ITG FAQ #5 Answer-What is an "essential governmental function" in this context?


Internal Revenue Code section 7871(e) states that "for the purposes of this section, the term 'essential governmental function' shall not include any function which is not customarily performed by State and local governments with general taxing powers". The financing of certain types of public projects such as roads, water and sewer facilities, government buildings, as well as police and emergency services clearly fall into this category.

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