Industrial Revenue Bonds Tax Exempt

Industrial revenue bonds irbs provide a source of tax exempt or taxable bond finance for projects involving significant private activity that promote new and existing businesses encourage employment and expand the tax base of a community.

Industrial revenue bonds tax exempt. Understanding industrial revenue bonds irbs municipal bonds aka munis are tax exempt debt obligations issued by a state city or county to raise money for major capital projects such as. Jillian love main street program manager bota liaison. Cities and counties may issue industrial revenue bonds to purchase or construct industrial buildings for private entities. The maturity of most of the issues is 20 to 30 years and interest earned is generally tax exempt from federal and most state income taxes.

1 bond proceeds may be used for a variety of purposes including land acquisition building construction machinery and equipment real estate development fees and the cost of bond issuance. In addition to tax exempt industrial revenue bonds taxable industrial revenue bonds may be used for eligible existing businesses at long term fixed rates and for manufacturing projects that exceed 20 million in capital costs or do not meet other federal guidelines relative to tax exempt bond financing. Ownership of the property may be transferred to the city or county for the duration of the bond. These bonds are essentially private transactions laundered through a public entity such as an economic development authority to become tax exempt and thereby save in interest costs.

See tax exempt bond requirements for eligibility most industrial revenue bonds would be exempt from state income taxes whether or not they would be exempt from federal income taxes however since state income taxes are low this is a negligible benefit. Irbs are desired as the private business receives a lower interest rate due to the bonds tax exempt status a property tax exemption and a long term fixed rate financing package. The best known form of private activity bonds are industrial revenue bonds irbs which are also known as industrial development bonds. Tax exempt industrial development bonds page content the state of west virginia has available each calendar year the authority to issue tax exempt industrial development bonds up to the maximum established by section 146 d of the united states internal revenue code currently 321 775 000 called the statewide cap.

For a project qualifying for tax exempt bonds.