Definition of Special Tax Bond

Special Tax Bond is a type of municipal revenue bond that is supported only by revenue from certain taxes.

Applying "Special Tax Bond" to Securities Exams:

If a state or a town needs to build or repair a facility such as a reservoir a bond will often be issued to finance that facility. A special tax may then be assessed upon the properties who use that facility. The bond interest and principal payments will be supported by revenue generated from that special tax.

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