tax-exempt

adjective

tax-ex·​empt ˌtaks-ig-ˈzem(p)t 

1

: exempted from a tax

2

: bearing interest that is free from federal or state income tax

Examples of tax-exempt in a Sentence

Recent Examples on the Web

The agency allocates funds from state tax-exempt bonds to endeavors such as affordable housing projects. —George Avalos, Mercury News, 9 May 2026

The potential consequences of using tax-exempt dollars to build a for-profit entity could include stripping the foundation’s nonprofit status, or requiring it to pay back taxes on dollars spent to construct a commercial building. —Claire Heddles, Miami Herald, 8 May 2026

Or, regulators could complain that some donations were not used for tax-exempt purposes. —Beth Gazley, The Conversation, 24 Apr. 2026

Dispensary operators are still hoping for state lawmakers to lower cannabis taxes and allow all dispensaries to sell tax-exempt medical cannabis. —Robert McCoppin, Chicago Tribune, 21 Apr. 2026

Word History

First Known Use

1923, in the meaning defined at sense 1

Rhymes for tax-exempt

• nonexempt
• attempt
• contempt
• exempt
• preempt
• unkempt
• empt
• tempt

Legal Definition

tax-exempt

adjective

1

: exempted from taxation

also : based on such exemption

tax-exempt status

2

: providing interest or income that is exempted from taxation

a tax-exempt municipal bond