This bill would eliminate the tax-exempt status of municipal bonds issued by "sanctuary jurisdictions"—states and cities that have laws or policies restricting their cooperation with federal immigration enforcement. Specifically, it targets jurisdictions that prohibit sharing immigration status information with federal authorities or complying with Department of Homeland Security detention requests. The bill would require the Treasury Department, in consultation with Homeland Security, to publish and update annually a list of sanctuary jurisdictions within 180 days of enactment. The changes would apply to any bonds issued after the law takes effect, meaning affected communities would lose a significant financial advantage when borrowing money for infrastructure and other projects, as investors would no longer receive tax-exempt income from these bonds. The legislation was introduced in March 2025 and referred to the House Ways and Means Committee.
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