Tax anticipation notes are notes issued by states or municipalities to finance current operations before tax revenues are received in the United States.
[1] When the issuer collects the taxes, the proceeds are then used to retire debt.
Tax anticipation notes are short term notes, issued at a discount, with a maturity period usually less than a year or a stated future date.
Tax anticipation notes are used by municipalities to bridge funding gaps.
In the U.S. state of California, Revenue Anticipation Notes (RANS) are issued and paid back within a fiscal year, while Revenue Anticipation Warrants (RAWS) are issued on a fiscal year and paid back the following fiscal year.