Qusetion: The following statement appeared in a publication by the Idaho State Treasurer's Office:
Each year since 1982 the Idaho State Treasurer has issued a State of Idaho Tax Anticipation Note ‘TAN'. These notes are municipal securities that are one-year, interest-bearing debt obligations of the State of Idaho. The distinguishing characteristic of a municipal security is that the interest earned on them is exempt from federal income tax. Idaho municipal securities are further exempt from state income taxes. Idaho's TANs are issued in multiples of $5,000 which the amount is paid when the bond matures. Idaho TANs are issued with a fixed interest rate.
Why is a TAN issued by a municipality?