It appears that the tax exemption for those investing in municipal bonds may be dropped as a part of the Fiscal Cliff negotiations in Washington. Municipal bonds are used by cities, counties, and states to finance capital expenditures. The bonds then are exempt from federal taxes and from most state and local taxes. Rapid City Mayor Sam Kooiker says that municipal bonding has been a staple across the nation, allowing people to invest in their communities. He says removing the tax exemptions for municipal bonds would have devastating consequences…
Kooiker said bonds don’t offer a high yield of return, but they are income tax deductible, which is their one true advantage…
Kooiker said a new 22-million dollar bond is coming out in the next few weeks…
He said the resolution, which will be on the January 2 Legal and Finance committee agenda, and asks Congress and the State to continue the tax exemptions for municipal bonds