Municipal Bond Forum
State where you file dictates whether you pay taxes
Q
Is it a crime to own interest-paying municipal bonds from different states?
A
James A. Klotz responds:
No, it’s not a crime. States that have income taxes, however, tax interest generated by bonds issued in other states. The state in which you file taxes determines state taxability of your bonds. For example, Florida residents enjoy tax-free income from any state as Florida does not have a state tax.
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The responses provided in this forum are meant to address specific questions posed by investors about their municipal bonds and to provide market insight for our general audience. Please note, your investments, objectives, results and experience may differ significantly. Our answers and any potential strategies discussed should not be construed as a solicitation to buy nor sell any security or investment product. All investing entails risk.