There are many ways organizations can secure funding for capital projects, including cash reserves, tax-exempt debt, taxable debt and donations. Nonprofit senior living communities that use tax-exempt bonds to fund capital...more
In a previous article, we introduced the fundamental concepts of the yield restriction and rebate rules set out in the Internal Revenue Code and Treasury Regulations and how tax-exempt bonds may be affected by high interest...more
A U.S. Tax Court decision entered on Feb. 20, 2024, in 23rd Chelsea Associates LLC v. Commissioner of Internal Revenue held that bond issuance and related financing costs incurred in connection with the development of a...more
State and local governments undertaking clean energy projects may be eligible for cash payments equal to the renewable electricity production tax credit or energy investment tax credit that would have been available to a...more
As housing costs have risen in the first part of the 21st century, American households have struggled to compete for high-quality housing near areas of employment in major cities, suburbs, exurbs and rural areas (especially...more
Municipal tender offers have rapidly increased in volume since 2020, and 2023 is anticipated to be the highest volume year for voluntary municipal tender offers. As reported by the Bond Buyer, 2021 and 2022 each saw about $4...more
Over the past year and half, interest rates have increased significantly. For most investors, the increase in interest rates is welcome. But for issuers of tax-exempt bonds, or cities, states and other qualifying governmental...more
The Internal Revenue Service recently issued a notice of proposed adverse tax determination in what might be a harbinger of additional enforcement actions targeting alleged hedge bonds. The Port of Port Arthur Navigation...more
As of this date, the Federal Open Market Committee (FOMC) has increased short-term interest rates eleven times in the last sixteen months to combat inflation. As a result, interest rates on short-term investments have...more
The U.S. Department of Commerce on June 26, 2023, announced funding for each state, U.S. territory and the District of Columbia for high-speed internet infrastructure development through the Broadband Equity Access and...more
The availability of “affordable housing” has become a major issue in many cities, counties and states across the United States, and South Carolina is no exception. To help address the affordable housing shortage, in 2020,...more
In early March, Democrats Dan Kildee (D-MI) and Senator Michael Bennett (D-CO) reintroduced their “Financing Lead Out of Water (FLOW) Act,” which would amend the Federal Tax Code to allow public water systems to pay for...more
What is arbitrage? Generally, arbitrage is the simultaneous buying and selling of securities in different markets to exploit the difference in pricing. Specific to the tax-exempt bond market, arbitrage arises when a...more
Since March 2022, the Federal Reserve has gradually raised interest rates in its ongoing fight against inflation and has indicated plans to continue increasing rates through 2023. Due to this rising interest rate environment,...more
Legislation has been introduced in the United States House and Senate entitled the “No Tax Subsidies for Stadiums Act of 2023,” which would eliminate the tax exemption for bonds used to finance professional sports stadiums....more
As we welcome 2023, and the final six months of certain London Interbank Offering Rates (“LIBOR”), issuers and borrowers of LIBOR-based tax-exempt bonds should evaluate whether changes to their financing documents are...more
Facilities owned by nonprofits and government entities are frequently financed with tax-exempt bonds and managed by for-profit management companies. To avoid tainting the tax-exempt status of the interest payable on...more
On October 11, 2022, the Florida District Court of Appeals, First District held oral arguments on State Farm Mutual Automobile Insurance Company v. Florida Department of Revenue, a case relating to the “add back” to...more
The Internal Revenue Service (“IRS”) has an active program of auditing tax-exempt bonds, and conducts those audits in a manner intended to ensure confidential information is not improperly disclosed. As part of those efforts,...more
The bipartisan Infrastructure Investments and Jobs Act (IIJA), signed into law in November 2021, provides a "once in a generation" investment into the nation's infrastructure. In addition to making significant investments in...more
More than 30 million Americans still lack access to reliable high-speed internet. The need for reliable and affordable internet access has become increasingly important as the economy becomes more dependent on internet...more
For public hearings held on or after March 18, 2022, new Revenue Procedure 2022-20, released by the Internal Revenue Service, allows issuers and approving governmental units to conduct telephonic public hearings for...more
The tax-exempt bond market is perennially under heightened scrutiny by various regulators, including the Internal Revenue Service (the "IRS"), the United States Securities and Exchange Commission (the "SEC") and the Municipal...more
Commercial banks and other financial institutions (“lender” or “lenders”) have historically provided financing to both governmental entities and nonprofits on a tax-exempt basis through loans and direct purchases of municipal...more
Tax-exempt bonds can now be added to the list of ways in which carbon capture, utilization and storage (“CCUS”) projects can be financed. Specifically, the Infrastructure Investment and Jobs Act (the “Act”) amends section...more