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

In contrast to private companies, the board members of tax-exempt charitable nonprofits cannot take a share of earnings. —Catherina Gioino, Fortune, 23 Feb. 2026

That essentially means a semipublic, standalone agency that is currently pursuing tax-exempt status. —Dave Boucher, Freep.com, 22 Feb. 2026

How much of people’s Social Security benefits will get taxed depends on the total amount of their income, including tax-exempt interest like from a municipal bond, plus one-half of their Social Security benefits for the taxable year. —Medora Lee, USA Today, 20 Feb. 2026

The Tarrant Regional Water District, the island’s largest public landowner, has signed on to pay the tax despite being a tax-exempt government entity. —Harrison Mantas, Fort Worth Star-Telegram, 20 Feb. 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