What is a note of tax expectations?

notes on tax expectations are one type of notes issued by municipalities. In general, a note on tax expectations is issued by a state or local government knowing that a certain amount of taxes will be collected in a considerable period of time. This note now allows the municipality to finance capital projects than to wait for the actual tax collection.

A note on the predict of a tax, which is sometimes referred to as tax expectations, is considered a short -term debt obligation. This means that the municipality is expected that the municipality will have enough income in hand to cover the nominal value of the debt in a relatively short period of time. It is generally expected that debt obligations of this nature will be paid in full in the maximum of one calendar year. First, the nominal value of the note will be the means that are directed to a specific capital expenditure, such as the construction of new roads or repairing existing roads. Funds will not be diverted to other projects or are used for lack of general operating budget.

Second, the date of maturity of the note of the tax expectation is considered solid. The date is not moved, revised or otherwise unchanged. If necessary, the current note on the tax expectations is paid in time and a new note is issued that bears another date of maturity.

Last, a note of tax expectations is first entitled to any tax collection. This means that a monthly assignment is included before any part of the tax collected for other budget items is used to retire the debt commitment created according to the tax expectation note. In short, the expectation of the tax remains a priority until the debt is released at the due date or before.

Expecting tax note is often in the best interest of citizens living in the issuing village. The ability to finance large projects by issuing this kind of remark allows you to start immediately PRacing. This means that citizens can start giving benefits from the project earlier than later.