Tax Anticipation Note - TAN
Definition of 'Tax Anticipation Note - TAN'A short-term debt security issued by a state or local government to finance an immediate project that will be repaid with future tax collections. State and local governments use tax anticipation notes to borrow money, typically for one year or less and at a low interest rate, in order to finance a capital expenditure such as the construction of a road or school. The government then uses the following year's tax revenue to repay the TANs. |
|
Investopedia explains 'Tax Anticipation Note - TAN'Tax anticipation note financing helps governments smooth out the ups and downs in their revenue cycles, if the timing of their receipts does not match the timing of their expenditures. TANs are one of several types of anticipation note that state and local governments can use; others include revenue anticipation notes, tax and revenue anticipation notes and bond anticipation notes. Tax anticipation notes are a type of municipal bond, so the interest earned from TANs is generally tax exempt for investors. |
Related Definitions
Articles Of Interest
-
The Basics Of Municipal Bonds
Investing in these bonds may offer a tax-free income stream but they are not without risks. -
Weighing The Tax Benefits Of Municipal Securities
Find out how to determine whether the tax exemption offered by "munis" benefits you. -
Why Your Pension Plan Has Sovereign Debt In It
One type of security pensions tend to invest in is sovereign debt, or debt issued by a government. -
Austerity: When The Government Tightens Its Belt
When a government tightens its belt in tough economic times the entire nation feels the squeeze. -
Why You Should Invest In Municipal Bond ETFs
These versatile instruments have become popular with investors in higher tax brackets and fill a specific niche in the wide selection of fixed-income offerings. -
6 Popular ETF Types For Your Portfolio
Exchange traded funds are an extremely popular diversification tool that can protect your portfolio during troubled periods. -
Sequestration: What Will It Do And What Should You Do?
Learn about the sequester, and possible ways to play it. -
Stocks That Follow This Simple Practice Beat The Markets 6-To-1
We look at what makes Shaw Communications so special, and how you can find other smilarily special stocks. -
Top 5 Budgeting Questions Answered
You don't need a degree to understand your money, begin saving and pay down debt. -
What is a triple tax-free municipal bond?
At its core, a triple tax-free municipal bond is just like any corporate bond: it is a debt instrument, a loan given to a government authority or municipality in order to help it meet certain ...
Free Annual Reports