A bill to amend the Internal Revenue Code or 1954 to provide that section 265 of such code shall not apply with respect to certain interest paid by certain dealers in connection with the purchase of tax-exempt obligations.

Allows under the Internal Revenue Code a deduction for a portion of the interest paid or accrued during the taxable year on the indebtedness incurred to purchase or carry tax exempt obligations, if such obligations are held primarily for sale to customers in the ordinary course of a taxpayer's trade or business.