May 2, 2023

Tax-Exempt Bonds: A Quick Guide to Qualified Private Activity Bonds

Most people have some familiarity with municipal bonds, but may assume that tax-exempt municipal bonds are issued only to finance government-owned infrastructure projects like roads, schools, and parks.  In fact, tax-exempt bonds may be issued to finance the acquisition, construction, development, or renovation of certain privately-owned facilities.  These bonds are called qualified private activity bonds (“PABs”), and they can be a powerful tool in a facility owner’s financing toolbox.  This publication describes PABs, how they are issued, and what types of projects and developers may take advantage of them.

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