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ITG FAQ #12 Answer-What are the economic benefits to tribal governments of issuing tax-exempt bonds?

The interest income paid to the holders of tax-exempt bonds is not includable in their gross income for federal income tax purposes. Thus, by issuing tax-exempt bonds for qualified purposes, tribal governments are able to achieve a significant interest cost savings by taking advantage of the difference between the relative interest rates paid on taxable and tax-exempt debt.

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Page Last Reviewed or Updated: 17-Oct-2013