Individuals, estates, and trusts in the District of Columbia have been required in the past to include gross income or interest from municipal bonds when calculating their individual income taxes. This will no longer be the case under legislation signed by Mayor Vincent Gray (D) July 30. The bill must still be reviewed by Congress, but the change would reverse a 2011 decision by city leaders to tax income from out-of-state municipal bonds as a way to raise more than $13 million per year in additional revenues. The Out-of-State Municipal Bond Tax Repeal Emergency Act of 2013 would amend Section 47–1803.02(a)(1)(B) of the D.C. Code to repeal the 2011 law. The act was signed by the mayor as part of the Fiscal Year 2014 Budget Support Emergency Act of 2013. Bottom line: good news for D.C. residents.
