TAX-EXEMPT

tax-exempt, adj. 1. By law not subject to taxation (a tax-exempt charity). [Cases: Internal Revenue 4045–4071; Taxation 211–250. C.J.S. Internal Revenue §§ 327, 462–474, 670, 798; Taxation§§ 266, 275, 277–282, 287–289, 291–298, 300, 303–383, 1736–1737.] 2. Bearing interest that is free from income tax (tax-exempt municipal bonds). — Also termed tax-free.