Tax Exemption Law and Legal Definition
In federal income taxation, exemption may refer to a credit given for each dependent, blindness or other disability, and age over 65, which reduces the calculation of taxes due. The Internal Revenue Service (IRS) also grants tax exempt status to IRS qualifying charitable, educational or scientific organizations, so that their activities and associated revenue are free from taxation. There are various other exemptions, such as minimum income levels that are exempt from filing certain forms, such as an Alternative Minimum Tax filing.
An example of a state statute granting tax exemption is
"The property and income of the authority, all bonds issued by the authority, the income from such bonds, conveyances by or to the authority, and leases, mortgages and deeds of trust or trust indentures by or to the authority shall be exempt from all taxation in the State of ......." " The authority shall be exempt from all taxes levied by any county, incorporated city or town, or other political subdivision of the state, including, but without limitation to, license and excise taxes imposed in respect of the privilege of engaging in any of the activities in which the authority may engage. The authority shall not be obligated to pay or allow any fees, taxes or costs to the judge of probate of any county of this state in respect of its incorporation or the recording of any document. Nothing in this section shall be construed to exempt any private person, firm or corporation from payment of any ad valorem, mortgage or deed taxes or recording fees notwithstanding the fact that the authority has acquired an interest in the property or instrument subject to such taxes or fees."