TAX STATUS FOR MAINE INCOME TAX OF INTEREST INCOME FROM GOVERNMENT OBLIGATIONS
| Direct Obligation of U.S. Government |
Subject to Maine Income Tax |
| U.S. Savings Bonds – all states |
No |
| U.S. Retirement Plan Bonds |
No |
| U.S. Treasury Bonds |
No |
| U.S. Treasury Bills |
No |
| U.S. Treasury Notes |
No |
| U.S. Depository Bonds |
No |
| U.S. Certificates of Indebtedness |
No |
| |
|
Obligations of Organizations
Created or Sponsored by U.S. Government |
|
| Student Loan Marketing Association, SLMA (Sallie Mae) |
No* |
| Government National Mortgage Association, GNMA (Ginnie Mae) |
Yes |
| Federal National Mortgage Association, FNMA (Fannie Mae) |
Yes |
| Federal Home Loan Mortgage Corp., FHLMC (Freddie Mac) |
Yes |
| Federal Home Loan Banks, FHLB |
No* |
| Federal Housing Administration, FHA: |
|
| Bonds |
No* |
| Certificates of Claim |
Yes |
| Federal Farm Credit System Banks, FCS |
|
| Land Banks for Cooperatives |
No* |
| Federal Intermediate Credit Banks |
No* |
| Federal Land Banks |
No* |
| Farmers Home Administration, FMHA: |
|
| Bonds |
Yes |
| Certificates of Beneficial Ownership |
No* |
| Export – Import Bank of the U.S. |
Yes |
| |
|
| Obligations of other Governmental
Entities and Organizations |
|
| State of Maine |
No |
| Maine Municipalities |
No |
| Maine Municipal Bond Bank |
No |
| Maine Turnpike Authority |
No |
| Housing Authority of Maine (HOME) |
No |
| Finance Authority of Maine (FAME) – All Bonds |
No |
| |
|
| Obligations of states, municipalities and
Territories outside Maine, unless specific
Exemption granted by U.S. Congress |
Yes |
| |
|
| Puerto Rico government – all bonds |
No* |
| |
|
| Local housing authorities in District of
Columbia, Guam and U.S, Virgin Islands
If exempt from federal tax |
No* |
| |
|
| Local housing authorities in states other than Maine |
Yes |
| |
|
| Tennessee Valley Authority (TVA) – all bonds |
No* |
| Foreign Government bonds |
Yes |
| International Bank for Reconstruction & Development |
Yes |
| Inter-American Development Bank |
Yes |
| |
|
| *Exemption from all state and local income taxes granted by a specific federal law. |
|
| |
| Money Market Funds: |
| A fund sold by a firm recognized as a regulated investment company by Internal Revenue Service may pass through to the shareholders tax exempt interest and dividends permitting the income to retain its original character. The statement received by shareholders notifies them whether the income is exempt from federal tax. |
| |
| Under a repurchase agreement, Money Market or Mutual Fund income does not retain its original character. In this case, the court has ruled that the fund, not the taxpayer, owns the bonds. |
| |
| Nuveen Bonds: |
| Nuveen Bonds are municipal bonds from all over. The taxpayer should receive a statement advising him what states are involved. If the bonds originate in Maine they are not taxable. If the bonds originate outside Maine they are taxable. |
| |
References:
- Moody’s Municipal and Government Manual
- Handbook of Securities of the United States Government and Federal
Agencies.
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