A web user asks, Our community issued tax exempt bonds to build improvements to the utility system. A portion of our utility bill goes to repay that tax exempt bond. However, we are charged sales tax on ALL of the utility bill. Is this legal under the IRS and SEC rules, or should they be exempting a pro-rated portion of the bill from sales taxes?
Our city does not receive revenue from property tax. The property tax goes to the school district. The city is operated from 2 sources of revenue: the profit on the city-operated electric, water, and gas utility and the proceeds from a 1.5% sales tax.

Can you help them out? Post your advice!

Related Items:

1. How Can I Compare My Current Tax Exempt Salary And Benefits To Job Offers Back In The States?
2. When Doing Work For Tax Exempt Church, Should I Still Include Sales Tax For Materials I Buy To Do The Work?
3. What is the statewide sales tax in Ohio?
4. Can a full time student check exempt from tax when applying for a job?
5. do i have to file city income tax for chicago?