Definitions for "Municipal Lease"
A municipal Lease is a contract entered into by a state or local government such as a county, city, town or municipal authority.
A conditional sales contract disguised in the form of a lease available only to municipalities, in which the interest earnings are tax-exempt to the lessor.
lease designed to meet the special needs of state and local governments. The lease contains a non- appropriation clause which states that the only condition under which the entity may be released from its payment obligation is when the legislature or funding authority fails to appropriate funds. Since the lessee is a municipality or an organization supporting the government, it is exempt from paying federal income taxes. For this reason, the IRS does not charge the lessor income taxes on leases to these customers.