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Finance Dictionary and Glossary of Investment Terms
Mutual exclusion doctrine
Definition 1.
The tenet that rules municipal bond interest is federal tax-free. In return for this federal tax exemption, states and localities cannot tax interest generated by federal government securities.
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Definition 2.
Doctrine establishing that interest earned on federal debt will not be taxed by state or local governments, and interest earned on state and local government debt will not be taxed by the federal government.
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