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U.S. Code

§ 103. Interest on State and local bonds

(a) Exclusion
Except as provided in subsection (b), gross income does not include interest on any State or local bond.
(b) Exceptions
Subsection (a) shall not apply to—
(1) Private activity bond which is not a qualified bond
Any private activity bond which is not a qualified bond (within the meaning of section 141).
(2) Arbitrage bond
Any arbitrage bond (within the meaning of section 148).
(3) Bond not in registered form, etc.
Any bond unless such bond meets the applicable requirements of section 149.
(c) Definitions
For purposes of this section and part IV—
(1) State or local bond
The term “State or local bond” means an obligation of a State or political subdivision thereof.
(2) State
The term “State” includes the District of Columbia and any possession of the United States.
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