Internal Revenue Code · 26 U.S.C.
§ 103. Interest on State and local bonds
Official text, no changes From the Office of the Law Revision Counsel, release point 119-121 (current through Public Law 119-121 (October 9, 2026)). Compare it with the official text at uscode.house.gov (external site).
Cite as 26 U.S.C. § 103
At a glance
Read from the text, the source credit and the official notes. Not part of the law.
- Status
- In force
- Enacted
- June 28, 1968 by Pub. L. 90–364
- Last amended
- November 10, 1988 by Pub. L. 100–647
- Amendments
- 19 dated changes in the source credit
- Length
- 3 subsections · 507 words · about 2 min to read
- Defines
- 2 terms
- Cross-references
- cites 3; cited by 37 Code sections and 84 other regulations
- Regulations
- 8 issued under this section
Any private activity bond which is not a qualified bond (within the meaning of section 141).
Any bond unless such bond meets the applicable requirements of section 149.
The term “State or local bond” means an obligation of a State or political subdivision thereof.
The term “State” includes the District of Columbia and any possession of the United States.
(Aug. 16, 1954, ch. 736, 68A Stat. 29; Pub. L. 90–364, title I, § 107(a), June 28, 1968, 82 Stat. 266; Pub. L. 90–634, title IV, § 401(a), Oct. 24, 1968, 82 Stat. 1349; Pub. L. 91–172, title VI, § 601(a), Dec. 30, 1969, 83 Stat. 656; Pub. L. 92–178, title III, § 315(a), (b), Dec. 10, 1971, 85 Stat. 529; Pub. L. 94–164, § 7(a), Dec. 23, 1975, 89 Stat. 976; Pub. L. 94–182, title III, § 301(a), Dec. 31, 1975, 89 Stat. 1056; Pub. L. 94–455, title XIX, §§ 1901(a)(17), (b)(8)(B), 1906(b)(13)(A), title XXI, §§ 2105(a)–(c), 2137(d), Oct. 4, 1976, 90 Stat. 1765, 1766, 1794, 1834, 1902, 1931; Pub. L. 95–339, title II, § 201(a), Aug. 8, 1978, 92 Stat. 467; Pub. L. 95–600, title III, §§ 331(a), (b), 332(a), 333(a), 334(a), (b), title VII, § 703(j)(1), (q)(1), Nov. 6, 1978, 92 Stat. 2839–2841, 2941, 2944; Pub. L. 96–222, title I, § 107(a)(3)(C), Apr. 1, 1980, 94 Stat. 223; Pub. L. 96–223, title II, §§ 241(a), 242(a), 244(a), Apr. 2, 1980, 94 Stat. 281, 283, 286; Pub. L. 96–499, title XI, § 1103, Dec. 5, 1980, 94 Stat. 2669; Pub. L. 97–34, title VIII, §§ 811(a), (b), 812(a), Aug. 13, 1981, 95 Stat. 349, 350; Pub. L. 97–248, title II, §§ 214(a)–(e), 215(a), (b), 217(a)–(d), 219(a), 221(a), (b), (c)(1), title III, § 310(b)(1), (c)(1), (2), Sept. 3, 1982, 96 Stat. 466–469, 472–474, 477, 478, 596, 599; Pub. L. 97–424, title V, § 547(a), Jan. 6, 1983, 96 Stat. 2199; Pub. L. 97–473, title II, § 202(b)(2), Jan. 14, 1983, 96 Stat. 2609; Pub. L. 98–369, div. A, title IV, § 474(r)(4), title VI, §§ 621–624(a), (b)(2), (3), 626(a), 627, 628(a), (c)–(e), (g), 630, July 18, 1984, 98 Stat. 839, 915–922, 924, 926, 928, 931–933; Pub. L. 99–272, title XIII, § 13209(e), Apr. 7, 1986, 100 Stat. 323; Pub. L. 99–514, title XIII, § 1301(a), title XVIII, §§ 1864(a)(1), (b)–(e), 1865(a), 1869(a), (b), 1870, 1871(a)(1), (b), 1899A(2)–(4), Oct. 22, 1986, 100 Stat. 2602, 2885, 2886, 2888, 2890, 2891, 2958; Pub. L. 100–647, title I, § 1013(a)(34)(A), (c)(12)(A), Nov. 10, 1988, 102 Stat. 3544, 3547.)
