they can
   obtain the largest tax impact. The decision is good news for
   California, as a decision that would have invalidated preferential
   treatment would have likely cost the state millions of dollars in
   additional interest.
   [2]Link to previous coverage of this case on Taxable Talk

References

   1. http://www.scotusblog.com/wp/wp-content/uploads/2008/05/06-666.pdf
   2. http://www.taxabletalk.com/posts/chain_1179804016.shtml