For state residents,interest on most bonds issued by their state government is
A) exempt from state and federal income taxes.
B) exempt from state, but not from federal, income taxes.
C) exempt from federal, but not from state, income taxes.
D) subject to both state and federal income taxes.

Question

Quizplus · Accepted Answer

Most state government bonds are exempt from both state and federal income taxes for residents of that state. This exemption is designed to encourage residents to invest in their state's infrastructure and development projects. However, please note that other types of bonds, such as private activity bonds, may not be tax-exempt at both levels.

For State Residents,interest on Most Bonds Issued by Their State