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Feb 10, 2007 3:59 am

Incredible Hulk

Joined: 2006-03-24Offline

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?

Feb 10, 2007 5:00 am

noggin

Joined: 2004-11-30Offline

It should open up the Muni market as any state Muni would be free from state and federal taxes…

Feb 10, 2007 5:06 am

AllREIT

Joined: 2006-12-16Offline

[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.

Feb 11, 2007 1:03 am

doberman

Joined: 2005-02-23Offline

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.)

Feb 11, 2007 3:45 am

Indyone

Joined: 2005-05-31Offline

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.