Number: RS22803
Title: Dormant Commerce Clause and State Treatment of Tax-Exempt Bonds
Authors: Erika Lunder, American Law Division 
Abstract: Most states exempt from state income taxes the interest earned on bonds issued by that particular state and its political subdivisions, while taxing the interest earned on bonds issued by other states and their political subdivisions. Some argue that these state tax schemes violate the Commerce Clause by discriminating against out-of-state bonds. Courts in two states have examined this issue. On November 5, 2007, the U.S. Supreme Court heard oral arguments in one of these cases, Department of Revenue of Kentucky v. Davis.
Pages: 6
Date: February 6, 2008