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LSDefine
Simple English definitions for legal terms
TAN
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A quick definition of TAN:
A note is a written promise to pay money to someone else. It's like a special kind of letter that says "I promise to give you this much money." There are different types of notes, like ones that have to be paid all at once or ones that have small payments over time. Some notes are backed up by things like property or stocks, while others are just promises. Sometimes, governments use notes to borrow money for a short time. Notes can also be short essays that explain or criticize a certain area of the law.A more thorough explanation:
TAN stands for tax-anticipation note. It is a short-term obligation issued by state or local governments to finance current expenditures and usually matures once the local government receives individual and corporate tax payments.
- A city issues a TAN to pay for road repairs that need to be done immediately. The TAN will be paid back once the city receives tax payments from its residents and businesses.
- A county issues a TAN to cover the cost of a new school building. The TAN will be paid back once property taxes are collected from homeowners.
These examples illustrate how TANs are used by local governments to cover expenses before they receive tax revenue. It allows them to address urgent needs without having to wait for tax payments to come in.