# Plain Language Summary: No Tax Breaks for Sanctuary Cities Act

This bill would punish cities and states that limit cooperation with federal immigration enforcement by removing a major financial benefit they currently enjoy. Specifically, it would eliminate the tax-exempt status of bonds issued by these jurisdictions. To understand what this means in practical terms: when cities or states need to borrow money for projects like building schools, roads, or infrastructure, they often issue bonds. Investors who buy these bonds normally don't have to pay federal income tax on the interest they earn, which makes these bonds attractive to investors and allows cities to borrow money at lower interest rates. This bill would strip away that tax advantage for any jurisdiction the bill defines as a "sanctuary jurisdiction."

The bill defines a sanctuary jurisdiction as any state or city that has laws or policies preventing local officials from sharing immigration status information with federal authorities or from cooperating with federal immigration detention requests. In other words, if a local government has chosen not to help federal immigration enforcement—whether through policy or law—that jurisdiction would lose the ability to issue tax-exempt bonds. This would make borrowing money significantly more expensive for these cities and states, since investors would demand higher interest rates to compensate for having to pay taxes on their bond earnings.

The practical impact would be substantial. Cities and states that have adopted sanctuary policies would face higher costs for any infrastructure projects they want to fund through bonds. These increased costs could mean fewer projects get built, projects take longer to complete, or local taxes and fees increase to cover the higher borrowing costs. The bill would apply to any bonds issued after it becomes law, so the effects would be immediate and ongoing for any jurisdiction that maintains sanctuary policies.

No Tax Breaks for Sanctuary Cities Act

Rosendale, Matthew M.

No Tax Breaks for Sanctuary Cities Act This bill denies a tax exclusion for the interest on bonds issued by sanctuary jurisdictions. A sanctuary jurisdiction is a governmental entity that has a statute in effect that restricts cooperation with the federal government regarding the citizenship or immigration status of any individual or that prohibits compliance with a request by the Department of Homeland Security with a detainer for, or notification about the release of, an individual.