What is the tax status of interstate authorities and commissions?

Interstate authorities and commissions are typically established by agreements between two or more states to facilitate the provision of services or infrastructure that crosses state lines. These entities are often granted specific tax-exempt status under state and federal law to support their function in promoting regional cooperation and development.

The tax-exempt status of interstate authorities and commissions enables them to operate more efficiently without the burden of taxation that would otherwise impede their initiatives. This exemption is crucial because it allows them to focus resources on their primary objectives, such as transportation, environmental protection, and economic development.

The other options imply various forms of taxation or reduced rates, which do not apply to interstate authorities and commissions, as their functionality and purpose often necessitate a level of independence from typical tax obligations.