tax-exempt

adjective

tax-ex·​empt ˌtaks-ig-ˈzem(p)t 

1

: exempted from a tax

2

: bearing interest that is free from federal or state income tax

Examples of tax-exempt in a Sentence

Recent Examples on the Web

When your income is high enough to trigger the surtax regularly, shifting some income investments to tax-exempt bonds instead of other income vehicles could both lower your MAGI and avoid or reduce the surtax. —Bob Carlson, Forbes, 23 Dec. 2024

Any leftover funds, that are not otherwise dispersed, could be transferred to another nonprofit, including the university, which operates under the same tax-exempt status. —Daniel Libit, Sportico.com, 21 Dec. 2024

Back when The County Buzz, a tax-exempt nonprofit, still had a functioning website in 2007, an IRS filing shows the fledgling organization that year raised only $122 – putting it $1,000 in the red. —Chris Quintana, USA TODAY, 13 Dec. 2024

Not-for-profit, or tax-exempt hospitals, account for most hospitals and health systems in the U.S. —Bruce Japsen, Forbes, 11 Dec. 2024

Word History

First Known Use

1923, in the meaning defined at sense 1

Legal Definition

tax-exempt

adjective

1

: exempted from taxation

also : based on such exemption

tax-exempt status

2

: providing interest or income that is exempted from taxation

a tax-exempt municipal bond