Note 228 — Chapter XXIII · TAXATION AND PUBLIC FINANCE

There are some exceptions. The income from the first issue of Liberty Bonds is entirely exempt from national taxation; the income from the other issues is exempt up to a certain amount for a designated period of years. All the bonds issued by the national government are exempt from state and local taxation. Bonds issued by states, counties, cities, and other municipalities are exempt from national taxation; they may or may not be exempt from state and local taxes, depending usually upon where the owner resides. For example, if a man owns bonds issued by the city of San Francisco and resides in California, the income from these bonds is exempt from state and local taxes; but if the owner resides in some other state which has an income tax, the income is taxable.