Revenue Ruling 11-001: Taxability of Build America Bonds

The Louisiana Department of Revenue has issued Revenue Ruling 11-001, which discusses the treatment of interest income from Build America Bonds for Louisiana individual income tax purposes.

Build America Bonds (BABs) are a financing tool for state and local governments that were created in the American Recovery and Reinvestment Act of 2009. Unlike traditional state and local bonds, interest from these bonds is included in the investor‟s federal gross income.

Conclusion

Income from interest and credits from BABs issued by the state of Louisiana or its local governments is not subject to Louisiana individual income tax. Income from interest and credits from BABs issued by states and local governments other than the state of Louisiana or its local governments is subject to Louisiana individual income tax.

Click here to read the entire ruling.

A Revenue Ruling is issued under the authority of LAC 61:III.101(C). A Revenue Ruling is written to provide guidance to the public and to Department of Revenue employees. It is a written statement issued to apply principles of law to a specific set of facts. A Revenue Ruling does not have the force and effect of law and is not binding on the public. It is a statement of the department’s position and is binding on the department until superseded or modified by a subsequent change in statute, regulation, declaratory ruling, or court decision.

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