Tax-exempt definition

Not subject to taxation, as the capital or income of a philanthropic organization.

Producing interest that is exempt from income tax.

A tax-exempt security.

Exempt from taxation; that may not be taxed.

Producing income that is exempt from taxation.

Not subject to tax. This term is usually descriptive of interest on municipal and state government bonds, which (since 1913) have been exempt from federal income taxes. This is viewed as a form of federal revenue sharing.