WASHINGTON - Tax-exempt bonds cannot be used to finance a local government program to lease water-conserving irrigation equipment to farmers, the Internal Revenue Service said in one of five bond-related private letter rulings published recently.

The ruling, which did not identify the parties involved, concluded the irrigation equipment would not qualify as "facilities for the furnishing of water" that, under the tax code, can be financed with tax-exempt private-activity bonds.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.