Terms defined here
Where the text says “the term … means”. Select a term to jump to its definition.
Regulations under this section
Treasury regulations (26 CFR) issued under § 103
- § 1.103-1 Interest upon obligations of a State, territory, etc.
- § 1.103-7 Industrial development bonds.
- § 1.103-8 Interest on bonds to finance certain exempt facilities.
- § 1.103-9 Interest on bonds to finance industrial parks.
- § 1.103-10 Exemption for certain small issues of industrial development bonds.
- § 1.103-11 Bonds held by substantial users.
- § 1.103-16 Obligations of certain volunteer fire departments.
- § 5f.103-1 Obligations issued after December 31, 1982, required to be in registered form.
Cross-references
Computed from the citations in the text of Title 26 and 26 CFR.
This section cites 3 other sections
- § 141 Private activity bond; qualified bond
- § 148 Arbitrage
- § 149 Bonds must be registered to be tax exempt; other requirements
Cited by 37 Code sections
- § 42(h)(4)(A) Low-income housing credit
- § 45(b)(3)(A) Electricity produced from certain renewable resources, etc.
- § 45D(i)(1) New markets tax credit
- § 45K(b)(3)(A)(i)(II) Credit for producing fuel from a nonconventional source
- § 57(a)(5)(C)(i) Items of tax preference
- § 142(f)(4)(B)(ii) Exempt facility bond
- § 143(m)(5)(B)(i) Mortgage revenue bonds: qualified mortgage bond and qualified veterans’ mortgage bond
- § 144(a)(10)(B)(ii)(II) Qualified small issue bond; qualified student loan bond; qualified redevelopment bond
- § 145(b)(2)(B)(ii)(I) Qualified 501(c)(3) bond
- § 148(a) Arbitrage
- § 149(a)(1) Bonds must be registered to be tax exempt; other requirements
- § 150(d) Definitions and special rules
- § 168(g)(5)(A) Accelerated cost recovery system
- § 265(b)(3)(B)(ii)(II) Expenses and interest relating to tax-exempt income
- § 465(c)(7)(D)(iv)(I) Deductions limited to amount at risk
- § 512(b)(19)(E)(ii)(III) Unrelated business taxable income
- § 593(b)(2)(D)(iii) Reserves for losses on loans
- § 643(a)(5) Definitions applicable to subparts A, B, C, and D
- § 646(e)(1) Tax treatment of electing Alaska Native Settlement Trusts
- § 667(a) Treatment of amounts deemed distributed by trust in preceding years
- § 811(b)(3)(A) Accounting provisions
- § 832(c)(7) Insurance company taxable income
- § 834(c)(1) Determination of taxable investment income
- § 842(c)(1)(A)(ii) Foreign companies carrying on insurance business
Show 13 more
- § 851(b)(3)(B)(iii) Definition of regulated investment company
- § 852(a)(1)(B) Taxation of regulated investment companies and their shareholders
- § 871(g)(1)(B)(ii) Tax on nonresident alien individuals
- § 1275(a)(3)(A) Other definitions and special rules
- § 1276(a)(4) Disposition gain representing accrued market discount treated as ordinary income
- § 1278(b)(1)(B) Definitions and special rules
- § 3401(a)(7) Definitions
- § 4940(c)(5) Excise tax based on investment income
- § 4942(f)(2)(A) Taxes on failure to distribute income
- § 7478(a)(1) Declaratory judgments relating to status of certain governmental obligations
- § 7518(d)(2)(D) Tax incentives relating to merchant marine capital construction funds
- § 7701(a)(19)(C)(ii) Definitions
- § 7871(a)(4) Indian tribal governments treated as States for certain purposes
Cited in 84 regulations not issued under it
- § 1.25-1T Credit for interest paid on certain home mortgages (Temporary).
- § 1.25-3T Qualified mortgage credit certificate (Temporary).
- § 1.42-1T Limitation on low-income housing credit allowed with respect to qualified low-income buildings receiving housing credit allocations from a State or local housing credit agency (temporary).
