Tax Exempt


DEFINITION of 'Tax Exempt'

To be free from, or not subject to, taxation by regulators or government entities. A tax exempt entity can be excused from a single or multiple taxation laws. Governments are often trying to encourage investment when exempting taxation.


Certain securities or investor groups can be referred to as tax exempt. For example, the interest earned from municipal bonds is exempt from federal or state taxation. Many pension plans and income trusts are also designed to be tax exempt at the corporate level.

Other forms of tax exempt entities include, but are not limited to, churches, religious organizations, amateur sports leagues and charities that try to provide relief for the poor and underprivileged.

  1. Tax-Exempt Sector

    The market niche comprised of investment vehicles exempt from ...
  2. Tax Efficiency

    An attempt to minimize tax liability when given many different ...
  3. Offshore Mutual Fund

    A mutual fund that is based in an offshore jurisdiction, which ...
  4. Tax-Exempt Interest

    Interest income that is not subject to federal income tax. Tax-exempt ...
  5. Yield Equivalence

    The interest rate on a taxable security that would render a return ...
  6. Pension Plan

    A type of retirement plan, usually tax exempt, wherein an employer ...
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