Business Law News 2019, Issue 3
- Bln Editorial Board: Letter from the Editor
- Business Law News Editorial Team
- Business Law News Table of Contents
- Executive Committee: Message from the Chair
- Executive Committee of the Business Law Section 2018-2019
- MCLE Article: Test Your Knowledge: Recent Developments in Insolvency Law
- Standing Committee Officers of the Business Law Section 2018-2019
- The Benefits of Recommitting to Pro Bono
- The Importance of Knowing Who Is, and Who Is Not, Your Client
- The New Bba Centralized Partnership Audit Rules and Bankruptcy: a Shotgun Wedding Without Any Marital Bliss
- A Tax-Exempt Bond Primer for 501(c)(3) Organizations
A Tax-Exempt Bond Primer for 501(c)(3) Organizations
Johnny devotes his practice to tax-exempt bonds, including 501(c)(3) bond financings. He handles tax issues arising before and after a tax-exempt bond deal closes. Johnny writes for Squire Patton Boggs’s Public Finance Tax blog and is the chairman of the Tax Law Committee of the National Association of Bond Lawyers.
Any maturing 501(c)(3) organization will at some point have to decide whether to borrow in the tax-exempt market to finance the capital projects that will promote its mission. Although tax-exempt debt usually carries a lower interest rate than taxable debt, it also brings with it additional costs, in the form of various legal restrictions on how you can use the project and the rather unpleasant experience of having to deal with tax lawyers.
This article is aimed at 501(c)(3) organizations that have not borrowed in the tax-exempt debt market before, to prepare you for the federal tax aspects of your first deal. However, for our readers who are seasoned veterans of the tax-exempt borrowing process, before you close the browser window or turn the page, remember the admonition of the great muni bond tax lawyer Vince Lombardiâ "Excellence is achieved by mastery of the fundamentals." Stick aroundâyou, too, might find something useful here.