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Alternative Minimum Tax (“AMT”)

An additional income Tax under the Code that applies in certain instances for individuals and in a different way to certain large corporations. Interest on Governmental Bonds issued as Tax-Exempt Bonds is generally excluded from the Alternative Minimum Tax, although corporations must include the Interest in certain calculations. However, Interest on qualified Private Activity Bonds (PAB) (other than Qualified 501(c)(3) Bonds and certain other PABs) is included as income by taxpayers in calculating the AMT.

See Also

Tax

Compulsory charges levied by a governmental unit for the purpose of raising revenue. 

Tax-Exempt Bonds

A bond, the interest on which is excludable from gross income for federal income tax purposes.

Private Activity Bond (PAB)

The term used in the Code to describe any bond issued as part of a bond issue that meets both of the private business tests or meets the private loan financing test.

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Millage or Mill

The percentage of value of property that is used in calculating taxes.