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Title 12 — Banks and BankingRelease 119-73

§2098 Taxation

Title 12 › Chapter CHAPTER 23— - FARM CREDIT SYSTEM › Subchapter SUBCHAPTER II— - FARM CREDIT ASSOCIATIONS › Part Part B— - Federal Land Bank Associations › § 2098

Last updated Apr 6, 2026|Official source

Summary

Federal land bank associations and their capital, reserves, surplus, and the income they earn do not have to pay federal, state, municipal, or local taxes, except land they own can be taxed the same as similar property owned by others. The mortgages they hold and the notes, bonds, debentures, and other obligations they issue are treated as U.S. government instruments and are tax-exempt, except that a holder may owe federal income tax under the Public Debt Act of 1941 (31 U.S.C. 3124).

Full Legal Text

Title 12, §2098

Banks and Banking — Source: USLM XML via OLRC

Each Federal land bank association and the capital, reserves, and surplus thereof, and the income derived therefrom, shall be exempt from Federal, State, municipal, and local taxation, except taxes on real estate held by a Federal land bank association to the same extent, according to its value, as other similar property held by other persons is taxed. The mortgages held by the Federal land bank associations and the notes, bonds, debentures, and other obligations issued by the associations shall be considered and held to be instrumentalities of the United States and, as such, they and the income therefrom shall be exempt from all Federal, State, municipal, and local taxation, other than Federal income tax liability of the holder thereof under the Public Debt Act of 1941 (31 U.S.C. 3124).

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Prior Provisions

A prior section 2098, Pub. L. 92–181, title II, § 2.17, Dec. 10, 1971, 85 Stat. 602; Pub. L. 99–205, title II, § 205(e)(16), Dec. 23, 1985, 99 Stat. 1705; Pub. L. 100–233, title VIII, § 805(j), Jan. 6, 1988, 101 Stat. 1715, related to taxation, prior to the general amendment of this subchapter by Pub. L. 100–233, § 401. A prior section 2.16 of Pub. L. 92–181 was renumbered section 2.15 and is classified to section 2097 of this title.

Amendments

1988—Pub. L. 100–399, § 401(x), substituted “derived therefrom, shall” for “derived therefrom shall”, “by the associations” for “by the banks”, and “3124” for “742(a)”.

Statutory Notes and Related Subsidiaries

Effective Date

of 1988 AmendmentAmendment by Pub. L. 100–399 effective immediately after amendment made by section 401 of Pub. L. 100–233, which was effective 6 months after Jan. 6, 1988, see section 1001(b) of Pub. L. 100–399, set out as a note under section 2002 of this title.

Effective Date

Pub. L. 100–233, title IV, § 401, Jan. 6, 1988, 101 Stat. 1622, provided that this section is effective 6 months after Jan. 6, 1988.

Reference

Citations & Metadata

Citation

12 U.S.C. § 2098

Title 12 — Banks and Banking

Last Updated

Apr 6, 2026

Release point: 119-73