"California's casino-owning Indian tribes can't have it both ways. Already granted exemption from state taxes on their lucrative casinos, they also want the right to use state tax-exempt bonds � which are intended to pay for public improvements such as sewer systems and roads � to expand these gambling palaces.

The Internal Revenue Service takes a dim view of tribes' use of tax-exempt bonds for business purposes. On Tuesday, the agency rightly ruled against a tribe near Palm Springs that used $145 million in federally tax-exempt bonds to build a hotel and convention center near its casino. Investors who buy these bonds pay no tax on the interest they earn, meaning the bonds can be sold at very low interest rates. They take millions out of government coffers, which is why they are only intended for public benefit. Luxury hotels don't fall into that category."

Get the Story:
Editorial: Tribes Take Exemptions Too Far (The Los Angeles Times 4/14)
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Relevant Documents:
IRS Letter | Senate Testimony

Relevant Links:
Tax Exempt Bond Community - http://www.irs.gov/taxexemptbond

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