- § 1.42-5 Monitoring compliance with low-income housing credit requirements.
- § 1.42-14 Allocation rules for post-2000 State housing credit ceiling amount.
- § 1.42-15 Available unit rule.
- § 1.56(g)-1 Adjusted current earnings.
- § 1.61-7 Interest.
- § 1.103A-2 Qualified mortgage bond.
- § 1.141-2 Private activity bond tests.
- § 1.142-1 Exempt facility bonds.
- § 1.142(a)(5)-1 Exempt facility bonds: Sewage facilities.
- § 1.142(f)(4)-1 Manner of making election to terminate tax-exempt bond financing.
- § 1.144-1 Qualified small issue bonds, qualified student loan bonds, and qualified redevelopment bonds.
- § 1.145-1 Qualified 501(c)(3) bonds.
- § 1.147-1 Other requirements applicable to certain private activity bonds.
- § 1.147(f)-1 Public approval of private activity bonds.
- § 1.148-0 Scope and table of contents.
- § 1.148-1 Definitions and elections.
- § 1.148-10 Anti-abuse rules and authority of Commissioner.
- § 1.148-11 Effective/applicability dates.
- § 1.149(b)-1 Federally guaranteed bonds.
- § 1.149(d)-1 Limitations on advance refundings.
- § 1.149(e)-1 Information reporting requirements for tax-exempt bonds.
Show 60 more
- § 1.150-1 Definitions.
- § 1.150-2 Proceeds of bonds used for reimbursement.
- § 1.150-3 Retirement standards for state and local bonds.
- § 1.148-11A Effective dates.
- § 1.163(j)-10 Allocation of interest expense, interest income, and other items of expense and gross income to an excepted trade or business.
- § 1.165-12 Denial of deduction for losses on registration-required obligations not in registered form.
- § 1.199A-8 Deduction for income attributable to domestic production activities of specified agricultural or horticultural cooperatives.
- § 1.263(a)-3 Amounts paid to improve tangible property.
- § 1.265-2 Interest relating to tax exempt income.
- § 1.448-1T Limitation on the use of the cash receipts and disbursements method of accounting (temporary).
- § 1.501(c)(21)-1 Black lung trusts—certain terms.
- § 1.643(a)-5 Tax-exempt interest.
- § 1.652(b)-1 Character of amounts.
- § 1.809-5 Deductions.
- § 1.815-3 Shareholders surplus account.
- § 1.822-5 Mutual insurance company taxable income.
- § 1.822-8 Determination of taxable investment income.
- § 1.860-2 Requirements for deficiency dividends.
- § 1.871-12 Determination of tax on treaty income.
- § 1.882-5 Determination of interest deduction.
- § 1.884-1 Branch profits tax.
- § 1.952-2 Determination of gross income and taxable income of a foreign corporation.
- § 1.954-2 Foreign personal holding company income.
- § 1.988-3 Character of exchange gain or loss.
- § 1.988-6 Nonfunctional currency contingent payment debt instruments.
- § 1.1001-3 Modifications of debt instruments.
- § 1.1232-3 Gain upon sale or exchange of obligations issued at a discount after December 31, 1954.
- § 1.1287-1 Denial of capital gains treatment for gains on registration-required obligations not in registered form.
- § 1.1366-1 Shareholder's share of items of an S corporation.
- § 1.1397E-1 Qualified zone academy bonds.
- § 1.1411-1 General rules.
- § 1.1441-2 Amounts subject to withholding.
- § 1.1502-13 Intercompany transactions.
- § 1.1502-32 Investment adjustments.
- § 1.6045-2 Furnishing statement required with respect to certain substitute payments.
- § 1.6049-2 Interest and original issue discount subject to reporting in calendar years before 1983.
- § 1.6049-4 Return of information as to interest paid and original issue discount includible in gross income after December 31, 1982.
- § 1.6049-5 Interest and original issue discount subject to reporting after December 31, 1982.
- § 1.6662-4 Substantial understatement of income tax.
- § 1.7872-5T Exempted loans (temporary).
- § 1.9006-1 Interest and penalties in case of certain taxable years.
- § 3.0 Statutory provisions; section 607, Merchant Marine Act, 1936, as amended.
- § 3.4 Establishment of accounts.
