State, local and tribal governments across America require a variety of equipment for emergency response and preparedness. Many of them also face budget constraints in buying the necessary equipment. Fortunately, tax-exempt financing is available to help communities acquire the emergency equipment, vehicles and warning systems needed to serve their citizens. Government officials and first responders who aren’t familiar with this form of funding can benefit from learning how tax-exempt financing works and what equipment and organizations qualify.
Baystone Government Finance funds emergency services equipment in every state of the union. We also work directly with equipment manufacturers and dealers to deliver the same benefits to their customers. Here’s a brief overview of tax-exempt financing for police, fire, rescue and safety equipment.
Financing That Stretches Budgets
Tax-exempt financing is available through tax-exempt municipal leases, which in most states are structured as lease-purchase agreements. This means that the organization receiving the financing can start using the equipment immediately upon delivery while paying back the lender, over time, in installment payments. The organization then owns the equipment at the end of the lease term.
Benefits of tax-exempt municipal leases include:
- Lower financing rates – approximately 30% below commercial rates, on average
- No need for voter approval or tax increases in most jurisdictions
- No need for large, upfront capital outlays
- Reserve capital, instead, for projects where leasing is not an option
- Schedule and structure payments based on specific budget needs
Who Qualifies For Tax-Exempt Financing?
Certain organizations and essential equipment are eligible for tax-exempt municipal leases.
Organizations − States and other political subdivisions qualify, including cities, towns and counties. According to IRS Section 103, the entity applying for financing must have either the power to tax, police power and/or the power of eminent domain to issue tax-exempt obligations. Organizations can also receive tax-exempt financing through their relationships with states and political subdivisions, including public schools, special -purpose districts (including fire), agencies, authorities, boards and commissions. Volunteer fire companies can also qualify.
Equipment and Real Property – Tax-exempt municipal leases must finance equipment and real property that’s considered essential use. Baystone Government Finance offers tax-exempt municipal leases for an array of emergency equipment, vehicles, warning systems and buildings. This includes 911 systems, audio sirens, cameras (thermal imaging, body and police), defibrillators, fire protection gear, lifesaving medical equipment, radios, rescue tools, self-contained breathing apparatuses (SCBAs), security systems, ambulances, fire trucks, police cruisers, upfitting for emergency vehicles, and administrative buildings and fire stations.
Baystone Tax-Exempt Financing
Baystone Government Finance professionals have extensive experience providing tax-exempt municipal leases for emergency equipment and real property in all 50 states. Our funding stretches budgets, helping state, local and tribal governments, first responders, and equipment manufacturers and distributors. We also offer escrow accounts known as vendor payable accounts when appropriate for organizations that want to defer payments and lock in rates for equipment on back order. Baystone manages all the details so our customers can stay focused on the communities they serve.
To inquire about Baystone financing: Request a Quote or Call Us at 800-752-3562.
For more information on this topic: Visit our tax-exempt municipal leasing section.
