What Makes A “good” Muni Bond Tax Bill? – Tax – United States – Mondaq News Alerts

United States: What Makes A “good” Muni Bond Tax Bill?

28 June 2021

Squire Patton Boggs LLP

619558

To print this article, all you need is to be registered or login on Mondaq.com.

Do you feel it? Good vibes for tax-advantaged bond legislation permeate the air around us. White smoke emerged from the White House on June 24, signifying that the President and key Senate leaders had reached a deal on an infrastructure bill. The deal includes “public private partnerships, private activity bonds, direct pay bonds and asset recycling for infrastructure investment.” Hey, that’s us!1

It feels downright 2009ish. The prospect of new bond legislation has us thinking: Is there a right or wrong way to write a tax-advantaged bond bill?

Countless books have been written about whether there is an objectively “good” way to draft legislation. Politics will determine the core substance of any new tax-advantaged bond legislation, and Congress will decide, in at least some cases based on logic, whether to favor one type of project or financing structure over another. Taking that as a given, all other things being equal, are there neutral principles that produce “better” tax-advantaged bond legislation?

We think so.

In the coming weeks, we will offer some best (or at least “not awful”) practices, with some examples of legislation that does and doesn’t work along these lines. We are not naive enough to think that members of Congress or their staff will read these tips, much less actually implement them. But “futile gestures” and “shouting into the void” are more or less the motivating ethos ’round these parts.

First up next week: Always provide for refundings. Enjoy the weekend.

Footnote 

1 Of course, a separate element of the deal is to “extend [the] mandatory sequester.” Booooo.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

POPULAR ARTICLES ON: Tax from United States

IRS Adds Credit Funds To Audit Campaign

Mayer Brown

When the Internal Revenue Service (IRS) determines that a particular type of transaction or industry practice raises tax compliance challenges, it sometimes designates such items for special audit scrutiny.