I read in Fortune that someone in Kentucky is challenging the state’s right to tax out of state muni’s. Apparently the Supreme Court will be deciding.
Any take on the effect it will have on Munis and/or 529s?
It should open up the Muni market as any state Muni would be free from state and federal taxes…
[quote=noggin]It should open up the Muni market as any state Muni would be free from state and federal taxes…[/quote]
Wide open! and California’s cost of funds would drop by alot.
Personally, I see little chance of the court ruling that any state's muni is "tax-free" in Kentucky. What happens if a state reverses itself and decides to tax muni interest? Does that mean it's then taxable in Kentucky?
I agree with Rush Limbaugh in that the tax rates we see today will be the lowest we'll ever see in our lifetimes. (Implying that they're headed back up.)
It’s not going to move the cost of funds much…several states, including Florida, have no income tax and Indiana and Washington DC do not tax OOS muni interest. Some other states have low tax rates that allow residents to buy munis from a variety of locales.