Tax-Exemption on Muni Bonds ‘Untouched’ in House Tax-Cut Plan

Public finance lobbyists and bankers breathed a sigh of relief as the key federal subsidy underpinning municipal bonds appeared unscathed in a bill House tax writers released Monday.

The tax package released by the House Ways and Means Committee doesn’t include material changes to tax-exempt municipal bond financing. Most muni bonds pay interest that’s exempt from federal tax. Bankers and borrowers have warned for months that the tax break was at risk as lawmakers look for ways to raise revenue to offset the cost of extending President Donald Trump’s 2017 tax cuts.

“We are thrilled the House Committee ...