Your customer lives in a state with no income tax and wants an income-producing investment that is tax-free. Which option meets their needs?

A municipal bond issued from any state is the best choice for a customer seeking an income-producing investment that is tax-free, especially in a state with no income tax. Municipal bonds are typically exempt from federal income tax, and in many cases, they are also exempt from state taxes for the issuer's state residents. However, since the customer resides in a state with no income tax, they can benefit from the tax-free nature of municipal bonds, regardless of the state that issues them.

Choosing a municipal bond from any state allows the customer to earn income that is free from federal income tax, which aligns perfectly with their goal of having a tax-free investment. Furthermore, this option is particularly appealing as municipal bonds are often used for funding public projects and can provide a steady income stream, making them attractive for income-producing investments. Other options like GNMA certificates and Treasury bonds may provide income, but they are subject to federal taxes, which does not fulfill the customer's request for a tax-free investment.