§ 142-12.1. Effect of federal taxation of interest income on state or local bonds on issuance thereof; continuation of state tax exemptions. - North Carolina Statutes

§142‑12.1.  Effect of federal taxation of interest income on state orlocal bonds on issuance thereof; continuation of state tax exemptions.

(a)        It is hereby found,determined and declared that:

(1)        From time to timebills have been introduced in the United States Congress providing that theinterest on all or certain state and municipal bonds or debt obligations,whether issued by or on behalf of states or local governmental units, besubject to federal income taxation; and

(2)        The Tax Reform Actof 1986 requires, in certain circumstances, the inclusion in the gross incomeof the recipient thereof of interest on bonds or obligations issued by or onbehalf of certain state or local governmental units for purposes of federalincome tax which heretofore would have been exempt from federal incometaxation.

(b)        Nothing in any act,general, special or private, shall be deemed to limit or restrict the right ofthe State or any agency or instrumentality thereof, or The University of NorthCarolina or any agency or instrumentality thereof, or any county, city, town,special district, authority or other political subdivision or localgovernmental unit or any agency or instrumentality thereof, to issue, or haveissued on its behalf, bonds or obligations the interest income on which is ormay be subject to federal income taxation.

(c)        The interest on anyof these bonds or obligations shall maintain its existing exemption from Stateincome taxation, or other taxation, if any, notwithstanding that the interestmay be or become subject to federal income taxation as a result of legislativeaction by the federal government.

(d)        If the provisionsof this section are inconsistent with the provisions of any other laws, theprovisions of this section shall be controlling. (1987, c. 587, ss. 1‑4;1995, c. 41, s. 10.)