- § 4.954-2 Foreign personal holding company income; taxable years beginning after December 31, 1986.
- § 6a.103A-1 Interest on mortgage subsidy bonds.
- § 6a.103A-2 Qualified mortgage bond.
- § 6a.103A-3 Qualified veterans' mortgage bonds.
- § 31.3406(a)-4 Time when payments are considered to be paid and subject to backup withholding.
- § 31.3406(b)(2)-1 Reportable interest payment.
- § 46.4701-1 Tax on issuer of registration-required obligation not in registered form.
- § 53.4940-1 Excise tax on net investment income.
- § 53.4942(a)-2 Computation of undistributed income.
- § 53.4968-2 Net investment income.
- § 57.2 Explanation of terms.
- § 301.6362-4 Rules for adjustments relating to qualified resident taxes.
- § 301.6363-1 State agreements.
- § 301.7701-13A Post-1969 domestic building and loan association.
- § 301.7803-2 Internal Revenue Service Independent Office of Appeals resolution of Federal tax controversies without litigation.
- § 305.7871-1 Indian tribal governments treated as States for certain purposes.
- § 601.201 Rulings and determinations letters.
Amendment history
From the source credit and the official notes, newest first.
- Amended by Pub. L. 100–647Parts changed in 1988: (b)(6)(N) (c)(7)
- Amended by Pub. L. 99–514Parts changed in 1986: (a) (b) (b)(11) (b)(13) (b)(16)(A) (b)(17)(A) (c) (d) (h) (h)(2)(A) (h)(5)(A) (i) (l) (l)(2)(F) (m) (m)(1) (m)(3)(B) (n) (n)(6)(A) (n)(7)(C)(i) (n)(10)(B) (n)(10)(D) (n)(13) (o) (p) (p)(4)
- Amended by Pub. L. 99–272
- Amended by Pub. L. 98–369Parts changed in 1984: (b)(4) (b)(6)(F)(iv) (b)(6)(N) (b)(6)(P) (b)(7) (b)(13) (b)(15) (b)(16) (c) (c)(1) (c)(6) (h) (m)(1) (m)(2)(B) (m)(3) (n) (o)
- Amended by Pub. L. 97–473Parts changed in 1983: (m) (n)
- Amended by Pub. L. 97–424
- Amended by Pub. L. 97–248Parts changed in 1982: (b)(2) (b)(4) (b)(6)(C) (b)(6)(F)(iv) (b)(6)(K) (b)(9)(A) (b)(10) (b)(11) (b)(12) (b)(13) (b)(14) (h) (j) (k) (l) (m)
- Amended by Pub. L. 97–34Parts changed in 1981: (b)(4)(I) (b)(9) (i)
- Amended by Pub. L. 96–499Parts changed in 1980: (b)(4) (b)(4)(A) (b)(4)(H) (b)(6)(J) (b)(8) (c)(5) (g) (h) (i)
- Amended by Pub. L. 96–223
- Amended by Pub. L. 96–222
- Amended by Pub. L. 95–600Parts changed in 1978: (b)(1) (b)(4) (b)(6)(D) (b)(6)(I) (b)(7) (c)(1) (c)(2)(A) (c)(5) (d) (e) (f) (g)
- Amended by Pub. L. 95–339
- Amended by Pub. L. 94–455Parts changed in 1976: (a) (b) (c) (d) (e) (f)
- Amended by Pub. L. 94–182Parts changed in 1975: (e)
- Amended by Pub. L. 94–164
- Amended by Pub. L. 92–178Parts changed in 1971: (c)(4)(E) (c)(4)(F) (c)(4)(G) (c)(6)(F)(iii)
- Amended by Pub. L. 91–172Parts changed in 1969: (d)
- Amended by Pub. L. 90–634Parts changed in 1968: (c) (c)(6)(D) (d)
- Enacted by Pub. L. 90–364
Where it sits in the Code
- Subtitle A Income Taxes
- Chapter 1 NORMAL TAXES AND SURTAXES
- Subchapter B Computation of Taxable Income
- Part III ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME
Nearby sections
Official notes
The Law Revision Counsel's notes for this section (amendments, effective dates and related laws) are long, so they have their own page.