
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 31USC3124]

 
                       TITLE 31--MONEY AND FINANCE
 
                   SUBTITLE III--FINANCIAL MANAGEMENT
 
                         CHAPTER 31--PUBLIC DEBT
 
                      SUBCHAPTER II--ADMINISTRATIVE
 
Sec. 3124. Exemption from taxation

    (a) Stocks and obligations of the United States Government are 
exempt from taxation by a State or political subdivision of a State. The 
exemption applies to each form of taxation that would require the 
obligation, the interest on the obligation, or both, to be considered in 
computing a tax, except--
        (1) a nondiscriminatory franchise tax or another nonproperty tax 
    instead of a franchise tax, imposed on a corporation; and
        (2) an estate or inheritance tax.

    (b) The tax status of interest on obligations and dividends, 
earnings, or other income from evidences of ownership issued by the 
Government or an agency and the tax treatment of gain and loss from the 
disposition of those obligations and evidences of ownership is decided 
under the Internal Revenue Code of 1986 (26 U.S.C. 1 et seq.). An 
obligation that the Federal Housing Administration had agreed, under a 
contract made before March 1, 1941, to issue at a future date, has the 
tax exemption privileges provided by the authorizing law at the time of 
the contract. This subsection does not apply to obligations and 
evidences of ownership issued by the District of Columbia, a territory 
or possession of the United States, or a department, agency, 
instrumentality, or political subdivision of the District, territory, or 
possession.

(Pub. L. 97-258, Sept. 13, 1982, 96 Stat. 945; Pub. L. 99-514, Sec. 2, 
Oct. 22, 1986, 100 Stat. 2095.)

                                          Historical and Revision Notes
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---------------------------------
           Revised Section                   Source (U.S. Code)                
Source (Statutes at Large)
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---------------------------------
3124(a)..............................  31:742.                         R.S. Sec
.  3701; Sept. 22, 1959, Pub. L.
                                                                        86-346,
 Sec.  105(a), 73 Stat. 622.
3124(b)..............................  31:742a.                        Feb. 19,
 1941, ch. 7, Sec.  4, 55 Stat.
                                                                        9; Mar.
 28, 1942, ch. 205, Sec.  6, 56
                                                                        Stat. 1
90; restated June 25, 1947, ch.
                                                                        147, 61
 Stat. 180; Sept. 22, 1959, Pub.
                                                                        L. 86-3
46, Sec.  202, 73 Stat. 624.
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---------------------------------

    In subsection (a), before clause (1), the words ``Except as 
otherwise provided by law, all . . . bonds, Treasury notes, and other'' 
are omitted as surplus. The words ``political subdivision of a State'' 
are substituted for ``municipal or local authority'' for clarity and 
consistency. The word ``applies'' is substituted for ``extends'' for 
clarity. The words ``directly or indirectly'' are omitted as surplus. In 
clause (1), the word ``instead'' is substituted for ``in lieu'' for 
clarity.
    In subsection (b), the words ``shares, certificates, stock, or 
other'' and ``sale or other'' are omitted as surplus. The words ``The 
tax status of . . . and the tax treatment of . . . is decided under the 
Internal Revenue Code of 1954 (26 U.S.C. 1 et seq.)'' are substituted 
for ``shall not have any exemption, as such . . . shall not have any 
special treatment, as such, except as provided under the Internal 
Revenue Code of 1954'' for clarity. The words ``on or after March 28, 
1942'' and 31:742a(a)(1st sentence words after semicolon related to the 
United States Maritime Commission) are omitted as executed. The last 
sentence is substituted for 31:742a(a)(last sentence) for clarity. The 
words ``any political subdivision thereof'' are omitted as included in 
``agency or instrumentality''. The text of 31:742a(b) and (c) is omitted 
as unnecessary.


                               Amendments

    1986--Subsec. (b). Pub. L. 99-514 substituted ``Internal Revenue 
Code of 1986'' for ``Internal Revenue Code of 1954''.

                  Section Referred to in Other Sections

    This section is referred to in title 12 sections 1441, 1441b, 2023, 
2079, 2098; title 20 section 1087-2.
