Municipal Bond Forum
On Kentucky Court Says State Can’t Tax Interest on Out-of-State Bonds
Q
What is the latest on the Kentucky case? I now live in Wyoming, a state with no income tax. If I understand correctly, if the Kentucky case is won, I, as an older retired person, could relocate to Minnesota to be closer to the Mayo clinic and would not have to purchase Minnesota bonds. I could keep what I have now and obtain a higher yield than on Minnesota municipal bonds, or maybe even relocate to Vermont, a state that just does not have municipal bonds. When do you think this case will be settled?
A
James A. Klotz responds:
The case you refer to, Davis v. Kentucky Department of Revenue, is now before the U.S. Supreme Court. The Kentucky State Supreme Court declined to hear the case, which was on appeal. We do not know at this time whether the U.S. Supreme Court will agree to hear the case. It is our understanding that the Supreme Court will make this decision early this year.
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