§1433 Exemption from taxation; obligations acceptable as credit on debt of home owner

Summary

Bank-issued notes, bonds, debentures, and similar IOUs are free from tax on both the principal and the interest. The only tax exclusions are surtaxes, estate, inheritance, and gift taxes. This tax-free rule applies to taxes by the United States and by any territory, possession, state, county, city, or local tax authority. A bank’s business and finances — its charter, capital, reserves, surplus, loans (advances), and income — are also tax-free under the same rules. But any land or buildings the bank owns must be taxed by states or localities like other real property. A bank must accept its own notes, bonds, or debentures that still have unearned coupons at face value as payment or credit on a homeowner’s debt to the bank.