New Date Set for Rule Changes on Tax-Exempt Bonds
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WASHINGTON — The Administration and congressional tax-writers, acting to relieve financial confusion for local governments, agreed on a new date when certain bond provisions of an income-tax overhaul would begin.
In a joint statement, Treasury Secretary James A. Baker III and the chairmen and ranking minority members of the Senate Finance and House Ways and Means committees agreed to delay until Sept. 1 certain new restrictions on the tax-exempt bonds issued by state and local governments.
The delay would not affect industrial-development bonds, and the date could be moved up if Congress approves an overall tax revision that is effective before Sept. 1, the statement said.
The tax bill passed by the House would be effective as of Jan. 1, 1986, but most of the measure pending in the Senate Finance Committee would not be enacted until next January.
The different dates caused confusion over investments, and some lawmakers had complained that the discrepancy all but halted sales of the state and municipal bonds, which pay for various local projects.
The statement added that while there is agreement on the starting date, “we are making no commitment with respect to what substantive rules ultimately may be enacted governing tax-exempt bonds.”
The House and Senate still have not agreed on when the other provisions of an eventual tax-law overhaul should go into effect.
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