What does it mean when a bond or note is taxable?
The interest earned on most GO bonds issued by the State of California is exempt from federal and state income tax, subject to rules relating to tax-exempt bonds set forth in the Internal Revenue Code. However, because of the programs funded by these bonds, it is not certain the bonds meet all of the tax rules so the States bond counsel will not provide its normal opinion that interest on these bonds is exempt from federal income taxation. The interest income on these bonds is still exempt from State of California personal income tax. Investors should consult their brokers or other financial advisors to obtain comparisons between taxable State GO bonds and tax-exempt investment alternatives. Read the Tax Matters section of the official statement for the bond sale to learn about the bonds tax status.
