Rev. Rul. 54-106

Bonds duly issued by or in behalf of a municipality for the purpose of financing the acquisition or construction of municipally owned industrial plants for lease to private enterprises constitute obligations of a political subdivision within the meaning of section 22(b)(4) of the Internal Revenue Code. Interest paid on such bonds is exempt from Federal income tax under the provisions of section 22(b)(4) of the Code notwithstanding the purpose for which they were issued or the fact that the promise to pay is limited to the revenue to be derived from leasing the property to be acquired or erected with the proceeds of the bonds. It is not necessary for purposes of section 22(b)(4) that the obligation be a general one, pledging the general credit of the municipality or the use of its taxing power.