Daily Tax Report ®

Yield-Hungry Californians Facing 13% Tax Can Look to These Munis

Feb. 14, 2020, 6:00 PM

Wealthy Californians -- and New Yorkers, too, for that matter -- can look to an emerging segment of the $3.8 trillion municipal-bond market to help them avoid high state taxes while earning a bit of extra yield.

It’s a niche that’s become more visible as states and cities flock to sell bonds that are a departure from traditional tax-exempt municipal securities because investors have to pay federal taxes on the interest they receive. While that might not seem compelling to mom and pop investors who are worried about their tax burden, a portion of those deals allow residents to avoid...

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